Council schedules business-license ordinance for action to adopt higher small-business threshold

Interim Finance Director Terry Schnitzer briefed the council on a proposed ordinance amending Shelton Municipal Code section 5.04.040 to align with a state-recommended business-license model. Schnitzer said the statewide model (adopted in 2018 and effective January 2019) established local participation in the state business-licensing system and that a newer model raises the threshold for exemption from a local business-license requirement from $2,000 to $4,000 of annual gross receipts for businesses that do not maintain a place of business in the city.

Schnitzer said the threshold will be adjusted every four years by the model using the Consumer Price Index and that the city must adopt the change within 75 days to be effective January 1, 2026. Councilmembers asked whether $4,000 was the right level for local small businesses and whether the change would affect sales-tax reporting or health/building inspections. Staff said health, building and L&I requirements still apply but the city may not proactively check those for businesses that do not apply for a license under the new threshold. Schnitzer said the city’s existing local tax thresholds (B&O and sales-tax reporting) remain in place.

Councilmember Gutierrez asked whether the draft applied to businesses located inside the city or to out-of-city businesses that come into the city; staff clarified the $4,000 threshold applies to non–brick-and-mortar businesses operating within the city limits but located outside the city. After brief discussion, the council voted to place Ordinance No. 2032-0725 on the Sept. 16 action agenda for further consideration.