Bluffton updated its business license rules. Here’s who the fees will help — and hurt

To companies and people looking to do more business in Bluffton: the town believes it has made your lives easier.

Bluffton Town Council approved a business license ordinance update at its Aug. 14 meeting that will unify practices with those of most municipalities in South Carolina and provide incentives to both new businesses and those operating within Bluffton town limits.

In a news release, the town summarized the changes. The new ordinance:

• Provides lower fees for in-town businesses.
• Provides discounts for start-up businesses during the first few years in business.
• Changes the renewal deadline for business licenses to April 30 from April 15.
• Changes the business classification system from more than 20 types to eight.

Last fiscal year, Bluffton brought in approximately $1.95 million in business-license revenues. However, the town expects the new ordinance rules to bring in $1.75 million at best — roughly a $200,000 decrease from last year.

The new ordinance would impact Bluffton small businesses that cannot afford fees that don’t take into account their smaller revenue streams. For example, a new small business in Bluffton that once paid a base-fee equivalent to its larger-scale peers would now pay a first-year fee based on 40 percent of its revenue, not all of it.

It also would see a further 10-percent reduction if it opened two or more locations in Bluffton town limits.

Trisha Greathouse, the town’s director of finance and administration, said in a Monday phone call that the town has accounted for this based on expected continued growth throughout Bluffton. It’s willing to take the hit in business revenues, though, to incentivize new business and be more consistent with other towns, she said.

“Most, if not all, of our regional partners have already adopted similar policies that the state municipal association has recommended,” she said. “Doing this simplifies how businesses can operate in Bluffton and improves the process for them to follow our ordinance.”

Mayor Lisa Sulka said in a phone call Friday that, even though some of the measures will bring in less money for the town, the new updates will create opportunity for business expansion and development.

“For a lot of people, the businesses already operating here in Bluffton, there’s really no difference,” Sulka said. “But it gives a discounted fee to new businesses and benefits those already here looking to open a second location and more.”

New business owners will pay lower fees in the first year that gradually increase for the second year before plateauing in the third year and thereafter.

Sulka also clarified that new businesses in town can take advantage of any incentives they’re eligible for, not just one of the lower start-up fees or the in-town discount.

“It’s not like a promo code online where you can only use one per order,” she said. “You can use them all if you can.”

Businesses based in Bluffton will also see lower fees than those elsewhere in Beaufort County, including on Hilton Head Island, even if those businesses come from outside the town to work in Bluffton.

Sulka said that increasing rates on businesses that operate in Bluffton — even if they’re not based in the town — may be the biggest downside of the changes.

“Out-of-town businesses doing business here, but based in other places, will see their fees increase,” she said. “We asked staff what to do on whether we should double those fees or multiple them by one and a half or even give partial incentives, but we ultimately stuck with the finance department recommendations (to charge more to outside businesses).”

Talk of vendors having business licenses to operate in Bluffton is not new. Last summer, members of Town Council expressed how difficult the process was, even for vendors applying for one-day licenses.

Two months later, in August 2017, Town Council changed its policies to make them more “business-friendly” and allow for an easier time for short-term vendors to operate in Bluffton.

The ordinance update originally came up for a vote in June, but the council sent it back for review after residents expressed concerns about licensing fees that they said had a disproportionate and hefty impact on small businesses.

Sulka said the town consulted the Municipal Association of South Carolina for suggestions and also looked at other local areas after which Bluffton could model its own business licensing policies.

In fact, Greathouse said at the council meeting that Hilton Head Island’s annual renewal deadline for business licenses on April 30 influenced Bluffton to change theirs to the same date, in order to avoid confusion between the two neighboring towns.

Although the ordinance passed, Greathouse suggested that the ordinance could allow for adjustments based on initial findings from the changes in 2019.

“As new renewals come in between Jan. 1 and April 30, we’ll track and see how the trends look and adjust for the rest of the year,” she said Monday.

The ordinance updates will take effect Jan. 1.

Any business owners or residents with questions on the update can call Bluffton’s Business License Division at 843-706-4501 or go to the town’s temporary Customer Service Center on Pritchard Street.

This story was originally published August 28, 2018 at 8:55 AM.