Discussion of a
Small Business Tax
Credit Program
City Council
April 12, 2022
COMMUNITY
DEVELOPMENT
What is a Business Tax Credit?
• A Tax Credit is a government awarded credit
provided to businesses that engage in certain
types of activities that are helpful to the
economy.
• Tax credits are generally for businesses with
certain defined parameters. For example, tax
credits could be awarded to ‘entertainment
businesses’ or ‘small business’ that are within
the City and employ under 100 people.
Burbank Business Tax
• A majority of Burbank businesses pay taxes annually based on a flat rate plus a levy on the number of employees a business maintains.
• For example, in 2022 a typical business with 10 employees will pay $218.35, and a business with 100 employees will pay $1,167.85. • Other cities (like Los Angeles) typically collect business taxes based on the company’s gross sales receipts.
• Burbank DOES NOT have Gross Sales Receipts Tax.
• Burbank DOES NOT charge City Income Tax.
City COVID-19 Relief Programs
Department Program
CDD Rental Assistance Program
CDD Small Business Assistance Loan Program
BWP Lifeline
BWP Life Support
BWP Project Share
BWP Refrigerator Exchange
BWP COVID-19 Job Loss Bill Credit
BWP LIHEAP
Parks/Rec Burbank Program Activity and Service Subsidy (PASS) Parks/Rec Supplemental Nutrition Program
Small Business Tax Credit Programs
City Program
Los Angeles, CA Small Business Tax Exemption
San Jose, CA Temporary Financial Hardship
Exemption
Tacoma, WA Business Tax Credit
Tacoma, WA Small Business Phased Tax
Credit
SB 113
• Governor Newson signed SB 113 on February 9,
2022 providing $6.1 billion in tax relief, tax credits
and direct grants to the hardest hit business
industries.
• $500 million tax cuts to restaurants and venues
• $5.5 billion in tax credits and deductions for
California businesses;
• Investing $150 million in COVID-19 relief grants
for small businesses
Small Business Tax Credit
Potential Impacts to City
• Loss of General Fund Revenue
• Reduction in City programs and services
• Marketing and Business Education Costs
• Program Administration Costs
• Addition of 1-2 Full Time Staff
Recommendation
Staff does not recommend a Small Business Tax Credit
Program in the City of Burbank:
• Burbank is already competitive in its tax structure
• State is offering a tax credit program via SB 113
• Very few other cities offer a tax credit program
• Loss of revenue to the City and cost incurred to
administer and staff the program would impact
the General Fund