Tempe proposes new general business license to track local enterprises

The Tempe City Council convened on April 3, 2025, to discuss the introduction of a general business license aimed at enhancing the city’s business landscape. Financial Services Director Laura Calder and Tax and License Manager Josh Bice presented the concept, emphasizing the need for better tracking of local businesses and their demographics.

The proposed business license would require all permanent businesses operating in Tempe to register, including those not currently subject to transaction privilege taxes, such as service-based businesses. This initiative aims to bridge the significant information gap, as city officials estimate that over 30,000 businesses operate in Tempe, but only about 1,300 are currently registered. The new licensing system would allow the city to provide better support and communication to businesses, including updates on city services and regulatory changes.

Key recommendations include a $25 annual fee for the business license, which is lower than the existing $50 transaction privilege tax license fee. To encourage early adoption, businesses that register before January 1, 2026, would be exempt from the fee for the first year. The council also discussed exemptions for certain entities, including federal and state agencies, and businesses with existing regulatory licenses.

Council members expressed support for the initiative, highlighting its potential to streamline business operations and improve community engagement. The council plans to hold public outreach sessions and further discussions, with two council hearings scheduled for May 22 and June 5. If approved, the business license would take effect on August 1, 2025, marking the beginning of a five-month grace period for businesses to register without incurring fees.

This initiative reflects Tempe's commitment to fostering a supportive environment for local businesses, ultimately aiming to enhance economic growth and community well-being.