DC’s Department of Consumer and Regulatory Affairs (DCRA) on December 31, 2008, launched a new license category: the Basic Business License for General Business or the General Business License, a new category of the Basic Business License (BBL) which already covers many existing business categories. Does your business need it? Well, what I’ve discovered is, regardless of what the DCRA materials say, if you don’t already have a license, then the answer is “Yes”. Probably.
The Capitol Hill Association of Merchants and Professionals has hosted two information sessions at Hill’s Kitchen with DCRA representatives (who arrived 30 and 45 minutes late for the respective sessions) in as many months but it is still difficult to determine who really needs the license and the deadline for applying before a hefty $2000 fine is imposed.
Do you have a DCRA licensing story to share?
The initial cost to get the license is $295 with a $100 yearly fee and renewal required every two years. The program has rolling application deadlines based on zip code. The first licensing deadlines were December 31, 2008 – the same day the program went into force. But the lack of publicity for the program and inaccuracies in how the requirements are communicated has led many to miss deadlines or determine their business does not need the license until attending a CHAMPS-organized information session, where they discover that may not be the case.
For example, the first sentence of the DCRA-issued flier says “… the District of Columbia will require all business that pay business taxes to have a District of Columbia Basic Business License”. Perfectly clear. Then two of the common forms of corporate organization for small businesses, the Sole Proprietorship and Limited Liability Company (LLC) are not included because all profits and losses are passed through to the owner(s) and, therefore, taxes are paid via individual tax returns, not through the business. (A technical note to satisfy the CPAs and tax attorneys out there: LLC’s may elect to be treated as corporations for tax purposes but, oftentimes, do not.) My own business is an LLC and when I made this point at the first CHAMPS information session I was told to ignore that discrepancy because, since I was in the business category of “consultant”, I did indeed need to get the license. Conclusion: either someone at DCRA does not understand the legal and tax implications of the various forms of business organization or the point is simply to rope in business owners to pay a fee from which, heretofore, they were exempt.
Equally disappointing is DCRA representatives’ cavalier approach and lack of information during the “information” sessions. As noted previously, featured DCRA speakers have arrived embarrassingly late to these sessions and been woefully unprepared to answer legitimate questions. In my experience, we were told repeatedly to refer to the one-page information flier to answer questions – the same information flier carrying the first sentence we were told to ignore because it is inaccurate. Also, as a business owner I am not loathe to pay the appropriate taxes and fees. The taxes and fees should support the smooth operation of city services. Which is why I was disappointed when DCRA could not tell me where the new licensing fee revenue would go. I can be consoled somewhat if it goes back to DCRA, and especially if it goes back to specific budgetary line items that support the growth and improvement of the business environment in the city. If, however, it goes to a general fund, then I’d like to speak to my Councilman about that. Despite my direct question and subsequent attempts by phone and Twitter, I still don’t have the answer to that question nor have I been steered towards someone who can help.
The real kick in the gut is that I think DCRA has a great website. Everything is there, its easy to navigate (for a website with so much content), and you can print all the forms – though online filing is woefully missing. I actually thought it was a very friendly site so when I went to file all my paperwork while setting up my business a year ago, they had made a good impression on me before I even went in the door. Sadly, that lasted about 5 minutes. If only the reality lived up to the virtual.
Thank you for your post. And thank you for raising some very valid points and we apologize for any confusion. With an ‘almost’ all-encompassing license like this it is difficult to provide information on all of the different situations, scenarios and specific tax structures of every business in a direct mailing. And you are absolutely right in your criticism. There was also no excuse for the tardiness at those two meetings. We either bury the masses with too much information and cause confusion or provide too little, as you suggest, and upset the few. It was a tough decision and why we decided to push people to Web where more complex answers to more complex questions could be found.
We have however updated our Website Q and A’s regularly as issues are brought to our attention. By no means did we mean to create the impression that we were being cavalier. In fact, we have walked city block by city block distributing packets and answering questions face to face for the past 7 months visiting more than 4,000 businesses. We have had two staff dedicated to this 4 out of 5 weekdays. We have also held coffee hours in dense corridors to assist folks with questions.
Again, we apologize for not meeting your expectations and are definitely listening and will make some adjustments accordingly. Please have anyone and everyone you know who is still confused or needs further assistance to email me directly at michael.rupert@dc.gov. Thanks again for your input, it is appreciated.
Mike Rupert, DCRA
Thanks, Mr. Rupert. The fact that your position even exists is, I believe, reason to celebrate. I’ll also note here your response to my inquiry on Twitter: fees from these DCRA licenses do go back to DCRA, which I think is a good thing vs. going into a general fund. I did a little math, based on what you said about the face-to-face outreach, to see how some of the existing money from licenses is being spent. Each of the two staff dedicated to that effort have been visiting around 31 businesses per day for the past 7 months. That seems like a huge task – and though I don’t know anyone in my admittedly small group of local business owners who has received a visit, I applaud the effort. Honestly, more than anything I’d just like to see a strong DCRA we can have confidence in, instead of playing to the stereotypes of disorganized city government.