City of Emeryville
Business License Tax
Business Tax Study
Presented By
The Basis of the Tax
Five Key Components of A Business License Tax1. The taxable activity. In the City of Emeryville, the taxable activity is “…all activities engaged in or caused to be engaged in within this City with the object of gain, benefit or advantage, whether direct or indirect, to the taxpayer or to another or to others…”
2. The measure of the taxable activity. Once we know what is taxed, we must measure how much of that taxable activity is occurring. Some cities may measure the number of employees. A more modern trend is to measure the gross receipts. Emeryville measures the gross receipts in most categories (some categories are not calculated on gross receipts)
3. The rate. Given a certain amount of taxable activity, a rate is applied to determine how much tax is owed.
4. The classification. Cities will often group certain kinds of businesses together and apply different tax rates to each group. For example, a city might want to charge restaurants a lower rate than commercial rentals.
5. The results. Since we are concerned with the revenue-generating aspect of the business license, when we refer to the “results” of the tax, we mean the revenue generated for the City.
Where is the City now?
Where is the City now?
FPO
$7,441,889 $7,248,023
$6,777,830 $6,519,337
$0
$1,000,000$2,000,000$3,000,000$4,000,000$5,000,000$6,000,000$7,000,000$8,000,000$9,000,000 $10,000,000
FY2022-23 FY2023-24 FY2024-25 FY2025-26 (YTD)
City of Emeryville Business Tax Revenue*
(Excluding Cannabis Revenues)
*Because the City reports business tax with cannabis tax in public reports, revenues here reflect business license revenues during the past 4 years that HdL has managed the City’s business license tax program.
Where is the City now?
2,199 2,190 2,190 2,101
861 956 1,001 1,030
0 500
1,0001,5002,0002,5003,0003,500
FY2022-23 FY2023-24 FY2024-25 FY2025-26 (YTD)
City of Emeryville Business Counts*
Inside Businesses Outside Businesses
*Data is limited to what is available in the HdL Database Important notes about the City’s current tax structure:
• Most businesses are taxed at a $1 per $1,000 in gross receipts• There are currently 56 business classifications• In addition to the tax, businesses pay a processin In addition to the tax, businesses pay a processing fee, state fee, and any other applicable fees. fee, state fee, and any other applicable fees.
These fees are not considered in this study, and any changes would result from a cost recovery These fees are not considered in this study, and any chfee analysis, which is outside the scope of this study.
Where is the City now?
Rate Type Count of Business Primary Tax Type
EM: Gross Receipts 1,025 Gross Receipts $1/$1,000
EM: GR Tax Residential Landlords 872 Gross Receipts $1/$1,000 EM: Annual Contractors 658 Greater of GR $1/$1,000 or Flat Rate EM: Rental of Commercial Property 188 Gross Receipts $3.50/$1,000 EM: Professional and Semi-pro 177 Gross Receipts $1/$1,000 EM: Exemption for Nonprofit Corp 67 Exempt from BLT
EM: Certain Businesses Not Having Gross Receipts 60 Gross Payroll $1/$1,000 OAK - Class A Retail 1 Tiered Gross Receipts (Set by Oakland; Progressive Range $0.90 - $2.50 per $1k) OAK - Class O Rentals 1
Tiered Gross Receipts (Set by Oakland;
$1.395 per $1k Gross Receipts,
Min: $13.95)
All Other Rate Types (16) 141 Varies from Flat Rates to Gross Receipts Totals 3,190
*33 rates enumerated in the tax code are not used by active businesses; 95% of businesses are represented in the top 7 categories Where is the City now?
PROPERTY RENTAL -
COMMERCIAL
18%
RESEARCH AND
DEVELOPMENT
12%
HEALTHCARE
8%
MANUFACTURING
7%
MOVIE/TV PRODUCTION
7%
CONTRACTOR - GENERAL
7%
RETAIL SALES - GENERAL
5%
CONSULTANT
4%
HARDWARE STORE
4%
SERVICE - GENERAL
3%
ALL OTHER TYPES (121)
25%
Total Share of Tax Revenue Generated by Business Type
Where is the City now?
