Business fees in Dewey Beach are being challenged in a class action lawsuit brought by Alex Pires who manages six businesses in the town.
He complains that the city is treating its business license fee like a tax audit charging far above what other nearby towns charge.
He notes that Rehoboth Beach and Bethany Beach charge around $360 while his six businesses averaged almost $5-thousand.
And, one of his establishments, The Rusty Rudder, pays more than $10,000
But the town says that the business license fees account for 12 percent of the resort’s income adding that if Pire’s wins his lawsuit it could cripple that funding source.
Dewey Beach officials say that the town’s charter gives the resort broad taxation powers, prohibiting only three types of taxes, for beach-access, personal property and long-term apartment and condominium rentals.
