CHAPTER 14
BUSINESS LICENSING
Chapter Outline
1.
2.
3.
4.
5.
6.
7.
Section 1 – Business Licensing
Utah Business License Association (UBLA) ............................................................................... 1
National Bureau of Business License Officials (NBBLO) ........................................................... 1
Section 2 – Know Your Code
How to Update Your Code .......................................................................................................... 2
Enforcement & How Planning and Zoning Fit In ........................................................................ 2
Your Business License Application ............................................................................................. 2
License Fees ................................................................................................................................ 2
Section 3 – Requirements of Your County
Health Department Regulations ................................................................................................... 3
Section 4 – Requirements of the State
What is a business required by law to register?............................................................................ 3
Where does a person register a business name? .......................................................................... 4
Division of Consumer Protection ............................................................................................ 4, 5
Section 5 – Requirement of the Federal Government
Federal Identification Number ..................................................................................................... 5
North American Industry Classification System (NAICS) – replaces Standard Industrial
Classification (SIC) ............................................................................................................. 5, 6
First Amendment Rights............................................................................................................... 6
Solicitors & peddlers in interstate commerce .............................................................................. 6
Sexually Oriented Businesses ...................................................................................................... 6
Section 6 – Main Areas of Business Licensing ........................................................................... 6, 7
Utah Code References
Athletic Associations .................................................................................................................... 7
Auto Body Repair Shops .............................................................................................................. 7
Beer Licensing ............................................................................................................................. 7
Cell Phone License ...................................................................................................................... 7
City Authority to License ............................................................................................................ 7
Contractors ................................................................................................................................... 7
Firearms Sales............................................................................................................................... 7
Food Sales ................................................................................................................................... 8
Fund Raisers ................................................................................................................................ 8
Home Occupations ....................................................................................................................... 8
Insurance Companies.................................................................................................................... 8
Liquor Licensing........................................................................................................................... 8
Massage Therapists....................................................................................................................... 8
Offensive Businesses .................................................................................................................... 8
Peddler Selling Own Produce ....................................................................................................... 8
Peddlers/Solicitors ........................................................................................................................ 8
Preschool/Daycare ........................................................................................................................ 8
Rental Dwellings .......................................................................................................................... 8
Security Companies ...................................................................................................................... 8
Sexually Oriented Businesses....................................................................................................... 8
Watkins/Tupperware/Avon, etc. ................................................................................................... 9
Provisions for Businesses of all Sorts........................................................................................... 9
Chapter 14 Business Licensing
Page 1
CHAPTER 14
BUSINESS LICENSES
Section 1:
Business Licensing can be a fairly straightforward matter if your city is small and has few
businesses. If not, you need to learn all you can and be on your toes to avoid the pitfalls that
lie in wait.
UTAH BUSINESS LICENSE ASSOCIATION: The UBLA is a very important and helpful
organization for those who are involved in their city’s business licensing. This organization began as a group
of cities in the north section of the state that got together about once a year to compare notes and review
changes in state laws that affect licensing. In about 1990, this group formally organized the UBLA as a nonprofit organization, adopted by-laws, and began inviting all cities in the state to join. There are yearly dues,
and conferences are held once a year in the fall. At these conferences, there are classes on all areas of
licensing. Perhaps, the most helpful aspect of the conferences is the chance to talk with other license
officials from all over the state and compare notes and get answers to questions.
The UBLA has established a certification program that will help you as a licensing official. The basic
criterion for certification is:
A.
Be an active and current member of the Utah Business License Association. Please visit their website
@ http://www.utahbusinesslicenseassociation.com/ for a complete list of contact information,
current fees, and requirements.
B.
Complete the required hours of educational instruction as identified by the Certification
Committee. The areas are subject to change. A current list of areas of instruction and
requirements may be found by visiting http://www.utahbusinesslicenseassociation.com/
C.
Be actively engaged in the issuance of licenses within the jurisdiction you represent.
