Municipalities in ‘business-friendly’ Georgia impose more regulations on local businesses • The Georgia Virtue

(The Center Square) – Georgia touts its business-friendly climate, but some home-based businesses face another layer of red tape: local government licensing requirements, according to a Center Square analysis.

advertisement

Nearly 30 years ago, Georgia legislators passed legislation giving cities the power to impose business and employment requirements, including taxes and government fees. While lawmakers have revised the law, local governments may levy and collect professional taxes from any business or practitioner with an office in the jurisdiction.

The result is that many cities and counties are requiring home-based businesses – an increasingly common phenomenon in the gig economy – to have residency permits.

“It really punishes the business owners who play by the rules and try to do the right thing and hit all the I’s and cross all the T’s,” Beth Milito, senior executive counsel for the NFIB Small Business Legal Center, told The Middle Square. “I think these communities use a sledgehammer to crack a nut. Instead of doing the work and analyzing what type of deal it is, they just do the initial checkbox. Are you a limited liability company? OK, you’re in.

“It saves work. It makes it easier for them and makes more money for them, frankly, for those who play by the rules,” Milito said. “But it’s absurd, and as a result you’re punishing … the business owners who are out there to do the right thing by trying to follow all the rules. They punish the rule-followers.”

The Atlanta suburb of Smyrna is one of the Georgia cities where work-from-home business owners require a residency permit to work from their home.

“Is it perfect for any business style? Maybe not,” Smyrna City Councilor Tim Gould told The Center Square. “Does it serve the goal of providing a registration process and equitably distributing the cost of the services used by businesses? I think that’s probably a good part of the purpose of the business license.”

Of the more than 2,300 businesses in the city, about 19.9% ​​are home businesses and 5.7% are home offices with no employees. In 2022, the city earned approximately $1.7 million in business license revenue, which is higher than the more than $1.3 million city officials budgeted for fiscal 2022 and the 1.5 million dollars it raised in fiscal 2021.

However, city officials can’t say how they will ensure all home businesses in the city comply with the ordinance.

“It’s certainly difficult to have policies that are ideal or perfect for a variety… of uses — in this case, different business styles and different business sizes and headcounts,” Gould said. “Having a policy that’s really perfect, so to speak, is a challenge.”

A spokeswoman for the Georgia Department of Economic Development declined to comment on local government license fees for home-based businesses.

By TA DeFeo | The Center Square contributor

Municipalities in ‘business-friendly’ Georgia impose more regulations on local businesses • The Georgia Virtue