City staff presented a proposal for a new general business license intended to create a comprehensive business registry for Tempe, fill gaps in city data and improve outreach to local enterprises.

Laura Calder, Financial Services director, and Josh Bice, tax and license manager, described the proposal during the April 10 work study session. Staff estimate there are more than 30,000 licensable businesses operating in Tempe but have reliable information for about 1,300. The general license would collect deeper business demographics (business type, minority/disadvantaged ownership, employee counts and revenue groupings) and allow the city to publish an interactive business map and conduct targeted outreach.

Staff recommended the license apply to permanently located businesses in Tempe (including home‑based businesses operating as a business) and many contractors working in the city (one license for contractors with multiple job sites). Exemptions proposed include entities already subject to a regulatory license with the city (approximately 1,300 existing regulatory licenses), temporary vendors at special events, casual sales (fewer than four times per year), certain childcare that is regulated under Arizona statute 36, independent contractors acting on behalf of a parent company, and in-home tutoring when not in a commercial location. Staff said state law prohibits requiring licenses for federal or state government agencies and cited other state-licensed categories such as real estate brokers, out-of-state businesses, residential rental properties and captive insurers as not subject to the proposed city license.

The recommended fee is $25 annually; staff noted the existing transaction privilege tax (TPT) license fee is $50, so typical combined annual licensing would be $75 for businesses that require both. To encourage early compliance, staff proposed a sign-up period: businesses that register before Jan. 1, 2026, would not pay an initial fee and would not be required to renew until Jan. 1, 2027. For businesses that miss the initial free sign-up window or fail to renew within 30 days after expiration, staff proposed a 50% penalty (an additional $12.50 on a $25 fee) consistent with other city regulatory licenses. Administration would be handled by the tax and license division; staff said other departments (fire, police, building) would not be required to separately approve the general business license beyond normal regulatory reviews.

Calder said staff had met twice with the Tempe Chamber of Commerce and incorporated feedback; council members expressed general support. Discussion among council members focused on easing compliance for long‑established and newer small businesses: Council Member Keating suggested waiving the first year for new businesses as an incentive, while Vice Mayor Garland and others argued the proposed $25 fee was small enough that the current sign-up approach is sufficient. Staff said paper applications and in‑person help would be available for those less comfortable online.

If council directs staff to proceed, the proposal’s ordinance was scheduled for council hearings on May 22 and June 5 and — if adopted — staff proposed an Aug. 1 effective date to start the sign-up period.