There are no fees for certification; however, an application is required. The certification is valid for a
four-year period from the date of issuance. After that, an official can re-certify by listing the continuing
education received through attending conferences and/or training accomplished within the previous four
(4) year period. Hours of training by the National Bureau of Business License Officials also count towards
certification.
Once a licensing official is certified through this program, the official has the right to place the initials
“CBLO” after his/her name and to be recognized as a person with advanced licensing knowledge. The
recognition you might receive, however, is unimportant compared to the great help the knowledge will be
to you in your duties as a licensing official in your city.
NATIONAL BUREAU OF BUSINESS LICENSE OFFICIALS. After the UBLA was organized, two
of the attorneys who were called upon frequently to give classes in case law, interstate commerce, and other
areas saw the great benefits of regular training for licensing officials and organized a national organization
similar to the UBLA. The NBBLO has annual dues for each city, and holds an annual conference. These
conferences are held in cities throughout the United States. It is very beneficial for any licensing official to
attend these conferences and mingle with contemporaries from other states.
If you are interested in the NBBLO, please contact Paul Morris at pmorris@nbblo.org or write to Mark
Arnold at 298 24th Street, Suite 230, Ogden, UT 84401, (801) 475-0123, Fax: (800) 381-5370,
mem@nbblo.org.
Chapter 14 Business Licensing
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Section 2:
KNOW YOUR CODE: The most important part of business licensing is to know your
own City code and follow it. If there is something you don’t understand, contact your city
attorney, and discuss it with him/her. Each city has a different code. It is vital that your
licensing is run in the manner your City code calls for.
If, in reading your code, you find that there are some areas that need to be amended or updated, first bring
it to the attention of your city attorney and/or city administrator. If there is no such person, and you are
IT, take the initiative and propose changes. Remember that the language of your ordinances must be very
clear and easy for the average person to understand.
HOW TO UPDATE YOUR CODE: If you know exactly the legal language and can write up the
ordinance to amend your code, then go ahead and do it. It would be wise, however, to check with neighboring
cities and review their codes. There is hardly a city in the State of Utah that will not be very helpful in
furnishing copies of sections of business licensing codes. Included with this chapter is a list of business
license officers in all cities that belong to the Utah Business License Association (Attachment 1). You can
call on any of these people for copies of their code, help in understanding the law or any aspect of business
licensing.
ENFORCEMENT & HOW PLANNING AND ZONING FIT IN: Study your planning and zoning
code as well as your license code. In most cities commercial or industrial businesses are allowed only in
certain zones. If it is not already in place, you should establish a method whereby your planning and zoning
department checks each business to make sure it is located in the right zone and has followed the correct
procedures for establishing a business at that location, such as a site plan review, zoning review, building
inspection, fire inspection, and any other requirement that your code might list. Businesses locating in a
zone where they are not permitted or without proper clearances are one of the pitfalls mentioned at the
beginning of this chapter. Once you issue a license, it becomes “property” and can be taken away only
through due process. A caution would be that if you deny a license, do so in writing and as soon as possible
after the application and review process is completed.
Enforcement of your business license ordinance can be hard if you are only beginning now. If you try to
enforce the code as you go, it will be easier to remember to apply the code as it is stated to every business.
When you have a problem business, and there will be some, please talk with your city attorney or city
administrator but remember to follow your own code. It can be helpful in these situations to call other cities
to see how they handled a similar situation.
YOUR BUSINESS LICENSE APPLICATION: Another important aspect of licensing is your application.
You may contact any city Business License Official and they will be happy to send you a copy of their
application. In preparing your application, make sure you include a space for everything that is required by
your code. In addition, there are state and even federal bits of information that you should require.
LICENSE FEES: Utah Code Unannotated §10-1-203 is one section of the State Code that you should
almost memorize. It is here that a good definition of a business is found in section (1). The rest of §10-1203 will tell you that your city can require a business license and charge a fee by ordinance. Under (5)(a) of
this section, you will find the important wording dealing with fees for a business license. If your fee is more
than a regulatory fee, which you can easily justify, your city must determine the disproportionate
costs of municipal services or enhanced levels of service provided to each particular type of business.
