HomeMy WebLinkAbout2018.05.03 Staff Report 5.2 Potential Restructuring Business License Tax Draft
Item 5.2 Potential Restructuring of the Business License Tax
MEMORANDUM
City ManagerÔs Office
May 3, 2018
DATE:
Council Ad-Hoc Subcommittee on Revenue Measures
TO:
Daniel H. Rich, City Manager
FROM:
Sheila Tucker, Project Manager
SUBJECT:Potential Restructuring of the Business License Tax
RECOMMENDATION
Receive an update on potential revenue projection models and provide direction to staff
on next steps on an employer tax.
BACKGROUND
The City Council received an update on April 17, 2018 on the evaluation of three
possible measures for the 2018 ballot: 1) taxation of cannabis, 2) an increase in the
Transient Occupancy Tax (TOT); and 3) an employer tax (business license), including
the results of the public opinion polling. The Council directed staff to continue to
explore the business license (BL) Tax with a revenue target of up to $10 million. Staff
has continued to refine the data and the financial models.
ANALYSIS
Further research indicates that the BL tax rate has not essentially changed since 1954.
The update in 1985 was for some minor changes to the business types; the fees did not
change. The $30 base fee would now be approximately 9.16 times greater or $275 in
todayÔs dollars, with inflation (using CPI changes from 1954 to
Since the City Council action on April 17, 2018, staff has further refined the number of
employers located in Mountain View. With recent updates and completed renewals,
there are over 5,500 active Mountain View BL, up from approximat
of January 31, 2018. Staff is refining the new financial models
additional businesses, and to remove non-profits.
Staff will present new potential BL tax structure models at the meeting and seek
direction from the Subcommittee on next steps, as finalizing an approach the end of the
month is necessary to stay on track for Council action.