Amazon, the online retail giant, sells truckloads of goods every day in Mountain View, yet the company apparently doesn't have a city business license. A fleet of Uber drivers chauffeur customers around Mountain View, yet that company also has no business license on file. Airbnb and Alphabet -- both worth billions of dollars -- evidently also operate without having paid the city's modest annual license fee.
That backdrop might help explain why a recent Mountain View push to get more unlicensed businesses into compliance ended up sparking a bit of a backlash. Some small businesses caught up in the sweep have criticized the city's contract auditors for claiming they need to abide by rules that go unnoticed by big corporations. Perhaps the best example of the city's scatter-shot enforcement: the company hired by Mountain View to perform a citywide business-license audit is itself lacking a local business license.
A Mountain View resident last week flagged some of the inconsistencies in the business-license enforcement after city contractors began pressuring her to get a license for her company that is based in Santa Clara. Jan Johnston-Tyler said that her refusal to pay is a matter of principle, and not about the $31 cost. She says city contractors were trying to claim she had to obtain a Mountain View business license because she occasionally telecommutes from home. She blasted the treatment as being like a "shakedown."
"This really pisses me off," Johnston-Tyler said. "They're telling me that if I send an email or answer my phone at home then I owe them a business tax -- that's insane!"
The dispute erupted last month when Johnston-Tyler was contacted by HdL Companies, a municipal-consulting firm based in Los Angeles County. HdL was hired by Mountain View last year to perform a business-license audit, tracking down unlicensed businesses and pressuring them to come into compliance. Under the deal, the city doesn't pay HdL directly for the work, but the firm is entitled to keep 35 percent of any new business fees they helped capture.
HdL first contacted Johnston-Tyler last month in a letter questionnaire asking about her Santa Clara counseling firm. Johnston-Tyler says she answered the questions honestly, explaining she worked sometimes from home but didn't see clients there or claim her home office as a tax deduction. Her firm was already paying about $300 each year in Santa Clara business taxes, she explained.
A few days later, an HdL representative called Johnston-Tyler up and said that since her home was being used for business, she was obligated to get a business license.
Johnston-Tyler complained to city officials, and the city attorney later responded by pointing her to a section of the city's municipal code, which states that anyone who conducts business within Mountain View must pay the city's fees. This code section clearly states this requirement should be applied to all businesses, regardless of whether they're located outside the city limits.
Needless to say, that information did little to assuage Johnston-Tyler's frustration. Countless employees telecommute throughout Silicon Valley, she points out, so why was she being singled out?
"How are they applying this equally to all of Mountain View?" she said. "If we take this to mean any company that telecommutes owes business tax ... then this pretty much applies to everyone."
In their application to Mountain View, HdL managers said their firm targets non-compliant businesses by comparing data sets for state business listings, sales tax allocations, property tax information and phone directories. Calls to HdL Companies seeking comment were not returned by the Voice's Wednesday press deadline.
The audit of the city's business license listings was launched last year although the idea has been under consideration for years among City Hall officials, said Finance Director Patty Kong. While Mountain View has thousands of listed businesses, not much revenue is generated from the license fees, which range from $31 up to $790, depending on the type and location of a business. In the 2014-15 fiscal year, license fees generated only about $258,000.
Given the small amount of money at stake, the city didn't make it much of a priority to go after unlicensed businesses, Kong said. But she emphasized that the city code states that anyone conducting "business activity" in Mountain View must have a license, Kong said.
"The obvious ones are when your business is in Mountain View, but there's other situations where you may need one with a separate business address," she said. "For example: a contractor who has a business in San Jose, but is doing business in Mountain View, or a consultant providing services in Mountain View -- that's a business activity."
What about an auditor hired to work in Mountain View? It would stand to reason that HdL would fall under these same requirements since the firm is clearly conducting business in Mountain View. Asked about this, city finance staff said they could find no record of HdL obtaining a business license.
Many tech firms with a sizable business presence in Mountain View are also conspicuously absent in the city's business-licenses database, including Amazon, Uber and Airbnb. It should be noted that Google has about 60 licenses on record for its various branch companies based in Mountain View, but its overarching firm, Alphabet, is not listed in the city records.
Are these tech giants also obliged to get a business license? That's something the city hasn't delved into yet, Kong said.
"You're raise a good question (since) they're doing commercial activity," she said. "That's why we hired HdL, we wanted them to discover who needs a business license."
So far, HdL has produced only "a handful" of new business licenses for Mountain View, Kong said. She could not specify exactly how many. That information would be in a upcoming status update, she said. As part of its contract with Mountain View, HdL agreed to provide a monthly report on its activity. But the company has not followed through on this, and these reports haven't been submitted, Kong said in an email.
In regard to Johnston-Tyler's case, city officials informed the Voice last week they were investigating her situation. On Friday, city officials notified her that her business shouldn't require a Mountain View license.
"Just the whole idea of making me get a business license was crazy," she said via email on Tuesday. "It's bureaucratic overreach."
Email Mark Noack at [email protected]