Top 100
71.40%
All Other
Businesses
28.60%
Top 100 - Percent of
Total Taxes Charged
Top 100
74.46%
All Other
Businesses
25.54%
Top 100 - Percent of
Total Reported Gross Receipts
The top 100 businesses account for 75% of the City's business activity and 73% of the total tax collected.
Jurisdiction Comparison:
Basic Overview
Jurisdiction Comparison
Demographic and Economic Statistics by Location
Location Population Business Count Business Tax Revenue Revenue Per Capita Revenue Per Business Ordinance Last Modified Tax Basis Cap/Maximum? Emeryville 12,732 3,100 $10,076,975* $791 $3,251 1984 Gross Receipts Y Alameda 73,353 5,500 $2,495,924 $33 $454 1990 Gross Receipts N Berkeley 118,962 11,700 $29,343,969 $247 $2,508 2018 Gross Receipts N Oakland 436,504 30,100 $115,376,772 $264 $3,833 2022 Gross Receipts N Pleasanton 74,653 9,500 $5,853,515 $78 $616 2017 Gross Receipts N Redwood City 80,996 16,700 $3,205,868 $40 $192 2024 Per Employee Y San Leandro 85,784 8,400 $7,824,136 $91 $931 1995 Per Employee N South San
Francisco 63,123 6,500 $3,831,306 $61 $589 2024 Per Employee N Union City 65,414 5,500 $1,898,579 $29 $345 2024 Gross Receipts N Walnut Creek 69,152 7,900 $3,680,457 $53 $466 2010 Gross Receipts N * Revenue is based on state reported revenue and contains general business license and cannabis revenue.
Business License Revenue Comparison
5-Year Revenue Trend
$0$2$4$6$8
$10$12
2019 2020 2021 2022 2023
Millions
Emeryville*
$0.0$1.0$2.0$3.0$4.0
2019 2020 2021 2022 2023
Alameda
$0
$40$80
$120$160
2019 2020 2021 2022 2023
Oakland
$0
$10$20$30$40
2019 2020 2021 2022 2023
Berkeley
$0.0$2.0$4.0$6.0$8.0
2019 2020 2021 2022 2023
Pleasanton
$0.0$1.0$2.0$3.0$4.0
2019 2020 2021 2022 2023
Redwood City
$0.0$3.0$6.0$9.0
$12.0
2019 2020 2021 2022 2023
San Leandro
$0.0$1.0$2.0$3.0$4.0
2019 2020 2021 2022 2023
Union City
$0.0$1.5$3.0$4.5$6.0
2019 2020 2021 2022 2023
Walnut Creek
$0.0$1.5$3.0$4.5$6.0
2019 2020 2021 2022 2023
South San Francisco
*Revenue is based on state reported revenue and contains general business license and cannabis revenue.
Jurisdiction Comparison:
Detailed Analysis
Jurisdictions for
Detailed Analysis
• Emeryville• Berkeley• South San Francisco• Walnut Creek Rate Calculations
Business Class \ Jurisdiction Emeryville Berkeley South San Francisco Walnut Creek Contractors
Greater of $200 per Year
or $1/$1,000
of gross receipts
Maximum: $450,997.99
$1.80 per thousand
of gross receipts
Minimum $77
$1.80 per thousand
of Construction Value on Permit $656 Flat Rate
General Business / Retail
$1 per thousand
of gross receipts
Minimum $25
Maximum: $450,997.99
$1.20 per thousand
of gross receipts
Minimum $77
$150 + Per Employee Rate
+ $30 per employee < 9
+ $45 per employee < 99+ $55 per employee > 99
Businesses in these categories
have two (2) options:
Flat Rate based on tiered gross
receipts ranges from: $23
to $2,019 + $0.02 per thousand of
gross receipts in excess of $10
million.
