Tacoma committee advances business-license code amendments, holds fees steady for 2025–26

The Government Performance & Finance Committee on June 3 voted to forward proposed amendments to Tacoma Municipal Code Title 6B to the full City Council that raise the out-of-city business-license threshold, clarify licensing definitions and make limited procedural changes to appeal timelines.

The changes would raise the minimum threshold for out-of-city businesses from $2,000 to $4,000 and update several regulatory-license fees to better cover inspection and administration costs, Danielle Larson, tax and license manager for the City of Tacoma, told the committee. Larson said staff also proposed renaming the “home occupation” license to “residential business license” and adding a definition of “mailing” to allow three additional days for service when mailed by the U.S. Postal Service to align with a 10-day appeal timeline.

Larson said the state law minimum that allows a city to set a threshold is established in Washington law (RCW), and staff recommended the $4,000 threshold to reduce the number of very small out-of-city sellers required to obtain a Tacoma license. “It’s built in the RCW,” Larson said, explaining why a minimum-exemption threshold exists. She described the increase as targeted at very low-dollar, incidental sales by out-of-city sellers.

The proposal does not change the city’s business-license fee levels for 2025 and 2026. Larson said the City increased annual business-license fees in 2023 and 2024 and directed the Economic Development Department to work with stakeholders in fall 2023 on recommendations for 2025 and beyond; stakeholders expressed a preference for stability, so staff recommended keeping fees at 2024 levels for 2025–26 and returning in early 2026 with a recommendation for the 2027–28 biennium.

On food-truck licensing, Larson told the committee that staff from Community and Economic Development have begun a stakeholder review and that any changes to food-truck licenses should be made in coordination with that process rather than as part of this cleanup. On notification and appeal timelines, staff recommended only the narrow change to the mailing definition for this package because a full alignment across departments would be complex and is beyond the scope of the current cleanup.

Committee members asked several operational questions, including whether sidewalk- or cart-style vendors face a $1 million liability requirement and why that amount was chosen; Larson said the requirement is a risk-management recommendation and that staff will consult Risk Management for further detail. Committee members also discussed when any change to annual fee levels for the 2027–28 biennium should be made; Larson said staff would return during the 2026 budget process with further recommendations after outreach to the business community.

A committee member moved to forward the proposed Title 6B amendments to the full City Council for consideration. The committee approved the motion by voice vote. Larson said the package will be presented at the full council on June 24.

Clarifying details from the meeting include the proposed $4,000 threshold for out-of-city businesses (up from $2,000), staff recommendation to hold annual license-fee levels at 2024 amounts for 2025–26, and the specific procedural change to the definition of mailing (add 3 days to the 10-day appeal timeline).