SALEM — A bill approved by the House Committee on Business and Labor Wednesday may signal the beginning of the end of Medford's practice of collecting business license fees from out-of-town businesses that work inside city limits.

House Bill 2541 would exempt real-estate sales agents from paying business license fees in communities where they do not have a physical office. Medford has been aggressively charging an annual business license fee of $81 to many businesses and individuals that have their physical office in some other community.

HB 2541 specifically exempts only real-estate sales agents from additional business license fees beyond their home town, but Rep. Sal Esquivel, R-Medford, says he will seek to extend the exclusion to other state-licensed practitionersas well.

Esquivel sells real estate, but he has an office in Medford and pays the local business tax in addition to his annual state licensing fee.

"I don't have a dog in that fight," Esquivel said.

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Medford has charged its business license fee to a number of people who do business in the city but don't work there. As the city construes its business license ordinance, it applies to people selling cosmetics door-to-door, freelance writers and photographers, and out-of-town attorneys visiting their clients.

City staff members track down possible violators through telephone book advertisements, the Internet, newspaper classified ads and other print media.

The measure was strongly supported by a spokesman for the Oregon Association of Realtors, Harlan Levy. He said there are 36 counties in Oregon and more than 200 cities, and "if every city and county were to assess its own business license tax, statewide professional real estate activity would become impossible."

He said a licensee pays the state $230 every two years to operate, along with fees for continuing education, a prelicensing background check and charges levied by the Secretary of State for business entity registration and renewal.

Although he didn't testify at the hearing, Donald L. Rist of Ashland submitted a statement saying real estate agents are "easy targets" because they put ads in local papers and put up for-sale signs.

"Why should I have to pay a fee when an electrician or plumber from outside the city can come in and make a repair, and isn't even noticed," Rist wrote.

Cindy Robert, lobbyist for Medford, attended the hearing but did not testify for or against the bill. She said after the hearing that Medford issues 6,700 business licenses annually, including about 1,900 to non-Medford residents, and takes in about $550,000 annually in business license fees.

Robert said the City Council has been mulling some kind of compromise on the issue. "We need a more equitable way to assess those who want to do business here," she said.

She said Medford doesn't want to drive away nonresident businesses and individuals because their work can generate other revenue for the city, such as title fees and other fees generated by property sales.

Don Jepsen is a freelance writer living in Salem. Reach him at jepsen34@open.org.