HomeMy WebLinkAboutRequest to Establish a tax exemption in the City of Huntingte .../� g oCITY OF BEAC
City Council SU CIT.Y'..
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1 Communication
To: Honorable Mayor and City Council Members
From: Don Hansen, City Council Member
Date: July 13, 2009
Subject: CITY COUNCIL ITEM FOR JULY 20, 2009, CITY COUNCIL
MEETING — BUSINESS LICENSE EXEMPTION FOR CERTAIN
SMALL BUSINESSES
STATEMENT OF ISSUE:
The city's current Business License Tax is a flat tax based on the number of employees.
There are approximately 21,000 current license holders with annual general fund tax
revenue of $2.2 million. There is currently no exclusion for small businesses. For
example, a single employee business with $500 in annual gross receipts pays a tax of
$75. This is the same tax that a single employee business with $20,000 in annual gross
receipts would pay. This proposal is to develop an annual gross receipts threshold by
which very small businesses would be eligible for an exemption from the business
license tax upon submission of proper documentation.
RECOMMENDED ACTION:
Establish a tax exemption in the City of Huntington Beach's business license ordinance
for businesses with annual gross receipts of $1,000 or less and establish updated code
language and procedures to implement such exemption. It is estimated that about 700
businesses would qualify for the exemption and that the estimated financial impact to
the general fund would be about $50,000 in reduced revenue annually.
xc: Fred Wilson, City Administrator
Paul Emery, Deputy City Administrator
Bob Hall, Deputy City Administrator
Bob Wingenroth, Director of Finance
Jennifer McGrath, City Attorney
Joan Flynn, City Clerk
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