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Six-month program aims to waive penalties for unlicensed businesses while potentially generating $725,000 in revenue.
REDLANDS, Calif. — The City of Redlands plans to implement a Business License Amnesty and Compliance Program to address hundreds of businesses operating without proper licensing.
Why it matters: The compliance program represents the city's first active business license enforcement effort since 2017, aiming to help businesses achieve compliance without penalty burdens.
Details: The six-month initiative, scheduled to run from May 1 to October 31, 2025, will waive late payment penalties for businesses that apply for or renew their licenses during this period.
The program comes after an audit conducted by Hinderliter De Llamas & Associates (HdL) revealed that many businesses within Redlands may be operating without required licenses. The Revenue Division has collaborated with city departments, HdL and the Redlands Chamber of Commerce to develop an action plan aimed at increasing awareness and compliance.
"During this process, it became evident that many businesses lacked awareness of the City's business license requirements, with some businesses operating without the necessary license," notes the staff report presented to the City Council.
How it works: The amnesty program includes several key components designed to create a more business-friendly environment while improving compliance with licensing requirements.
New or delinquent businesses must pay the business license tax for the current year and up to two prior years, depending on when they started operations. Businesses requiring departmental review, permits or inspections will have up to six months from their initial application date to complete the process and still qualify for penalty waivers.
The initiative also features an educational campaign to inform businesses about licensing processes and tax requirements. Information will be distributed through the city's website, social media, direct mail and the Redlands Chamber of Commerce, with HdL covering distribution costs.
Additional reminder notices will be implemented, including two automated phone call reminders before penalties are applied, supplementing the current practice of multiple email and mailed notices.
“This is fantastic,” said Council Member Paul Barich. “We want to support the business community. After all, we wouldn't have what we have without the business community.”
The impact: Based on HdL's experience implementing similar programs in 17 cities across Riverside and San Bernardino counties, including Corona, Fontana, Ontario and Upland, the company projects significant financial benefits for Redlands.
"HDL projects that the implementation of the Amnesty and Compliance Program could net an estimated $725,000 in additional revenue, which equates to about 12% of the City's current business license revenue," according to the staff report.
Over the past three years, Redlands has collected an average of $136,579 annually in late fees. These fees will be waived during the six-month amnesty period, which is expected to significantly increase the number of businesses applying for licenses.
The program's implementation costs will be covered through a percentage-based fee structure. For new businesses opening on or after the current date, a 14 percent processing fee will be deducted from collected business license taxes before remittance to the city.
Businesses that are out of compliance, applying for a new license or renewing an expired license will face a one-time 40 percent processing fee deducted from collected taxes.
Despite these fees, city officials expect a positive net financial impact as the program recovers previously uncollected taxes. The initiative is designed to be self-sustaining, with HdL covering outreach and educational material costs.
“Ideally these funds could be used to facilitate new opportunities to support the business community, including things like addressing downtown parking, in-kind requests, permit center, customer service and more, “ Evan Sanford, executive director of the Redlands Chamber of Commerce, said during the April 15 council meeting. Sanford emphasized that the chamber is supporting the program from a standpoint of fairness, not enforcement. “Our role as an organization is to advocate for all of the businesses of Redlands, especially those that follow the rules and invest in their community and contribute to the local economy.”
Background: The Revenue Division began efforts to streamline the city's internal business license workflow in December 2022, developing a "How to Start a Business in Redlands" guide to assist local businesses in obtaining licenses.
HDL collects data through government-owned databases, such as tax remittance filings, fictitious business names and information filed with the Secretary of State. The company also uses open-source databases like Google Maps, Yelp and Angie's List to locate businesses operating within city limits.
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