(The Center Square) – Business license approvals are down in Illinois’ biggest city, where the cost of doing business remains high.
Illinois Policy Institute assistant editor Dylan Sharkey said Chicago had about 29,400 new and renewed business licenses approved from October 2023 to October 2024.
“When you walk down the business district of Chicago, you’ll see a lot of empty storefronts, but that’s anecdotal. We now have numbers to show how many storefronts are empty and why,” Sharkey told The Center Square. “When we were pre-pandemic, we were consistently above 30,000, even as high as 35,000, so that’s roughly 5,000 business applications that you would be seeing every year that are just gone.”
The city approved approximately 30,900 business licenses over the same period last year and about 36,200 over the same period from 2014-2015.
Sharkey said application fees for Chicago businesses range from $250 to $6,600.
“For just upfront costs for a new business starting out, it doesn’t seem like too much, but for those businesses trying to renew, it’s just an added cost every year on top of your normal business expenses,” Sharkey said.
Businesses in Chicago pay the second-highest state corporate income tax rates in the nation and the second-highest commercial property taxes in the U.S.
Sharkey said Chicago’s business climate would have suffered even more if voters had passed the Bring Chicago Home real-estate transfer tax earlier this year.
“It would have been even worse for businesses trying to get their start, because that was on financial transactions for million-dollar properties. Well, a lot of people know, a million-dollar property in Chicago does not mean that you are working out of or living at a mansion,” Sharkey said.
He said a lot of these businesses are not that big, but surpass the million-dollar threshold easily.
“In fact, one of the famous ones, Pequod’s Pizza, was about a million dollars, and I don’t think anyone walking past there would think of that as a sleek, high-end, mansion-esque property,” Sharkey said.
Voters rejected the Bring Chicago Home tax hike in a March referendum. The measure was supported by Mayor Brandon Johnson and the Chicago Teachers Union.
The Illinois Policy Institute estimated that application fees for business licenses generated $21.2 million for the city during the 12-month period.