You can then base your fees upon the study you conduct to determine these disproportionate or enhanced
costs. As you can see when reading (5)(c) and (d), your city must adopt an ordinance defining the
disproportionate cost or enhanced level of services. §10-1-203(6) tells you that you must charge a uniform
fee to the same class of businesses. Remember, whatever your fees, they must be based upon your own
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study as required by this section. The only exception to this would be beer license fees, which the state
allows only up to $300.00.
Section 3:
REQUIREMENTS OF YOUR COUNTY: Most county requirements are covered
under the Health Department.
Health Departments regulate:
Body Art (tattooing)
Restaurants (food handlers permits, whether full time or temporary)
Scavengers (those who pump septic tanks)
Swimming Pools (public, not private)
Tanning Beds
Tire haulers
UST (Underground Storage Tank removal or placement)
If you have questions about the health aspect of any business, please don’t hesitate to call your local
health department.
Section 4:
A.
REQUIREMENTS OF THE STATE: Every business license official should have an
up-to-date set of the Utah Code Unannotated books if you cannot access it at
www.le.state.ut.us. Every licensing official should be familiar enough with the State Code
to be able to look up references when needed.
The state requires that all business in Utah with an assumed business name register with the Utah
Department of Commerce. Registration of assumed business names, often called “DBA” (Doing
Business As) is required of all businesses that are not corporations, limited liability companies, or
limited partnerships. These businesses automatically fulfill this law when they register
the entity type.
If a business owner has only recently registered his/her DBA, a number will not have been issued,
and you can take a copy of their registration application as proof. You should keep this information
in your files. The registration number for corporations, limited liability companies, or limited
partnerships will be found at the top of the Articles of Incorporation or the Certificate of Limited
Partnership.
1)
Why is a business required by law to register? (This is the important answer to “Why Do
I have to register my business name?)
a)
b)
c)
Business Licensing
Registration protects the business owner so the owner’s business name cannot be
legally used by another business. This registration provides the business with exclusive
use of the exact business name. The more the name is used and becomes known to the
public, the more legal protection the name earns against “predatory encroachment” by
other businesses.
Registration is required so that a comprehensive state registry of all business and
corporate information is available for public references. This information is vital to
an orderly legal system and marketplace. Without it, the public or other businesses
have no way of knowing the persons with whom they are doing business.
Registration is required by law to provide notice to the public of who owns or stands
behind a business entity. A business owner cannot file a lawsuit in court as a business
if the business is not registered. Registration enables careful business people to verify
information about companies with whom they do business.
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2)
Where does a person register a business name?
The State of Utah now offers online registration for all business needs; or a business can
file in person at one of its “service centers” or by mail. The State calls its online service
“One Stop Business Registration” and it can be accessed by going to the website at
www.business.utah.gov/registration .
A business can register a business name, obtain a sale tax number, etc. It’s a very
valuable resource and should be encouraged. A new business can access the site 24 hours
a day, 7 days a week. A new business can also register its business name by contacting:
Division of Corporations and Commercial Code
Utah Department of Commerce
Heber M. Wells Building
160 East 300 South, 1st Floor
Salt Lake City, UT 84111
or
P. O. Box 45801146705
Salt Lake City, Utah 84114-6705
(801) 530-4849
(877)526-3994
Web Address: www.commerce.utah.gov
There are other locations called “service centers” throughout the state where a business can
register. Please check with someone at the phone number above to see if there is a location
near your city.
A person can register either in person or by mail at the above address. The state provides
a booklet called “Doing Business in Utah - A Guide to Business Information.” Your local
chamber of commerce should have copies of this booklet, and every licensing official
should have at least one copy. (You can reach the state’s web service for this booklet at
www.commerce.utah.gov and then look under State Government Web Pages or go to
www.utah.gov/business/Pub_38.pdf, (Give this address to any business for online
services, and they will be grateful to you.) If you can’t get a copy from the chamber, please
contact the state at the address listed above, and they will send you a copy. It’s handy to
have one to read and thumb through. The state encourages city officials to make copies of
pages in the booklet as they need.
