The reason this is a fallacy is because the term "business logic" is way too nebulous to nail down correctly, and because business logic tends to stretch out across client-, middle- and server- tiers, as well as across the presentation and data access/storage layers.The 11th Fallacy of Enterprise Computing
This is a hard one to swallow, I'll grant. Consider, for a moment, a simple business rule: a given person's name can be no longer than 40 characters. It's a fairly simple rule, and as such should have a fairly simple answer to the question: Where do we enforce this particular rule? Obviously we have a database schema behind the scenes where the data will be stored, and while we could use tables with every column set to be variable-length strings of up to 2000 characters or so (to allow for maximum flexibility in our storage), most developers choose not to. They'll cite a whole number of different reasons, but the most obvious one is also the most important--by using relational database constraints, the database can act as an automatic enforcer of business rules, such as the one that requires that names be no longer than 40 characters. Any violation of that rule will result in an error from the database.
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Craig McClanahan responds to the 11th Fallacy