or
Employee Rate:
+ $33 per employee <= 300
+ $16 per employee > 300
Professionals
$1 per thousand
of gross receipts
Minimum $25
Maximum: $450,997.99
$3.60 per thousand
of gross receipts
Minimum $77
$275
+ $275 per additional partner or
associate
Rental – Commercial
$3.50 per thousand
of gross receipts
Minimum $25
Maximum: $450,997.99
(1 – 4 Units) + $10.81 or
(5 or more) + 28.80
per thousand of gross receipts
Minimum $77
$150 + Per Employee Rate
+ $30 per employee < 9
+ $45 per employee < 99+ $55 per employee > 99
Rental – Residential
$1 per thousand
of gross receipts
Minimum $25
Maximum: $450,997.99
(1 – 4 Units) + $10.81 or
(5 or more) + 28.80
per thousand of gross receipts
Minimum $77
$50 per unit (Long-Term Rentals)
Services
$1 per thousand
of gross receipts
Minimum $25
Maximum: $450,997.99
$2.40 per thousand
of gross receipts
Minimum $77
$150 + GB Per Employee Rate
+ $30 per employee < 9
+ $45 per employee < 99+ $55 per employee > 99
Hypothetical Business Business Type Gross Receipts Employees Emeryville Berkeley South San Francisco Walnut Creek Consulting Firm Professional services (management consulting) $1,800,000 12 Professional Business: Gross Receipts x 0.1% Minimum $25 Professional Business: Gross Receipts x 0.36% Minimum $51 Professional: $275 + $275 per additional partner or associate General: $414 + (GR over $1M*0.026%) Supermarket Grocer (retail) $9,500,000 80
General Business:
Gross Receipts x 0.1%
Minimum $25
Grocer:
Gross Receipts x 0.06%
Minimum $51
General Business:
$150
+ $30 per employee < 9
+ $45 per employee < 99
General:
$1,674 +
(GR over $7M*0.0115%)
Biotech/R&D Business Research and Development $250,000,000 100 General Business: Gross Receipts x 0.1% Minimum $25 Professional Business: Gross Receipts x 0.36% Minimum $51 General Business: $150 + $30 per employee < 9 + $45 per employee < 99 General: $2,019 + (GR over $10M*0.002%) Sit-down Restaurant Restaurant (food service) $2,200,000 28 General Business: Gross Receipts
x 0.1%
Minimum $25
Miscellaneous Business:
Gross Receipts x 0.24%
Minimum $51
General Business:
$150
+ $30 per employee < 9
+ $45 per employee < 99
General:
$674 +
(GR over $2M*0.0245%)
Commercial Landlord Rental of commercial real property $1,200,000 2 Commercial Property Rental: Gross Receipts x 0.35% Rental of Real Property: Gross Receipts x 1.081% Minimum $77 per building No Taxation for Commercial Rental General: $414 + (GR over $1M*0.026%) General Contractor Construction contractor $5,000,000 30 Contractor:
Greater of $200 or Gross
Receipts x 0.1%
Construction Contractor:
Gross Receipts x 0.18%
Minimum $51
Contractor:
Work Valuation x 0.18%
General Contractor:
$656 per Year
Retail Boutique Retail trade (clothing boutique) $400,000 6 General Business: Gross Receipts x 0.1% Minimum $25 Retail Trade: Gross Receipts x 0.12% Minimum $51 General Business: $150 + $30 per employee General: $293.25 per Year Business Scenarios – Tax Structure
Business Scenarios – Estimated Revenue
Hypothetical
Business
Business
Gross Receipts
Business
Employee Count Emeryville Berkeley South San Francisco Walnut Creek Consulting Firm $1,800,000 12 $1,800 $6,480 $3,300 $622 Supermarket $9,500,000 80 $9,500 $5,700 $3,615 $1,962
Biotech/R&D
Business $250,000,000 100 $250,000 $900,000 $4,515 $6,814 Sit-down
Restaurant $2,200,000 28 $2,200 $5,280 $1,275 $723
Commercial
Landlord $1,200,000 2 $1,200 $12,972 $0 $466
General
Contractor $5,000,000 30 $5,000 $9,000 $9,000 $656
Retail Boutique $400,000 6 $400 $480 $330 $293
Models
Single Gross Receipts Rate Models