There is a $22 filing fee for a renewable three-year registration for a DBA. Businesses
that incorporate or form a limited liability company or limited partnership must file
incorporating or organizing articles of a Certificate of Limited Partnership with a filing
fee of $70.
B.
If the business conducts any type of retail sales, the business should have a state tax license and
state tax identification number. This can be issued upon application by mail or by going to any of
the service centers established throughout the state. The business name registration, filing of articles
of incorporation or organization, obtaining the state sales tax license and identification number
can usually all be done at the one service center. When a business comes into your city to operate
a business for only a short time, you should make certain they have a temporary tax license
and number. This can be quickly and easily obtained by calling the Utah State Tax Commission,
Special Events Collection Division, (800) 662-4335 ext. 6303 or (801) 297-6303.
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For your convenience or the convenience of your business license customers, the Utah
Department of Commerce also offers several small brochures that you can obtain in quantity to give
out to people. Some of these are: “Business Licensing Guide,” and “Why Register Your Business.”
Contact the state at the number listed above, and they will mail some to you–along with your
“Doing Business in Utah” booklets. You can find this online at the web site listed above, but
it is very large.
C.
You should be aware that the Department of Commerce has a Division of Consumer Protection,
801) 530-6601 or (800) 721-SAFE. Their mission is to respond to consumer complaints,
unfair and 14-5 deceptive business practices, and to provide consumer education. This
Division administers the following state laws:
Business Opportunity Disclosure Act
Charitable Solicitations Act
Consumer Sales Practices Act
Credit Services Organizations Act
Health Spa Services Protection Act
Identity Fraud Act
Motor Fuel Marketing Act
Music Licensing Act
New Motor Vehicles Warranties Act (lemon law)
Prize Notices Regulation Act
Personal Introduction Services Protection Act
Telephone Fraud Prevention Act
Telephone and Facsimile Solicitation Act
Unfair Practices Act
Wow, this is a lot, but a good licensing official will check in with this Division and find out about
all of these Acts. These laws or Acts encompass various aspects of consumer protection
including:
- Deceptive Advertising
- Direct sales misrepresentations
- Pyramid scheme/plans
- Travel scams
- Work at home schemes
- Fraudulent business opportunities
- New automobile warrant problems
- Mechanic & garage repairs/overcharges
- Health spa contracts
- Consumer credit repair scams
- Retail refunds
- Unfair competition
- Credit repair clinics
- Repair complaints (other than motor vehicle)
- Automated telephone calls
- Identity Theft
D.
- Bait and Switch
- Below cost selling
- Consumer education
- Home product sales
- Chain letters
- Free prize offers
- Sweepstake guarantees
- Door to door sales
- Price discrimination
- Retail rain checks
- Telemarketing/recovery rooms
- Three day right to cancel
- “Free” ad offers
- Deceptive labeling
- Illegal charities
- Dating services
The State Code requires that within 60 days of granting a license, you notify your county of every
business that receives a license in your city. This is for purposes of determining property tax
evaluations and charges. This will mean funds for your city so don’t neglect this requirement.
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E.
Remember, in many business-licensing instances, State law supersedes municipal law. Knowing
when and how is important. This is one very good reason to attend training classes with UBLA,
talk with your own city’s attorney, interact with other business license officials, and refer to the
State Code often.
Section 5.
REQUIREMENTS OF THE FEDERAL GOVERNMENT:
A.
Each business that applies for a license and which has employees should have a Federal
identification Number. You should require this number on the application to help ensure that the
business is a legitimate business.
B.
Businesses are assigned a classification under the North American Industry Classification System
NAICS). This is a new federal government system that takes the place of the Standard Industrial
Classification (SIC) coding system. T h i s c o d i n g s y s t e m w a s d e v e l o p e d j o i n t l y b y t h e
U.S. Economic Classi fication Policy Committee, Canada and Mexico to allow
for a high level of comparability in business statistics among the North
A m e r i c a n c o u n t r i e s . The Canadian and Mexican neighbors of the United States will become
partners as they adopt this same system. The publication of 2002 employment data will be the first
time economic growth will be measured using the NAICS system. Workforce Services in Utah
has been assigning all businesses in Utah with an NAICS classification. By
2002, there will be a year’s worth of data available, and year-over accounting will be published
using an NAICS format. With the publication of this 2002 data, the SIC format will no longer be
used.
You may or may not feel it important to keep this NAICS classification, but if you are a larger city,
it will be a benefit to you to have the information that can be provided. To find out about the NAICS,
you can visit their web site: www.census.gov/epcd/www/naics.html.
This information can give you a good look at Utah’s economic makeup.
C.
Whenever licensing any business, you must be aware that every person has First Amendment
Rights, and those Rights must be protected. If your codes are not carefully written and followed,
you may infringe upon these Rights. Following are some areas in which First Amendment Rights
must be guarded, along with your city’s rights to protect the health, safety, and welfare of its
citizens:
1)
Solicitors and peddlers in interstate commerce: The law is simple; it’s the application of
the law that becomes difficult. The law is: in order for a city or county to restrict, in
any way, First Amendment Rights through its licensing powers, the restriction must
be reasonable. Usually, a licensing restriction is reasonable if it is: a) content neutral, b)
serves a legitimate governmental interest, c) leaves open, ample alternative channels of
communication, and d) is narrowly tailored to serve the governmental objective. This
“reasonableness” test is applied to three different categories of restrictions: a) time, b) place,
and c) manner.
Believe me, this is the easy part. The hard part is in really understanding the above and
applying it. Excellent classes are given on this topic at the UBLA and NBBLO conferences.
2)
Sexually (or Adult) Oriented Businesses: When a business comes to your city to open an
SOB, and you have no ordinance in place governing where the business should go,
background checks, special requirements, etc., your city must allow the business, and you
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will have problems in regulating it because you have no ordinance. No matter what the
views of the licensing official, the mayor, the council, or any of the citizens might be on
SOB’s, the actions of dancers, owners, sellers of adult materials, etc., are protected by
First Amendment Rights because they are forms of expression.
An excellent SOB ordinance can be obtained from West Valley City and adapted to your
city. There is a great deal of material already available on the effects of such businesses
on cities and neighborhoods, so you probably won’t have to do your own studies. In order
to protect your city, you will have to have a good ordinance already in your code, however,
and you will need to zone an area where these businesses can locate.
Informative classes are also given on this topic at the UBLA and NBBLO.
D.
Don’t forget to refer to your telephone book under U.S. Government Pages for various locations
to help you in finding information. Many of the U.S. Government references have the web sites
listed.
Section 6:
Okay, let’s get down to the main areas of business licensing. Your code may or may not
address these areas at the present time, but it is almost certain that you will address these in
the future. It is much better to have your code in place when a business comes to town than
to try to backpedal to get an ordinance to protect your citizens from those “less than
desirable” businesses. You must be careful with your ordinances to make certain they don’t
conflict with state law. You can be more strict than state law but not less strict.
References that will be given are from the Utah Code Unannotated 2001.
Section 7: Utah Code References:
Athletic associations:
Authority of cities to regulate. See: 10-1-203
Auto body repair shops:
These must be licensed with the state and your city and are regulated
closely by the state as is spelled out in 41-3-105, 41-3-202 and 203 to
end. Report to the state on any that apply in your city to make sure they are
state licensed.
Beer Licensing:
You must have your own city ordinance to regulate beer sales
effectively. Any business selling beer for consumption on premises or
selling liquor must be licensed by the state. The Alcoholic Beverage
Control Commission is over these licenses. 32B-1-101 through end.
