Lakewood to raise out-of-city business-license threshold to $4,000 starting Jan. 1, 2026

Becky Newton, Lakewood’s economic development manager, presented a proposed ordinance (No. 834) at the Aug. 11 study session to modify LMC 5.02.020 by raising the threshold that exempts businesses from the city’s general business-license requirement. Under the change Newton described, the exemption threshold for businesses that do not maintain a place of business inside the city would increase from $2,000 to $4,000 in annual gross receipts; the change takes effect Jan. 1, 2026. Newton said the ordinance also introduces an automatic periodic increase every four years tied to cumulative inflation for future adjustments. The change applies to general business licenses only; Newton said the state business licensing system (BLS) team requested cities adopt the change by Aug. 26 and that the city planned to place Ordinance 834 on the Aug. 18 regular meeting for adoption. Councilmembers asked whether the change would affect home‑based businesses and out‑of‑town businesses that sell to Lakewood residents; Newton clarified that businesses without a place of business in Lakewood that generate $4,000 or less in gross receipts would be exempt under the new threshold, and that businesses located inside Lakewood remain subject to the local threshold for in-city businesses (no change to the in-city threshold was presented). Newton said staff had not completed a fiscal-impact calculation but expected any revenue change to be “fairly insignificant” and offered to return with an analysis if council wanted one. No vote occurred at the study session; staff planned to place the ordinance on the next regular council agenda for action.