Chapter 14 - Business Licensing - Utah Municipal Clerks Association by wuxiangyu

VIEWS: 1 PAGES: 10

									                                                           CHAPTER 14
                                                       BUSINESS LICENSING
                                                          Chapter Outline

1.   Section 1 – Business Licensing
         Utah Business License Association (UBLA) ............................................................................... 1
         National Bureau of Business License Officials (NBBLO) ........................................................... 1
2.   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
3.   Section 3 – Requirements of Your County
         Health Department Regulations ................................................................................................... 3
4.   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
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
6.   Section 6 – Main Areas of Business Licensing ........................................................................... 6, 7
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



                                                                       14-1                                         updated Jan. 2010
                                            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 non-profit 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 a 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
three-year period from the date of issuance. After that, an official can re-certify by listing the continuing
education received through attending conferences. 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 NBBLO, 5110 South Ivy Brook Circle, Murray, Utah 84123, (801) 261-8266, Fax: (801) 261-
0543, mem@nbblo.org.



                                                    14-2                           updated Jan. 2010
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 §10-1-
203 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

                                                    14-3                            updated Jan. 2010
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:         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.

A.      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 register their names within their Articles of Incorporation
        or Organization or within the Certificates of Limited Partnership.

        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)       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.
              b)       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.
              c)       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.

                                                      14-4                            updated Jan. 2010
     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 Corporation and Commercial Code
                     Department of Commerce
                     Heber M. Wells Building
                     160 East 300 South
                     P. O. Box 45801
                     Salt Lake City, Utah 84145-0801
                     (801) 530-4849
                     Web Address: www.commerce.state.ut.us

             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.state.ut.us 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 $20 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 $50.

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.



                                                14-5                            updated Jan. 2010
     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                           - Bait and Switch
             - Direct sales misrepresentations                 - Below cost selling
             - Pyramid scheme/plans                            - Consumer education
             - Travel scams                                    - Home product sales
             - Work at home schemes                            - Chain letters
             - Fraudulent business opportunities               - Free prize offers
             - New automobile warrant problems                 - Sweepstake guarantees
             - Mechanic & garage repairs/overcharges           - Door to door sales
             - Health spa contracts                            - Price discrimination
             - Consumer credit repair scams                    - Retail rain checks
             - Retail refunds                                  - Telemarketing/recovery rooms
             - Unfair competition                              - Three day right to cancel
             - Credit repair clinics                           - “Free” ad offers
             - Repair complaints (other than motor vehicle)    - Deceptive labeling
             - Automated telephone calls                       - Illegal charities
             - Identity Theft                                  - Dating services

D.   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.

                                                 14-6                           updated Jan. 2010
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. 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
               will have problems in regulating it because you have no ordinance. No matter what the

                                                   14-7                           updated Jan. 2010
                  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. See 32A-1-101 through end.

                                           Proximity regulations: 32A-10-101-201
                                           Definition of beer: 32A-1-105
                                           Wholesaler: 32A-11a-106
                                           Advertising: 32A-12-401
                                           Dram shop/on-premise consumption: 32A-10-202

                                  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 check is performed only within the state of Utah.

                                                     14-8                            updated Jan. 2010
Cell Phone license:          Is not a tax, but is a legitimate business license on telephone service - 10-
                             1-200. City can charge $1.00 per cell phone.

City authority to license:   Cities can require license for businesses, 10-1-203.

Contractors:                 State requires license with them and one business license in the city in
                             which the main office is located, 58-55-302(1)(b).

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, 801 K Street, Suite 921, Sacramento, CA 94814, 916-551-
                             1323. Better yet, go to: Federal Firearms Reference Guide 2000 at
                             www.atf.treas.gov/pub/fireexplo_pub/2000_ref.htm, or Federal Firearms
                             License Explained: www.rogersrarities.com/ffl.htm or Firearms - ATF
                             Online at www.atftreas.gov/firearms.

                             State regulations on firearms for manufacturers and sellers are found at
                             78-27-64. 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, 84116
                             801-538-7124

                             Or go to the Department of Agricultural Federal Government Page at:
                             www.wyagric.state.wy.us/relatedinfo/agdir/fedgov.html or
                             Food Safety at www.foodsafety.gov/ or
                             State Department of Agriculture web page at www.ag.state.ut.us/ 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, 31A-
                             3-102. They can require a business license, however.

Liquor Licensing:            Governed by the state. Contact is John Bryant 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 84130-04408.


                                                14-9                           updated Jan. 2010
Massage therapists:            State and local jurisdiction, 58-47b-305. Preempted for professional
                               regulations by state; cities can only require license to do business.

Offensive businesses:          To see what you can do about an offensive business, see 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 10-
                               8-85.5.

Security companies:            Must be licensed with the state. See: 58-63-301 to 502.

Sexually Oriented
Businesses (SOBs):             Already covered under Federal Requirements and First Amendment
                               Rights. These may only be licensed where specified by your code.

Watkins/Tupperware/
Avon/etc.:                     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.

Provisions for businesses
of all sorts:                  Look in the Utah Code under Occupations or under Professions and
                               Occupations.




                                                 14-10                          updated Jan. 2010

								
To top