Hollister council members received a report this week on business license fees for event vendors.
Staff officials Monday requested interpretation of the fees charged to vendors at events like the downtown farmers’ market and motorcycle rally.
“We’re asking the city council to interpret the code,” said Mary Paxton of the city’s development services department. “What we’d like to do is come back with a resolution just memorializing it, making it clear because there’s been some variable practices in the past.”
In the midst of the discussion, Councilman Karson Klauer pointed out that the business license fees are actually taxes.
“Just for semantics, so we’re all on the same page, it’s a business license tax,” Klauer said. “As a business, you don’t receive anything for the license. So it’s a tax. If we’re going to call it a fee, I know people who are going to assume that we’re going to start providing some sort of service for the fee, which we aren’t. So we might as well just continue calling it a tax.”
Staff recommended the following:
Vendors at the farmers’ market and free, one-day festivals selling “tangible” products should be issued an annual business license of $30 because the events or products sold are seasonal. An example of this would be a Christmas tree vendor. Vendors wouldn’t be required to secure a license for each event.
Vendors at festivals taking cash deposits or orders for cash on delivery of purchases should be categorized as solicitors and pay a business license tax of $225, in addition to posting a bond as required by the city’s municipal code.
Organizers of events that charge an admission fee can apply for a business license tax of $750 for “Amusement of periodic nature.” This would apply to events like festivals, carnivals and concerts. Any for profit vendors at the event would be covered under the umbrella of the festival permit, meaning an additional business license tax wouldn’t be required. However, if a nonprofit event organizer requests exemption from the tax, any for profit vendors would be required to obtain a business license.
Vendors at multi-day events like the motorcycle rally would be categorized as “Itinerant merchants” and would pay a business license tax of $225, in addition to posting a bond as required by the city’s municipal code.
As council members talked it out, Director of Administrative Services Brett Miller informed them the city’s business licenses are specific to sites.
“So if you’re having business at another location, you have to have a business license for that other location,” Miller said. “That’s usually where we get a lot of pushback from businesses.”
Mayor Ignacio Velazquez said that should be clarified.
“I think if we have a local business that has a license. If they want to sell somewhere else for that weekend event, let them sell,” Velazquez said. “They have their license, they’re here year round. I don’t see the need to charge them an additional fee.”
He continued on to say that the report made sense.
“I think most vendors understand there’s a license fee, license tax, is part of doing business. If it’s a nonprofit, we can take care of that issue. I think now that I know about this other tax on existing business, i don’t think that’s fair for local businesses that are here all year. If they want to show up to the farmers’ market and sell their products, that’s great. Let’s help them make some more money. That’s what we want to do with our businesses. I think you’ve laid this out pretty well. It makes a lot of sense. I think we do need to clean up some of those other areas though.”
Councilman Ray Friend also said he’d like some things cleaned up, especially when it comes to nonprofits. Miller stressed that there isn’t a tax on nonprofits.
“It’s usually the vendors that set up at the different festivals or the farmers’ market is where the issue is,” Miller said. “We charged the same thing in effect of what the rally is. The Olive Festival said they’re not going to be able get vendors to show up to that, or even the same with the farmers’ market. So that’s where I think we need to put everybody in their right, correct box so we’re fair to these different entities.”
