When Mayor Sandy Stimpson and members of the Mobile City Council came together to offer small businesses COVID-19 pandemic help through a grant program called Ignite Mobile, some owners were surprised to find out they didn’t have a city business license, which was one of the few requirements for successful application into the program.
There was some confusion from business owners about whether a state license or county license alone would suffice, but Revenue Director Gwendolyn Hall had to correct many of them.
“It’s kind of like the coronavirus,” she said. “We don’t know how many have it and we don’t know how many are out there without a business license until someone tells you.”
Some of the confusion can be blamed in the differences in the way the city defines an independent contractor and an employee. If someone is an employee of a business, Hall said, then a single business license for the overall facility will suffice. However, if someone is an independent contractor, then the business they work for needs a license as does the individual, Hall said.
A good example of this is with a law firm. Each firm in the city has a business license for the firm, Hall said. In addition, each lawyer working for the firm has to also have a separate license to conduct business within the city limits. It is the same for barbers and hairstylists. A barber shop or salon would need a business license to cover the building and each stylist or barber renting a chair or working in the establishment as an independent contractor would need a license as well.
“If you’re an independent contractor you should have a business license,” Hall said. “It doesn’t matter if you make a dime, or a million dollars, if you’re conducting business inside the city you need a license.”
To police business license compliance, the city currently has eight license and tax investors, one for each council district and one who handles out-of-town businesses. The investigators use information from the state, as well as other business owners to make sure every business in their assigned district has the proper license, Hall said.
“We hope we have the majority of businesses licensed,” she said.
The fees paid to acquire a business license vary depending on the business itself, Hall said. Each type of business has a different multiplier the city uses to determine how much is owed for a license.
The times when her office is the busiest with new license applications is “sporadic,” Hall said.
“It depends on what’s going on,” she said.
In the summer, the city sees new building contractors and lawn care services spring up. In the fall, it’s clothing stores and businesses associated with going back to school. Mardi Gras is also a very busy time due to a number of street vendor licenses, Hall said.
As for educating business owners on licenses, Hall said the city doesn’t do anything on a set schedule, but her office does work with the Mobile Area Chamber of Commerce to get the word out about the need for a business license. The city also has information on its website to help owners navigate it.
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