August 25, 2026 Abigail Nguyen and Sam McLain
Articles 1 and 2 of the Chicago Small Business Bill of Rights seek to lower fines and licensing costs. Small businesses run on tight budgets, so harsh fines can punish well-meaning business owners for a few honest mistakes. Raising routine licensing fees also discourages market competition through new business owners. Chicago stands out among peer cities for its high fines and licensing costs.
Two fines exemplify Chicago’s excessive penalties
Trash Fines:
Chicago fines businesses between $200 and $500 per day for overfilled garbage bins. In contrast, New York City charges only $50 for the first offense, $100 for the second, and $200 after that. NYC’s progressive fine structure is fairer than Chicago’s practice of charging up to $500 for a first-time violation. Meanwhile, Los Angeles charges a relatively low $40 flat fee per collection, excluding excessive violations.
Price Display Fines:
Under Chicago’s standard pricing system, businesses face fines between $50 and $500 for unlisted prices. For non-packaged goods, the daily fee applies for each display. For pre-packaged goods, the daily fee applies per item. NYC also issues fines for missing prices but is far more lenient. Inspectors only issue fines when stores omit prices on at least five identical products. Upon initial inspection, the first 20 violations are $25 each, and additional violations are $50. Finally, first-time pricing violations have a 30-day cure period, so NYC will waive fines for businesses that fix their price displays. Meanwhile, Los Angeles has no equivalent price display fine for general retail businesses.
Licenses
On January 1 of this year, Chicago doubled the cost of a limited business license and quadrupled the cost of a regulated business license. These increases will raise less than $7 million each year for the city, a tiny fraction of the $16.6 billion budget. Other cities’ licensing costs show Chicago is an outlier.
Limited Business License:
The default Chicago business license is a “limited business license,” or LBL, which now costs $500 every two years. One example of an LBL is a retail clothing store. Chicago’s peer cities like Los Angeles, New York City, Philadelphia, and Houston either do not charge for a general retail license or do not require one.
Regulated Business License:
Chicago’s “regulated business license,” or RBL, covers businesses that the City believes require stricter safety rules. A general home repair service, for example, requires an RBL, which now costs $1,000 every two years. Depending on whether the home repairer is a sole proprietor, Los Angeles charges $200-300 for initial fees and $450-700 for two-year renewal. Costs are $125 every two years in New York City, $100 every two years in Philadelphia, and $0 in Houston, which does not require a license for this type of business.
The Need for Change
It is much more affordable for an entrepreneur to open a small business in one of Chicago’s peer cities. And when that business owner makes a mistake in other cities, the penalties they face are easier for them to weather. Chicago should not leave its small businesses behind. Article 1 of the Chicago Small Business Bill of Rights will ask Chicago to avoid imposing excessive fines for mistakes. Article 2 asks the city not to burden small business owners with excessive license fees. Until Chicago passes the Small Business Bill of Rights, current costs will continue to put the livelihoods of small business owners and their employees at risk.