As red tape intensifies, small businesses push back

Regulation and government red tape have long plagued Main Street. Regulations historically have ranked as among the top three issues for small businesses, according to the National Federation of Independent Business, the D.C.-based lobbying group.

But in recent years, red tape faced by small businesses in various states has intensified, according to the Institute for Justice, a nonprofit public interest law firm that fights to limit the size of government. That’s why they are taking on small business regulations like Wisconsin’s “cookie ban,” as well as a seemingly labyrinth of licensing laws for a variety of occupations.

Examples include a written test for tour guides that can test knowledge of celebrities like Darius Rucker from Hootie and the Blowfish. Another law requires more than 2,000 hours of costly training as a condition of a cosmetology license.

“In the 1950s about 5 percent of the workforce needed a license to work, and they were doctors, lawyers — the people you would expect. Today, that number is over 20 percent — they’re florists, interior designers and hair braiders,” said Robert McNamara, senior attorney at the Institute for Justice. “We are in the midst of an explosion of occupational licensing laws in this country.”

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The Washington-based institute filed a lawsuit challenging portions of Wisconsin’s food regulation in January 2016 in state court. The suit is against the Wisconsin Department of Agriculture Trade and Consumer Protection.

A spokeswoman for the Wisconsin Department of Justice told CNBC by email that it is representing the agency and is reviewing the complaint.

While parts of Wisconsin’s food regulations were updated in 2010, the change did not cover home-baked goods.

And to unpack the maze of food laws further, Kivirist can produce and sell cider, maple syrup and other nonbaked goods without a commercial kitchen because those specific items are exempt. That’s why she sells canned items including pickles and sauerkraut locally without violating regulations.

The Wisconsin Bakers Association, a trade group, supports the regulation. “We welcome anyone that wants to get into the business on a level playing field,” said executive director Dave Schmidt.