City of Brentwood
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City Administration

ELECTION 2002
November 5, 2002

MEASURE D

Shall the City of Brentwood amend the Business License Tax and Regulations, as set forth in Ordinance No. 707?

HISTORY

  • On February 24, 1948, the City Council passed Ordinance No. 2 which provided for the licensing of businesses within the City limits.
  • Since 1948, the only increase to business license fees was a 20% surtax added in 1975, which has been used exclusively to subsidize the Brentwood Chamber of Commerce.
  • If the City's business tax rate had been adjusted annually for inflation since 1948, the rate today would be $485 per year.

WHY CHANGE

Why should the City of Brentwood change its business license tax structure? Because all Cities have a fiduciary responsibility to their citizens to identify revenue sources that are insufficient and adjust them to be reasonable and comparable to other Cities.

CURRENT & PROPOSED
Currently, the business license tax is based on number of owners/employees, number of units, or a flat rate (contractors). Rates range from $21.60 to $72.00 max. per year (rates include 20% surtax for Chamber of Commerce).
The proposed business license taxes would be based on gross annual receipts, as follows:

Gross Rec. Tax Rate
</=$333,333 $100
$333,334–500,000 $0.30 per $1,000
$500,001–1,000,000 $150 + $0.25 per $1,000 over $500,000
>/=$1,000,001 $275 + $0.15 per $1,000 over $1,000,000

Chart 1: COMPARISONS
The following chart shows actual business license tax revenue collected by Brentwood and three surrounding cities in 2001

Chart 2: EXISTING BUSINESSES – RAMP UP
Existing businesses (licenses issued prior to June 1, 2002) shall pay only forty percent (40%) of the tax rate for the first year that this ordinance is in effect and only seventy percent (70%) of the tax rate for the second year that this ordinance is in effect.

Chart 3: PROPOSED RATES
This chart shows proposed business license tax rates for a range of gross receipts and what tax businesses with these same gross receipts would pay in three neighboring cities. These business tax rates are for all gross receipt amounts between $50,000 and $5,000,000.

CHAMBER OF COMMERCE
SURTAX PROPOSAL
Currently, 20% of the business license tax is earmarked for the Chamber of Commerce, with the City Council having no authorization over how the money is spent. With this projected increase in revenue, the City proposes that while these funds should continue to be used for economic development, the City Council should distribute these funds annually for the explicit purpose of business promotion and institutional advertisement for the City of Brentwood.