September 29, 2016

The Cost of Starting a Small Business in Salt Lake City

Downtown SLC

Downtown SLC

8Y TH3 NUM8ERS

Thinking about starting a business in Utah? It pays to do your homework. The first step is registering with the state at the Utah Department of Commerce, Division of Corporations and Commercial Code, the Utah Department of Workforces Services, the Utah State Tax Commission, the Utah Labor Commission, and the Internal Revenue Service. You will also need a business license from your local municipality. In addition to all that, some businesses, such as insurance agents, doctors and dry cleaners, need special licenses and permits.

The State does have a “one-stop” online business registration site to help facilitate the process. The fee collected on the site is the filing fee for the Utah Department of Commerce, Division of Corporations and Commercial Code. That fee ranges from $22 to $52 and is non-refundable. The cost for incorporation is $70. There are also fees associated with setting up a federal tax ID number for the IRS.

It can be a confusing process, but the state does offer help. At http://business.utah.gov you will find the Utah Small Business Administration. This site offers help in navigating the process. There is also a .pdf publication called “Doing Business in Utah” found at http://tax.utah.gov/forms/pubs/pub-38.pdf that provides step-by-step information.

If, for example, you are a plumber starting your own business in Salt Lake City, besides the filing fee, you would need to pay an application fee of $110, a continuing education course approval fee of $40, a plumber tracking fee of $1.00/per credit hour and an apprenticed plumber tracking fee of .24/per credit hour. A Salt Lake City license would cost $114.07 per year. If your business was in Cottonwood Heights the base fee is $170, in Murray and Holladay it is $100.

There are also code specifications to consider. There are fees for a building inspection, and you may need to hire an architect if you are planning modifications along with licensed contractors to do the work.

If you want to open a restaurant and serve liquor, beer or wine, you will need to apply for a license. If granted, license prices range from $300 for an on-premise beer recreational amenity to $10,000 for a full-service restaurant. These fees are in addition to the application fee.

The dream of self-employment is one many people share. A good business idea can be lucrative as seen by local success stories such as Tony Caputo’s and Squatters Beers and Pubs. But getting off the ground isn’t easy or cheap. We at Utah Stories would like to see more government incentives offered to local businesses. Bringing in out-of-state corporations and businesses might look good on paper, but real jobs and tax revenue come from local businesses and entrepreneurs.