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Georgia lawmakers could look at easing regulations for home-based businesses

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(The Center Square) — Georgia lawmakers could weigh changes to a state law that allows local jurisdictions to levy licensing fees on home-based businesses.

State lawmakers passed legislation roughly 30 years ago allowing cities to impose business and occupation requirements. While lawmakers have revised the law, local governments may levy and collect occupation taxes on any businesses with an office in the jurisdiction and require business owners who operate out of their homes to obtain an occupancy permit.

Earlier this month, Republican lawmakers announced a “Red Tape Rollback,” an initiative to streamline state government and alleviate regulations facing small businesses. When asked during a media briefing, Lt. Governor Burt Jones indicated lawmakers might look into regulations facing home-based businesses.

“The great thing about having a citizen legislative body is a lot of people are involved in our day-to-day businesses, or something outside of [the General Assembly], which gives us a unique perspective on things,” Jones, a Republican, said. “A lot of the times, things that contractors run into or small businesses [is] the slow process … at the local level. So, whatever we can do to try to alleviate some of those burdens, we’re going to look at those.”

Jurisdictions generally say they need to charge fees to offset the costs of increased services that businesses demand and to regulate them, even one-person home-based businesses.

“As a business owner, I find these regulations to be cumbersome, but I understand that states need money for the maintenance of local services and infrastructure,” Farhan Siraj, CEO of OSHA Outreach Courses, told The Center Square via email. “And businesses, even those with no employees, utilize roads and other essential services that licensing fees can help support.

“When it comes to distinguishing between home-run businesses and someone working for a company, I believe the impact on neighborhoods plays a significant role,” Siraj added. “States and cities believe that businesses have a more significant influence on communities than someone who’s working full-time for a company.”

Many business regulations on the books predate the “gig economy” when more people might be working from home.

“I think a lot of it is that so many of these regulations were passed decades ago when the economy was a lot different,” Edward Timmons, director of the Knee Regulatory Research Center at West Virginia University, told The Center Square. “People would stick in one job, and they wouldn’t necessarily move all that much from state to state. … A lot of these regulations have staying power. There are select folks that benefit.

“In economics, we talk about concentrated benefits and dispersed costs,” Timmons added. “You have a select group of people that benefit from the status quo, and they’re going to fight tooth and nail to keep the status quo intact, and everyone else faces the costs and consequences of these laws. But the problem is that the costs, at least on an individual basis, tend to be small.

“So, individually, we don’t necessarily have the ability to coordinate and speak with legislators; we just don’t care enough about it individually, whereas the vested interests have every incentive to mobilize and engage with legislators and make sure that things don’t change, that things stay the way that they are, because they’re benefiting from the way things currently are set up.”

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