Tucson businesses will face a new $45 per year annual renewal charge from the City of Tucson for their business privilege license under a recommendation going before the City Council Wednesday (Sept. 5).

That means about 21,000 license holders − more than half the 40,000 licensed businesses in the city − will see a fee where they haven’t had one before.

On the other hand, the 12,000, mostly service providers, operating under an occupational license and another 7,000 that must have both licenses, will see the elimination of fees associated with occupational licenses.

The changes in fees doesn’t affect the city’s collection of its 2 percent business privilege tax, or sales tax.

"We were asked to come up with a revenue neutral way to update our business licensing procedures," said Ellen Hitchings, treasury administrator for the city. "Many businesses will actually save money."

To implement the changes, the licensing department required new software that adds another benefit to business owners.

"Once this is all in place, businesses will be able to pay their taxes online," Hitchings said. "It is very exciting because it will cut back a lot of paperwork on everyone’s part."

The city’s Small Business Commission has been working on the revamped licensing procedures since 2004. As part of the changes, the city will also ask businesses to answer an annual questionnaire to gather information that can be used for economic development purposes.