No fee, but businesses still have to get license in Elgin

Businesses in Elgin are no longer required to pay a fee to obtain a business license, an anticipated victory for those who've been fighting for that since 2011.

The city council approved doing away with the fee last week after giving a preliminary thumbs-up during budget discussions in the fall. Businesses are still required to get annual licenses at no cost.

Among those who are pleased is Kevin Bunte of Bunte Auction Services, who was among more than 100 business owners who packed city hall in fall 2011 to protest the business license. The effort was spearheaded by Elgin OCTAVE, a group that advocates fiscal responsibility.

“My problem is that they're scaring away businesses by charging more and more,” Bunte said. “It's not that the amount was so much that we couldn't handle it — it was just one more hand in our pocket taking out more money.”

Elgin's business license fee — which did not apply to home-based businesses — was $35 to $590 based on square footage. City officials projected those revenues at $255,000 for 2013.

The only dissenting vote last week came from councilman John Prigge, who said the city doesn't need a business license anymore. But if one exists, it should come with a fee to cover staff costs, he added.

“I was a big proponent of it before I was elected. Now, there's just no reason for it,” Prigge said.

When the business license fee was approved in December 2009, it was a tool to put extra controls on problematic businesses as well as a method to gather a comprehensive database of Elgin businesses, Prigge said.

The city has since strengthened its nuisance ordinance.

Also, the city can get business data at no cost from Dun & Bradstreet, which compiles it for the Illinois Department of Commerce and Economic Opportunity, Councilman Terry Gavin said.

Although the fee was eliminated, businesses that don't get a license could incur penalties of $50 to $750 for each unlicensed day, Elgin management analyst Aaron Cosentino said.

Scofflaws first get a letter and then must go through an administrative process before penalties are imposed, Cosentino said.

In 2013, there were nearly 2,200 business license holders throughout the city, with only 24 scofflaws, including some lingering from past years, he said. Information about whether any business was charged penalties was not immediately available.

As for neighboring towns, most also issue business licenses, Naperville being one notable exception.

Ÿ Carpentersville has had a business license since 2006, Village Clerk Terri Wilde said. Most business license fees are $40; others like tobacco shops pay $250, and gas stations are charged per pump, she said.

Businesses that also require a state license — such as beauty salons — don't need a business license but must register with the village, also at cost of $40, she said.

“If they don't comply, it's believed it's because they don't know. Once they are advised, they comply,” she said.

Ÿ Streamwood has required business licenses for more than 20 years, Village Clerk Kittie Kopitke said. Home-based businesses pay the lowest fee at $100 per year; for general businesses, base fees are $150.

The fees have only been raised once in her 19 years in the village, Kopitke said.

Some banks require proof of licensing before establishing business checking accounts, she pointed out.

Ÿ Naperville doesn't have a business license, said city communications manager Linda LaCloche. The city only issues occupancy permits whenever new businesses move into town, or existing businesses undergo renovations, she said.

The city has no business directory of its own, she said.

“For example if we get calls about shopping plaza information, we just don't keep that,” LaCloche said.