A Billboard Insider reader writes:We have to renew our permit fees for our existing boards every 2 years. If we do not pay the fee every couple of years then the state will revoke our right to put ads on the boards. Is this not also a tax on billboards? This should be unconstitutional. I can understand the state charging a one-time fee to review and permit the site but….having to renew the permit every two years seems ridiculous!
Here’s what Billboard Insider knows.
- Most states charge an application fee when you apply for a new billboard permit and an annual or biannual fee for the renewal of the permit. The fees vary from $5 to $125 per billboard face. The fees are typically designed to cover regulatory and administrative costs of a state sign code.
- In addition to state fees, many local governments charge application fees and permit fees.
- Excess permit fees, which generate more money than the cost of administering regulation, are taxes disguised as fees and can raise legal issues for the administering authorities. Out of home companies in Houston, for example successfully recovered $2.5 million from the city by challenging excessive operating fees for off premise signs. See Rothfelder on how to challenge license fees.
- Out of home attorney Richard Rothfelder gives this takeaway on challenging permit fees: “If a city’s ordinances dramatically raise permit fees, a court may find that the permit fees constitute an impermissible occupation tax. However, exercise caution if you decide to protest the raises. Determining whether an exaction is a valid license fee or an unconstitutional occupation tax is a highly fact specific issue. If you seek to challenge a city’s permit fees, be sure to carefully record all costs and to thoroughly investigate the city’s policies. Hiring an accountant to review the city’s finances and management could be beneficial.”
Do you have a comment on permit fees? Email davewestburg@billboardinsider.com or use the comment box below and we’ll run a followup story.
To receive a free morning newsletter with each day’s Billboard insider articles email info@billboardinsider.com with the word “Subscribe” in the title. Our newsletter is free and we don’t sell our subscriber list.
Paid Advertisement
Business license fees are generally constitutional, unless they are applied differently to First Amendment businesses, such as billboards. Then, they are not constitutional. We had one such case many years ago. The City backed down from a discriminatory business license tax. As the other Richard (Rothfelder) said, the outcome of each case will depend on the specific facts.