REPORT TO COUNCIL
SUBJECT
Title
Action on Amendment No. 1 to the Agreement with Hinderliter, De Llamas & Associates DBA HdL Companies for Business License Tax Process Improvements, Software, Transition Support and Audit Services
Report
COUNCIL PILLAR
Deliver and Enhance High Quality Efficient Services and Infrastructure
BACKGROUND
In November 2022, residents approved the passage of Measure H, a "City of Santa Clara Business License Update / Tax Equity Measure." Several elements of the updated business license tax include, but are not limited to, the following:
* Rolling invoicing/billing throughout the year
* Cap of $500 increased to $350,000 per business
* Flat $45 per employee tax rate
* Annual CPI adjustment
* One license for each business entity (certificates required for each location)
* Out of area business registration pro-rated based on estimated workdays in the year
* Flat landlord tax per rental unit
* Various exemptions
* Home-based businesses
* Penalties for non-payment
* Simplification of tax rates by removing tiers based on business industry size and type.
In response to the passage of Measure H, staff completed a competitive Request for Proposals process (RFP) to select a qualified firm to assist with the development and implementation of a new business tax system. Five proposals were received, and Hinderliter, De Llamas & Associates DBA HdL Companies (HdL) was awarded the agreement having submitted the best value proposal as determined by the evaluation panel.
In July 2023, the City worked with HdL and went live with changes to the business tax system based on the elements of the updated Business Tax Ordinance (Ordinance). This change required businesses to update license information to include accurate employee-based headcount. HdL supported this transition by redirecting all inquiries conducted by phone and online for business license tax renewals. New renewals continued to be serviced by the City's Finance Department. In addition, acc...
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