City Plans Amnesty for Unlicensed Businesses

The city is ready to give incentives to businesses owners who were never aware they needed licenses to operate in San Juan Capistrano. Apparently there are many such businesses, although the exact number is unknown.

The City Council gave initial approval Tuesday night to award amnesty to those businesses that either don’t have current licenses or haven’t renewed their licenses, so long as they pay all of the taxes due as far back as 2008. The amnesty period will start May 19 and end Nov. 19.

The city laws requiring business owners and vendors to secure licenses "have been on the books but haven’t been enforced—that’s the problem," City Councilwoman Laura Freese said. "It’s our fault that we didn’t enforce it."

According to San Juan's Deputy City Manager Cindy Russell, the average cost of a business license is $68. License taxes are supposed to be paid by everyone from florists to arts and crafts teachers to peddlers to optometrists to private detectives to people who rent out their homes.

Those who fail to renew their licenses each year are subjected to penalties, which vary based on the type of business and its number of employees.

Russell said staffers have yet to receive clear direction from the City Council to aggressively seek out those businesses that do not have licenses. Enforcing the requirement is difficult, she said, because the methods to do so are tedious.

In the past few years, code enforcement has more actively sought to cross check its records with those kept by the Franchise Tax Board and the State Board of Equalization. A more accurate check would entail sending notices to each commercial property in town, but unless code enforcement officers were to actually go door-to-door, there isn't a way of seeing the individual addresses or suite numbers of offices or storefronts on each parcel, she said. 

"It’s my libertarian dream to someday remove these [license taxes] altogether," Councilman Derek Reeve said Tuesday.

He and Mayor Sam Allevato were the ones who helped come up with the amnesty policy and who suggested making changes to clarify the requirements, which were also approved Tuesday by the council.

Those changes include clarifying that property owners who rent to tenants of commercial property with several properties operated by a single person or business entity are only required to have one business license. Properties operated by separate legal entities would still need separate business licenses.

The revised language also excuses the lessors of residential property that rent a room in their home, second units on single-family lots, duplexes and triplexes.  Owners of residential property, such as apartment, houses, mobile home parks, and the like would still be subject to paying for a $15 license.

More coverage of Tuesday's City Council meeting: