The Cudahy City Council has approved the refund of more than $85,000 in business license fees collected under a higher fee schedule, which was rescinded after businessmen protested.
The refunds, ranging from more than $17,000 to a low of $3, will go to 104 businesses.
Earlier, the council removed a ceiling of $2,000 per license and approved the increased fees. The increases were based on a business's yearly gross receipts.
The city started collecting the new fees in March but stopped in October when the businessmen mounted their protest. Business owners formed an organization, the Professional and Businessman's Assn. The group accused the council of violating Proposition 62, which required voters to approve new taxes or increases in general taxes.
"We believed it was a fee adjustment and not a tax. However, we went ahead and removed it," said Jack Joseph, assistant city manager.
The city of Westminster later challenged Proposition 62 and the state Court of Appeal ruled that it was unconstitutional.
Joseph said he expects the matter to be taken up later by the state Supreme Court. He said Cudahy would wait and see what happens at that level.
The refunds were to be mailed this week. The bulk of the money will go to large businesses, including Tianguis supermarket. The market will receive the largest refund of $17,150, followed by K Mart Discount Store with $16,975 and Day-Glo Color Corp. with $13,751. Many of the refunds range from $50 to $75.