Proximity regulations: 32B-1-202
Definition of beer: 32B-1-602
Wholesaler: 32B-13-301
Advertising: 32B-1-206
Dram shop/on-premise consumption: 32B-5-201(G), 32B-5202(G), 32B-5-310(G), 32B-6-705
You can see that this is a long section. A beer license ordinance,
including the regulating of the local consent, which is required before a
license, is issued by the Commission. A temporary beer sales permit can
be obtained from the state, but you must have this included in your own
ordinance. Please notice that the attached ordinance only requires a
background check through BCI. You should be aware that this background
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check is performed only within the state of Utah.
Cell Phone license:
Is not a tax, but is a legitimate business license on telephone service.
Please see UCA 10-1-401 to for rules applicable to Cell Phones
City authority to license:
Cities can require license for businesses, 10-1-203.
Contractors:
State requires license with them. Please see UCA 58-55-302 for rules
regarding contractors.
Firearms sales:
A federal license is required to sell guns. You can call and ask the
Department of the Treasury-Bureau of Alcohol, Tobacco, and Firearms
to send you a list of those selling guns in your city. Call or write: Area
Supervisor, 1325 J Street, Suite 1530, Sacramento, CA 94814, (916)4985095. Better yet, go to: Federal Firearms Reference Guide 2005 at
Federal Firearms License Explained:
State regulations on firearms for manufacturers and sellers are found at
UCA 53-5-703 or http://publicsafety.utah.gov/bci/FirearmLaws.html. Here
in Utah, regulation of firearms is reserved to the state.
Food sales:
Any food sold should have county or city health department approval.
Also, Utah Department of Agriculture approval is required especially for
those selling packaged food items they make themselves. You may
contact them at:
Utah Department of Agriculture
Division of Regulatory Services
350 North Redwood Rd, Salt Lake City, Utah, 84114-6500
801-538-7124
Or go to the Department of Agricultural Federal Government Page at:
http://www.usda.gov/wps/portal/usda/usdahome?navid=food-safety or
Food Safety at www.foodsafety.gov/ or
State Department of Agriculture web page at http://ag.utah.gov/ or
USDA web page at www.usda.gov.
Fund raisers:
Fundraisers should be registered with the state. See UCA 13-22-1 to end.
Yes, even those firefighter associations need to register with the state.
Home occupations:
This is entirely up to your local governing council. You can call the
Recorder of any city to get a copy of different ordinances.
Insurance companies:
Cities cannot require payment of license fees, pre-empted by state, UCA
31A-3-102.
They can require a business license, however.
Liquor Licensing:
Governed by the state. Contact is Nina McDermott or Rob Hansen at
(801) 977-6808, if you need help. Web site: www.alcbev.state.ut.us. Their
address is: Utah Department of Alcoholic Beverage Control, P. O. Box
30408, Salt Lake City, UT 84130-0408.
Massage therapists:
Business Licensing
State and local jurisdiction, UCA 58-47b-305. Preempted for professional
regulations by state; cities can only require license to do business.
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Offensive businesses:
To see what you can do about an offensive business, see UCA 10-8-66.
Peddler selling own produce:
A peddler selling produce he/she has grown on his/her own property and
selling from that property is protected under Department of Agriculture
regulations. Please see Food Sales above for reference sites.
Peddlers/Solicitors:
Already covered under Federal Requirements and First Amendment
Rights.
Pre-school/Daycare:
You should have your own local ordinance regulating where these can be
located and how you will regulate them.
Rental Dwellings:
Yes, you can license these. If you are going to regulate the rentals, it is
vital that you check the UCA to see what you can and cannot do. See 108-85.5.
Security companies:
Must be licensed with the state. See: UCA 58-63-301502
Sexually Oriented
Businesses (SOBs):
Watkins/Tupperware/
Avon/etc.:
Provisions for businesses
of all sorts:
Business Licensing
Already covered under Federal Requirements and First Amendment
Rights. These may only be licensed where specified by your code.
Yes, these can all be licensed, no matter what they say. Each person
selling should have a local license. This is an example of a home
occupation.
Look in the Utah Code under Occupations or under Professions and
Occupations.
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