Model Structure:• One Gross Receipts Rate for all Businesses• Small Minimum Fee• Exempt business definition remains unchanged• Proposed models have higher rates than the existing $1 per $1,000 rate for most businesses • Removes the current taxation cap
Pros:• Simple for businesses to know what they will pay• Increased Revenues• Increases equity as all businesses pay the same rate on gross receipts
• Like the current structure outcome, where most
businesses pay the same rate, this further increases simplicity and allows no other option based on business type Cons:
• Does not consider the business type in deciding rates Single Gross Receipts Rate
Number of
Businesses
Total Taxable
Gross Receipts Current Revenues
Option 1:
Tax Amount
$1.50/thousand
Option 2:
Tax Amount
$2.00/thousand
3,190 $5.04 Billion $6,561,000 $7,498,000 $9,970,000
Increased Revenue $937,000 $3,409,000
Tax Basis Taxable Gross Receipts
Flat Rate $25 Flat Rate (Up to $25,000 Gross Receipts)
Gross Receipts Tax + $1.50 per thousand dollars of Gross Receipts (0.0015 x Gross Receipts) Variable Gross Receipts Rate Models
Model Structure:• Variable Gross Receipts Rate for businesses based on business type• Small Minimum Fee• Model removes the special or specific categories in the current code in favor of 5 base categories and an exempt category.
• Removes the current taxation cap
Pros:• Only five taxable categories –
Improved Simplicity
• Increased Revenues depending on the rates
chosen
• Increases equity further by accounting for
differences in business activity
Cons:
• Definitions have the potential to be too ambiguous• Businesses with multiple tax types will need multiple licenses
• Could be considered unfair if the rate is specifically targeted for a break or higher rate
Variable Gross Receipts Rate Models
*These categories are roughly defined in Appendix A.
Categories* Minimum Rate Option 1 Option 2
Contractor
$25 Flat Rate (Up to
$25,000 Gross Receipts)
0.002 X Gross 0.003 X Gross
General/Retail 0.00075 X Gross 0.001 X Gross
Property Rental 0.0035 X Gross 0.004 X Gross
Services 0.002 X Gross 0.003 X Gross
Professional 0.003 X Gross 0.004 X Gross
Exempt $0 $0 $0
Rate Structure
Variable Gross Receipts Models
Business Type Number of
Businesses
Est. Taxable
Gross Receipts
Current Taxes Variable Gross
Receipts Option 1
Est. Revenue
Variable Gross
Receipts Option 2
Est. Revenue
Contractor 719 $379 Million $481,000 $745,000 $1,108,000 General/Retail 337 $1.77 Billion $2,059,000 $1,325,000 $1,764,000 Property Rental 1,072 $418 Million $1,312,000 $1,406,000 $1,602,000 Professional 429 $1.54 Billion $1,713,000 $4,566,000 $6,087,000 Services 566 $1.1 Billion $1,213,000 $1,842,000 $2,755,000 Exempt 67 $0 $0 $0 $0
Totals 3,190 $5.04 Billion $6,561,000 $9,884,000 $13,314,000 Increased Rev. $3,323,000 $6,753,000
Business Scenarios – Estimated Revenue
Hypothetical
Business
Business
Gross
Receipts
Business
Employee
Count
Emeryville
(Current)
Single
Gross
Receipts
Option 1
Single
Gross
Receipts
Option 2
Variable
Gross
Receipts
Option 1
Variable
Gross
Receipts
Option 2
Berkeley South San Francisco Walnut Creek
Consulting Firm $1,800,000 12 $1,800 $2,688 $3,575 $5,350 $7,125 $6,480 $3,300 $622 Supermarket $9,500,000 80 $9,500 $14,238 $18,975 $7,131 $9,500 $5,700 $3,615 $1,962 Biotech/R&D
Business
$250,000,00
0 100 $250,000 $374,988 $499,975 $749,950 $999,925 $900,000 $4,515 $6,814 Sit-down
Restaurant $2,200,000 28 $2,200 $3,288 $4,375 $1,656 $2,200 $5,280 $1,275 $723 Commercial
Landlord $1,200,000 2 $1,200 $1,788 $2,375 $4,138 $4,725 $12,972 $0 $466 General
