Questions about Building License Fee Changes?

February 19, 2026

In light of discussions at a recent budget meeting, we wanted to clear up some confusion and misconceptions on proposed business license fee changes. To be clear, the City of Rehoboth Beach is not trying to cover a budget shortfall; the FY2027 budget is balanced. Increasing business license fees has been a discussion since 2024 but was put on hold while the city worked towards adopting a schedule of fees and penalties so they could be looked at more holistically. Now that the schedule of fees and penalties has been approved, city officials felt it was the right time to restart these discussions around business license and other fees during this budget season.

Here is more background on the topic and more details about the proposed changes:

Please note these changes are proposed, not yet voted on.
Business license fees currently range from $35 – 1,500.
Proposed business license fees range from $45 – 750. Most license fees have a proposed increase of roughly 23% ($325 to $400 for example)
The proposed business license fees will be for the license only. Historically, a free seasonal transferable parking permit (valued at $325) would be provided at no cost to the business if they obtained a license for the year. In addition to the fee changes, the Board has proposed that businesses are no longer provided free parking permits to anyone obtaining a license, however, they have the option to purchase a parking permit at a discounted rate. City staff has proposed $260, a discount of 20%.
In 2024 the Building and Licensing Department gave out 1,480 free permits to business license holders. In 2025, they gave out 1,454.
Business License fees make up roughly 1.9% of General Fund Budgeted Revenue and roughly 1.1% of Total Budgeted Revenue.
Any increase to business license fees would not take effect until January 2027. Business license renewals take place in January of each year.
We’re not only looking at business license fees, but also building permit fees, building code fees, water and sewer service fees, convention center rates, traffic penalties and other penalties for code violations.