REPORT TO COUNCIL
SUBJECT
Title
Presentation on Business Tax Ballot Measure and Other Potential Revenue Measures for November 2022 Ballot (Deferred from October 19, 2021)
Report
COUNCIL PILLAR
Enhance Community Engagement and Transparency
BACKGROUND
At the 2021 Council Priority Setting Session, information was requested by Council on a potential business tax ballot measure which would update the City's current business tax structure. As part of the May 25, 2021 Budget Study Session and at the June 22, 2021 City Council meeting, Staff presented information and a timeline to pursue a measure that could be placed on the November 2022 General Election ballot. At the June 22nd Council meeting, Council directed staff to 1) begin work on a potential November 2022 ballot measure, including exploring other potential revenue measures, and 2) agendize a study session for Fall 2021. This direction was affirmed at the August Council Priority Setting check-in meeting.
Currently, all businesses operating within Santa Clara (including those businesses operating but located outside of the City), must have a license to transact business or occupy space in the city. The City's business tax program was last updated in 1992. The business tax program does not allow for a cost escalator and therefore has not changed in almost 30 years. The City's current charge for business tax ranges from $15 to $500 per company and as a result receives annual revenue of approximately $0.9 million.
DISCUSSION
In preparation for a potential November 2022 ballot measure, City staff has started a procurement for Busines Tax and Ballot Measure Consulting Services by releasing a Request for Statement of Qualifications in September 2021. Staff anticipates completing the procurement process shortly with a contract award expected later this month. The services to be provided include 1) a comprehensive study on the current business tax structure and recommending alternative tax structures/methods i...
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