The city of Ashland could hold up business license applications and renewals on businesses that are breaking city rules or that have fallen behind on utility bills, hotel tax payments or meals tax payments.

The city of Ashland could hold up business license applications and renewals on businesses that are breaking city rules or that have fallen behind on utility bills, hotel tax payments or meals tax payments.

During a study session earlier this week, the Ashland City Council indicated its support for using business licenses as a tool to push for compliance and directed staff to develop a proposal.

The issue likely will come before the City Council for a vote in February, Ashland Finance and Administrative Services Director Lee Tuneberg said on Tuesday.

"If someone is not in compliance with other city requirements, the business license could be a tool for enforcing compliance," he said. "A business will have many chances to deal with the problem before we deny a business license."

Tuneberg said the city government would deny a license only if the business owner is not taking steps to cooperate.

"If you cut off the source, you have to consider that you may not get the money," he said. "We want to make sure that everyone is treated fairly."

Business license fees bring in about $200,000 annually, Tuneberg said.

Councilman Russ Silbiger said the city works hard to help businesses set up payment plans when they fall behind so that they don't have to close.

"We bend over backwards to not let that happen," he said.

The city can cut off utilities for non-payment of bills. It also can charge penalties and interest if businesses don't turn over revenue they collect from customers for the city's 5 percent sales tax on prepared meals and beverages and its 9 percent tax on hotel, motel and inn stays, Tuneberg said.

As a last resort, the city has taken businesses to court when they haven't made their sales tax payments, he said.

Each quarter, an average of about a dozen businesses are behind on hotel tax payments and a dozen are behind on the meals tax, Tuneberg said.

Businesses have more trouble making their payments in slow winter months. There has been a slight uptick in the number of companies falling behind since the economy soured, he said.

If a business falls behind but has a good payment history and works out a payment plan with the city, it can have penalties and interest waived, he said.

Silbiger, who is chairman of the city's Economic Development Policy Committee, said he doesn't think the proposed business license changes will feed into the perception that Ashland is a difficult place to do business.

"Medford is much harder on licensees than we're proposing to be," he said.

Medford has drawn fire for sometimes charging out-of-town companies license fees if they venture into the city on business. In 2007, an Ashland freelance photographer appealed Medford's demand that he pay a $60 license fee but was denied. The council later modified its rules to allow discretion to waive or reduce the fee for businesses outside the city.

Silbiger said using Ashland business licenses to keep companies in compliance with laws — such as fire codes and rules that contractors be licensed — will improve public safety and help protect consumers.

"It's making sure you're in compliance with things you should already be in compliance with," he said.

Silbiger said there are more than 2,000 business licenses in Ashland. That number includes home-based businesses.

Staff writer Vickie Aldous can be reached at 541-479-8199 or vlaldous@yahoo.com.