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New Report: DC Must Cut Red Tape for Local Businesses to Pave the Path to Recovery

New bill addresses major problems identified in the report

WASHINGTON—Yesterday, Ward 2 Councilmember Brooke Pinto introduced the Business and Entrepreneurship Support to Thrive (BEST) Amendment Act of 2021, to streamline the licensing process for new and existing businesses. Today, a new report by the Institute for Justice (IJ) underscores the vital need to pass this reform—especially as so many recover from the personal and financial burdens of the pandemic.  

The report, Blueprint for Business: Cutting Red Tape and Supporting DC Entrepreneurs, reveals the cost, time and stress of getting a business up and running in DC. The report, which was based on a detailed analysis of DC’s code and regulations as well as conversations with dozens of business owners, calls on District officials to make it cheaper, faster and simpler to start and grow a business. It tells stories from local entrepreneurs impacted by DC’s regulatory labyrinth, analyzes best practices from other cities, and most importantly lays out a reform agenda for the city.  

Blueprint for Business recommends that government officials address three critical areas of reform:  

  • Streamline the licensing process by cutting the number of license categories in the DC Code and continue removing outdated forms and steps.  
  • Lower licensing, registration, and permitting fees to open opportunities for aspiring business owners of modest means. 
  • Improve communication and transparency between agencies and entrepreneurs and create a true one-stop shop for starting a business in the District.  

“This report provides a roadmap for reforms, and Councilmember Pinto’s new legislation can make those reforms a reality for Washingtonians trying to earn a living for themselves and for their families by doing what they love,” said study co-author Brooke Fallon, associate director of activism at the Institute for Justice.  

This legislation would address the issues outlined in IJ’s report and provide a clear and affordable path to business licensing by:  

  • Simplifying the licensing process by reducing the number of license categories from 100+ to 10 by combining categories with similar requirements. 
  • Lowering fees for new and small businesses by creating an exemption from fees for businesses with under $20,000 in annual revenue, lowering license fees to $99 for two years (or $49 for six months), and creating a progressive fee structure based on annual revenue for renewals.  
  • Creating a clear, consistent path to business licensing by removing outdated and duplicative requirements. 
  • Allowing DCRA flexibility to implement policies and procedures as necessary to serve DC’s business community. 
  • Streamlining the law by reorganizing the sections of the code covering basic business licensing to make it easier for DC residents trying to understand the rules. 

 “Our team spent the last three years combing through DC’s business regulations and licensing records, talking to entrepreneurs around the District, and meeting with government officials. We’re thrilled to see Mayor Bowser, the Department of Consumer Affairs (DCRA), and DC Council taking this issue so seriously and proposing reforms like the BEST Act and licensing fee reductions proposed in this year’s budget to simplify business licensing and lower fees. We hope this report can highlight the urgent need to pass these proposals,” said Fallon 

Blueprint for Business shows that Mayor Bowser and DC Council can continue to make progress together to scale back unnecessary paperwork and remove unfair burdens that trip up entrepreneurs. They can create a blueprint for DC to not just recover, but also to become a better place to work and do business than ever before. 

The report is authored by the Institute for Justice, a nonprofit law firm that works with entrepreneurs across the country to make it easier to earn an honest living. IJ helps small and local businesses fight back in the courts of law and public opinion against unfair regulatory barriers to starting a business.  

To download a one-pager on the report, click here. Reporters interested in learning more about the findings in the report are encouraged to contact IJ Communications Project Manager Conor Beck at cbeck@ij.org to set up an interview with an expert behind the report.

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