There was a 10.53% decline in the number of business licenses issued in the first 6 months of calendar year 2023, compared to the same period in calendar year 2022.
The 3rd Quarter Performance Report of the Department of Commerce for Fiscal Year 2023 states there were 3,656 business licenses issued in the first 6 months of 2022, but this year, there were 3,271…385 less.
DOC attributes the decline to other government department and agencies using the business license renewal process to enforce their own mandates, such as tax clearances and workman’s compensation clearances for business owners.
In addition, a lot of businesses changed ownership or legal structure from sole owner to corporation or limited liability company, or from corporation to LLCs. 81 businesses recorded a change in ownership.
Treasury now requires that before an applicant pays their business license fees, they have to obtain a tax clearance form showing the owner does not have unpaid taxes. The applicant could only be issued their business license after they obtain their tax clearance form.
DOC says this delayed the issuance of business licenses, and in some cases applications were misplaced during the wait for the tax clearance forms.
“The tax clearance process, or the renewal of business licenses, was not within the parameter of Title 27 of the business licensing law,” said DOC. “This is an impediment of the business license renewal process that needs to be addressed immediately.”
For example, according to the report, the Tax Office tends to use the business license application or business renewal application as a device to enforce their respective mandates. “It is the lack of coordination, overlapping of jurisdiction and enforcement among ASG agencies that is creating undue delays in the processing of business license applications,” said the report.
DOC has been promoting its one-day business licensing turnaround, however, the report says the delays caused by other departments is impacting this effort.
As of June 29, ASG had collected $503,881 from the business licenses issued, just $768 less than the same period last year.
