The city of Chicago hiked prices this year for some business license fees by as much as 400%, according to the Department of Business Affairs and Consumer Protection.For example, fees for two-year regulated business licenses jumped from $250 to $1,000 on Jan. 1. The new fees also apply to license re newals. On Feb. 1, the annual license fee for a charter/sightseeing vehicle increased to $1,000 from $500.Some advocates contend higher business license fees are yet another burden for small businesses facing economic headwinds, including inflation, tariffs, and higher costs for health care and labor. Weaker consumer demand and raids by federal immigration agents last fall have also hurt many small businesses in Chicago. Related Supreme Court strikes down Trump’s sweeping tariffs, sparking fierce pushback and vow of new levies “With the array of challenges facing Chicago small businesses, this is a very difficult time to double or triple business licensing fees,” Elliot Richardson, president of the Chicago-based Small Business Advocacy Council, said.In 2024, the nonprofit urged reforms to cut red tape that often stymie businesses. Its proposal was endorsed by more than 30 chambers of commerce and business advocacy groups and 15 members of the Chicago City Council.In January, Liesl Shurtliff, of Hyde Park, accompanied a friend to City Hall to get a $250 regulated business license for a small cleaning business.“We had done everything right, and the business license was approved. Then they told us the fee was $1,000,” Shurtliff said.They were shocked, but Shurtliff paid the higher fee for her friend and then fundraised later to cover costs. Her friend is an immigrant who wants to remain anonymous because she fears retaliation.Shurtliff said the city’s website listed the license fee at $250, as of Jan. 12, but the website was updated later that month.The Department of Business Affairs and Consumer Protection said it has updated all license fees on its website. It also included the new fee information in its January/February newsletter, sent industry notices and informed partners that work with small businesses.Shurtliff and her friend had spent months last year preparing her business license application. She said they had no idea the fee was going up and would have applied before Jan. 1 had they known about the price hike.Changes to business license fees were finalized late last year during city budget negotiations, Richardson said. Small Business Advocacy Council president Elliot RichardsonAnthony Vazquez/Sun-Times “While there was stiff opposition to raising these fees, doing it during the budget process made it difficult for this issue to gain traction given the other budgetary battles being fought,” he said.The higher fees took effect weeks after Mayor Brandon Johnson in December announced his “Cut the Tape for Small Business” initiative.A steep “increase in fees seems like a lot more red tape to me,” Shurtliff said. “It's prohibitively expensive for small service-based businesses — cleaning, creatives, tutors, home-based businesses — many of whom operate on narrow margins. They are barely making ends meet and can’t absorb a sudden $1,000 upfront cost.”Shurtliff said helping her friend apply for a business license was complicated and time-consuming.“It’s not easy to figure out how to do everything,” she said. “I can’t believe any small business is able to get off the ground without a ton of help.”The higher license fees “incentivizes people to operate without a business license,” Shurtliff said. “Why are we giving so many tax breaks to big businesses and not giving breaks to small businesses?”Fees for regulated and limited business licenses hadn’t been changed since 2012, according to a joint statement from the Department of Business Affairs and Consumer Protection and the Chicago Office of Budget Management.“These adjustments help maintain essential city services while supporting long-term financial stability for the city of Chicago,” the departments said.The city analyzed business license fees in other big U.S. cities and found those in Chicago were lower than its peers.“Some of our peer jurisdictions charge a much higher rate for the same service, better capturing the true cost to deliver that service to the public,” the departments said. “For example, a typical New York City regulated business license fee is $1,440, an example of the inconsistency between what the city of Chicago charges versus peer cities.”Richardson said, “We cannot turn back the clock on these fee increases and doubt Chicago politicians will take action to nullify them. They can, however, ensure the additional revenue raised through increased fees and fines are used to improve processes for small businesses.”Shurtliff said, “It helps people make a living wage when they can own a business. We want people to be self-sufficient.”Licensed businesses “are on the books. They pay taxes,” Shurtliff said. “It’s to all our benefit to make it as easy and cheap as possible to start one.”The new fees as of Jan. 1, according to the Department of Business Affairs and Consumer Protection, include:Limited business license: $500 for a two-year license, previously $250Regulated business license: $1,000 for a two-year license, previously $250Hotel license: $1,000 plus $2.20 per room for a two-year license, previously $250 plus $2.20 per roomCommercial vessel license: $600 for any passenger occupancy limit, previously $350 annual license for commercial passenger vessel (tour boat or water taxi) with 20 or more occupancy and $75 annual license fee for under 20 occupancyShared housing unit registration: $250 per year, previously $125Shared housing unit operator license: $500 for a two-year license, previously $250Application for Commissioner’s adjustment for shared housing units: $360 per application, previously no feeAs of Feb. 1, the new license fees include:Livery vehicle: $1,200 for a two-year license, previously $500 annual license feeCharter/sightseeing vehicle: $1,000 annual fee, previously $500Medical carrier vehicle: $600 annual fee, previously $500 Related Volumes Bookcafe in Wicker Park prepares to close ...read more read less