Opening a business in Salt Lake County? Your costs may depend on the city

For entrepreneurs looking to start a company in Salt Lake County, location can shape the cost of opening that business. Licensing fees vary drastically as cities determine costs and define regulations. Fees can fluctuate based on the type of business, number of employees, impact on city services and required inspections. 

On one end of the scale is Riverton, which in 2018 became the first city in Utah to eliminate all business licensing fees. The move was orchestrated by the mayor at the time, Trent Staggs, who wanted to let companies know the city was open for business. 

“He wanted Riverton to be a business-friendly community,” said Riverton Business Licensing Coordinator Angie Keller. “We’re also very user-friendly when it comes to getting a license. They click on our website and it guides them through the process. I don’t get many phone calls asking for help…I feel like Riverton has gone above and beyond, as far as pointing them in the right direction and giving them all the information they need.”

Draper’s base fee for a commercial license is $82, with additional fees for alcohol or firework sales, sexually-oriented businesses and solicitors. Murray charges $100 for a commercial license with regulatory fees on companies like auto towing, tobacco retailers, tattoo parlors and convalescent homes. Midvale has a base fee of $137 for commercial businesses with add-on charges for industries including bars, hotels, pawn shops and restaurants. 

For companies in the county’s newly incorporated areas, including Kearns, Magna and Copperton, the Greater Salt Lake Municipal Services District administers those business licenses. The district charges a $150 base fee for commercial businesses and home-based locations that have customers coming to the home. 

On the higher end of the scale, South Jordan charges $337 for a general business license application fee, with additional charges for hotels ($2,700), restaurants ($633), big box stores ($3,331) and entertainment/recreation facilities ($1,727). 

Brian Preece serves as South Jordan’s Director of Planning and Economic Development. He said the city’s licensing fee structure wasn’t put together haphazardly, but was based on a feasibility study that determined the cost impact of specific businesses to the city. More fees are placed on businesses that have a higher volume of calls for police or fire services.

“We have a fire inspection for most businesses and that’s part of the [licensing] fees,” Preece said. “Even though Riverton doesn’t have a business licensing fee…it’s being paid for somewhere. The general fund is paying for it.”

South Jordan Public Information Officer Rachael Van Cleave added, “If we weren’t to charge these fees, taxpayer dollars would be subsidizing these costs for businesses. So the fees help to take that off the general taxpayer.”

For home-based businesses, Utah Code states that cities cannot charge a licensing fee unless the business impacts the neighborhood, such as having customers or an unusually high number of home deliveries. However, several cities, including Taylorsville and South Salt Lake, charge administrative processing fees of $100 and $59, respectively, for home-based businesses. 

Riverton requires every home-based business to have a license, but there is no fee. South Jordan does not require home-based businesses to have licenses unless they operate a daycare/preschool or if they have regular clients coming to the home. 

“We made the decision to not charge for or even require a home license business,” Preece said. “If somebody wants one, then we’ll get you a license, but you have to go through the regular process, and that’s your choice.”

While getting a business license is certainly an important step in starting a business, it’s not the only step. Business owners need to make sure that the company is registered with the state and, if sales are involved, with the Utah State Tax Commission. Owners must ensure all licenses and inspections are complete before a business license can be issued. Most cities have license approval completed in two weeks or less.

The wide-ranging business licensing fees and processes across the county impact business owners and municipalities differently. For some entrepreneurs, that difference could be the deciding factor on where they ultimately locate their business.