Who told you that you owed a business tax? The IRS, or a city entity? Many cities call the license fee and business tax, so is this what you are asking about?

Also, keep in mind, that you owe not only federal, state and possibly local taxes on the money from the freelance projects, but also both the employer and employee side of SS and FICA taxes. Since you will be treated as self employed with respect to the freelance work. (Check for any special rules with regard to the SS and FICA if your total income for all sources is large enough to require special handling.)