Lilly of the Valley owner Narelle Wilson said a council ranger visited her business recently and told her a small flag hanging outside the shop had been the subject of a complaint and must be removed or she could be fined.

"That is the most pathetic thing I've ever heard yet," Ms Wilson said.

"I cannot see how that's affecting anybody."

She said she had never received a complaint before in the five years the flag had been up, and she was not notified by the council before being approached by the ranger just days before Valentine's Day.

Ms Wilson said she was told she could purchase an A-frame sign to place outside her shop instead, which she believed was a far greater public obstruction than her flag.

"A sandwich board sitting out there is a nuisance," she said.

She said purchasing a new sign and paying council fees for it would cost her about $500 to $1000.

"We struggle to make ends meet as it is now," she said.

OTHER STORIES:

Ms Wilson said she was determined to keep the flag flying.

"I'm not taking it down because it's not hurting anybody," she said.

"I work hard ... I'm happy down here and I do a service to the community."

Wagga council environment and city compliance manager Mark Gardiner said all items "on or over" a footpath required council approval, which Ms Wilson's flag did not have.

Mr Gardiner said council staff were routinely monitoring street activities on an ongoing basis.

Ms Wilson said council rules and regulations were driving small business owners away from the main street.

"There are 30 shops in the main street that are empty and that's absolutely disgusting," she said.