Columbia’s New Business License Rule Provokes Complaints

February 28, 2012

Local business owners have been complaining about the new Columbia, SC business license requirement that now obligates business owners to disclose sections of their income-tax records when applying for a city business license.

Columbia’s business license fees are based on businesses’ gross receipts. Research done by the city’s business license department has revealed that as much as 40% of local businesses have reported lower incomes on their business license applications in order to save on business license fees. This resulted in an approximate $100,000 loss to the city each year.

With the new business license requirement, city officials can now check that the amount claimed to be the gross income on applicants’ business license forms matches the amount filed for with the IRS.

The State reports that business owners are complaining about the loss in privacy and the potential risks involved with revealing their businesses’ private income information.

“Councilwoman Leona Plaugh, who brought up the issue, said she’s received complaints that the requirement sends the wrong message to the business community. ‘We’re in the era where we’re trying to be more business friendly,’ Plaugh said. ‘The reaction I’m hearing from the community is that this is going in the wrong direction.’”

To appease worried business owners, city officials have agreed to shred the documents that contain private information as opposed to storing them.

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