Dewey Beach officials say the town's occupancy-based business license fees were never properly enforced.
Dewey Beach — Bars and restaurants in Dewey Beach have been granted a reprieve: business license fees, usually due Jan. 1, will not have to be paid until March 1.
Dewey Beach Town Council approved a 9 percent, across-the-board increase in business license fees for hotels, restaurants, retail shops and renters Dec. 10. But town officials say poor enforcement and confusion over state law have forced town council to re-evaluate business license fees.
At its Jan. 14 town council meeting, Mayor Diane Hanson said business license fees have not been correctly calculated for the last five years.
In April 2007, a previous council approved a flat fee per business plus an occupancy rate of $5 per person. The occupancy-based fee structure lowered license fees for most businesses, many of which were paying higher fees for staying open late or not having public restrooms.
But Hanson said town officials do not have accurate occupancy rates for businesses. Hanson said it is the town code enforcement officer’s responsibility to collect and manage the data. “I gather it was collected in 2007,” she said after the meeting. “Now, they can’t find the information.”
Contacted for comment, Building Official Bill Mears said only he was too busy to respond.
Hanson said the rates are based on seated occupancy rates, which cannot be collected in the off-season, when many Dewey Beach businesses are closed, and their occupancies cannot be verified. “Most of the owners are elsewhere,” she said.
If council combined the correct calculations with the 9 percent increase, the fee for some businesses would increase by 100 percent. “We do not intend to raise anybody’s business license by 100 percent,” Hanson said.
Chief Financial Officer Bill Brown said the delay of payment for business licenses would have little effect on the budget. “The transfer tax revenue is covering up for any shortfall we might have in this area,” he said. Brown said transfer tax revenue generated $280,000 more than anticipated this year.
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