Mat-Su considers repeal of borough business license

PALMER — The Matanuska-Susitna Borough is considering the repeal of a nearly 30-year-old law requiring companies to purchase and display a borough-issued business license.

A proposal to end the requirement is scheduled for an April 2 borough Assembly hearing.

Each borough license carries a $100 fee and must be renewed every two years. Businesses operating in Alaska must also hold a state-issued license, which carries a $50 annual fee. And those in Palmer, Wasilla or Houston city limits are also required to carry a city-issued license, which cost $25 each year.

The licensing fees can create an unnecessary burden, particularly for small or home-based businesses, borough Mayor Edna DeVries said in an interview this week.

Business license fees in Mat-Su esssentially function as a tax, according to a memo accompanying the proposal.

Borough officials do not use the license process to regulate or police businesses, and the information submitted in each business application is not used for economic development, DeVries said. The borough also does not enforce the proper display of licenses, she said.

“It just seemed to me like it was one of those things where we didn’t actually need it,” she said.

The proposal is sponsored by DeVries and borough Assembly members Dee McKee, whose district includes parts of Palmer and Wasilla, and Rob Yundt, whose district includes Wasilla.

While officials with the Alaska Municipal League said they do not track which boroughs and cities require local business licenses, they said those that do typically require them as part of a sales tax system. Others, including Anchorage, use licenses as a way to regulate certain types of businesses, such as adult entertainment or marijuana retailers.

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Mat-Su does not collect sales tax or use licenses to regulate which types of businesses can operate. Instead, certain businesses, such as adult entertainment, require a $1,500 conditional use permit.

Information on the total number of business licenses currently registered with the borough was not immediately available.

The borough collected about $630,000 in business license fees in fiscal year 2023, according to the proposal memo, with about $94,000 of that paying for the salary of a full-time borough employee who manages the licenses.

Losing that income will have a “negligible impact on the borough’s finances,” the memo states. That’s because repealing the fee would not eliminate the employee from the system. Instead, the change could free up time to apply for state and federal grants, which bring in far more than the licenses, DeVries said.

“Within the administration, one of our greatest needs with all of the grants out there is to have somebody who can have some more time,” she said.