Is a License Fee a Tax ? A license fee is distinguishable from a tax which is a revenue producing measure characterized by the production of a high proportion of income relative to the costs of collection and supervision. Greenacres Apartments, Inc. v. Bristol Township, 85 Pa.Commonwealth Ct. 572, 482 A.2d 1356 (1984). Thus, if a license fee collects more than an amount commensurate with the expense of administering the license, it would become a tax revenue and cease to be a valid license fee. See Stark v. Commonwealth, 90 Pa.Commonwealth Ct. 80, 494 A.2d 44 (1985). In Commonwealth v. Talley, 123 Pa. Commw. 313, 553 A.2d 518, 519-20 (Pa. Cmwlth. 1989), this Court summarized the applicable law regarding the constitutionality of licensing fees, when the Court wrote: Appellant's argument before this Court as well as the trial court is that the ordinance is invalid because the amount of the license fee is not based upon the cost to the municipality for services provided to those made subject to the ordinance; and therefore, the license fee does nothing more than raise revenue for general governmental purposes. A license fee has been defined by our Supreme Court in Mastrangelo v. Buckley, 433 Pa. 352, 385-86, 250 A.2d 447, 464 (1969): A license fee is a sum assessed for the granting of a privilege. In most instances, where a license is granted the City invariably incurs expense such as the cost of registration and inspection; it is only proper that the one who seeks and receives a license should bear this expense. To defray the cost of a license a fee is charged to the licensee; however, this fee must be commensurate with the expense incurred by the City in connection with the issuance and supervision of the license or privilege. The party challenging a license fee has the burden of proving that the fee is unreasonable. Hill v. Borough of Dormont, 90 Pa.Commonwealth Ct. 10, 494 A.2d 15 (1985); Stark. All doubt must be resolved in favor of the reasonableness of the fee, since the municipality must be given reasonable latitude in anticipating the expense of enforcing the ordinance. Hill; Stark.