Proposed Changes to City Business Licensing

Proposed Changes to City Business Licensing

Last week, the City of Flagstaff proposed changes to business license regulations including Transaction Privilege Tax (TPT) fees. This was the first notice of the proposal, which will be revisited at the June 5 City Council meeting.

The primary changes are:
1.  All businesses located within the City must obtain a business license unless exempted by law;
2. The business license fee will be reduced from $20/year to $8/year (the City is able to reduce the annual fee because more businesses will now be licensed);
3.  The local TPT license fee will be changed from $46/one time to $38/year (the City is seeking to recoup the $150,000/year being charged to the City by ADOR for local tax administration);
4.  Peddlers and solicitors will no longer have a separate licensing system, they will obtain a business license.

After an overview of the proposal was presented by Revenue Director Sandy Corder and other City staff members, several attendees questioned the reasons behind the new tax.The Chamber weighed in expressing concerns regarding the effects that the amendment would have on the business community. As currently constructed, the Business License Code mandates a one time transaction privilege tax. The proposed amendment would increase the payment to an annual fee. This proposed amendment is essentially an Arizona state fee that the City of Flagstaff seeks to pass on to the business community.

The Greater Flagstaff Chamber of Commerce will continue to work with businesses and the City of Flagstaff to find a resolution. After discussion between Council members and the public, the Council and Mayor asked for more information on this proposed change. We will continue to monitor this proposal and be mindful of how we can further advocate for you!

Full comparison chart of proposed changes:

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