Contractor $5,000,000 30 $5,000 $7,488 $9,975 $9,975 $14,950 $9,000 $9,000 $656 Retail Boutique $400,000 6 $400 $588 $775 $306 $400 $480 $330 $293 Taxation Cap Analysis
Number of Businesses Single Gross Receipts Option 1 Single Gross Receipts Option 2 Variable Gross Receipts Option 1 Variable Gross Receipts Option 2 Count of Businesses
Affected 3422
Total Revenue Impact $389k $1M $830k $1.41M
Cap Amount*
$450,997.99
*Cap amount for this example is the current maximum tax for Emeryville as of August 2025 Revenues shown in this table are revenues lost from total revenue estimates presented earlier if a cap is retained.
Questions?
Appendix A – Category Definitions
In Model 3, we use five basic business categories along with an exempt category. These are five basic structures that are common across municipalities. The definitions below are general and not meant to be the complete definitions that would appear in a municipal code.Contractors: These are persons or firms that are carrying on the business of a contractor, subcontractor, or builder, particularly the construction or repair of any buildings. Examples include but are not limited to construction, plumbing, HVAC, etc. General Commerce/Retail: These are retailers, restaurateurs, and other general businesses. All these businesses are likely to contribute to your tax base in other ways (i.e., sales tax) and often have lower profit margins. Property Rental: Although listed separately, this category includes any business that leases, rents, or provides use of real property to another individual or entity for compensation. Examples include, but are not limited to, commercial leasing, residential rental, parcel leasing, hoteliers, etc. The city could also include language and rates for taxing short-term rentals in this category. Services: This sector offers services that require minimal to no higher education or training. It is also the default category for any business that is not explicitly defined in one of the other five categories. Examples include, but are not limited to, hairstylists, gardeners, nail salons, etc. Professional and Advanced: These businesses offer services that require rigorous training through higher education or vocational institutions that certify the complete acquisition of skills and the ability to provide such professional services. This also includes businesses that can be considered "Advanced Services," such as those in the research and development and scientific fields. Examples include, but are not limited to, a doctor’s office, a law office, a consulting firm, etc.
Current Rate Type Current Registry Business Count Current Tax Rate Proposed Category Proposed Rate Model 3a ($/$1000) EM: Gross Receipts 1,025 Gross Receipts $1/$1,000 Varies based on specific type Between $0.75 and $3.50 per $1,000 EM: GR Tax Residential
Landlords 872 Gross Receipts $1/$1,000 Rental $3.50
EM: Annual Contractors 658 Greater of GR $1/$1,000 or Flat Rate Contractor $2.00 EM: Rental of Commercial
Property 188 Gross Receipts $3.50/$1,000 Rental $3.50
EM: Professional and Semi-pro 177 Gross Receipts $1/$1,000 Professional $3.00 EM: Exemption for Nonprofit
Corp 67 Exempt from BLT Exempt $0.00
EM: Certain Businesses Not
Having Gross Receipts 60 Gross Payroll $1/$1,000 Varies based on specific type Between $0.75 and $3.50 per $1,000 All Other Rate Types (49)* 143 Varies from Flat Rates to Gross Receipts Varies based on specific type Between $0.75 and $3.50 per $1,000 Totals 3,190
Appendix B – Rate Type Crosswalk
*Please see the supplemental documentation for full crosswalk