Council consideration of Placing a Revenue Measure
on the Nov. 2026 ballot
City Council Meeting| July 6, 2026
Business License Tax Modernization
1 2
Agenda
Agenda
• Summary of previous Council direction
• Summary of outreach
• Council Q&A from 6/8 Council meeting
• Overview of current tax model
• Summary of Changes
• Recommended Action
3 June 8
2026
4 mmary of outreach
SUMMARY OF OUTREACH
4/7 - 4/30: Staff commenced identifying and engaging relevant financial consultants and developing draft outreach
materials
4/16: Follow-up dialogue with Chamber of Commerce
commences
• 5/11: Staff presented project overview to Chamber
of Commerce Executive Board and addressed
questions
• 5/20: Responded to follow-up questions via email
5/19: Online survey portal launched:
www.sanleandro.org/welisten
• Dedicated phone number posted for calls or texts
• Mailer and survey sent to 20,000+ residents
5/20 - 6/10:Outreach to Businesses + Public
• Informational webpage launched:
www.sanleandro.org/2026biztax
• Social media posts, videos + online ads posted
• Press release issued
• Notice emailed to S.L. Business License database
(7,200+ businesses) + housing providers
• Email notification to business associations
• Methods of public feedback highlighted:
• Online survey - eComments - Email –
Dedicated text + call line
6/8: Council hosts special meeting to review draft tax model and receive feedback from business owners and the
public, and directs staff to modify the tax model to
incorporate mitigations
6/24 – 7/6: Additional Outreach Performed
• Notice emailed to S.L. Business License database +
housing providers
• Email notification to business associations
• Social media posts
• Updated website with the new model
COMMUNITY ENGAGEMENT FEEDBACK
• 997 Total Survey responses (829 online + 168 via written two-way mailer) • 50.4% supported the City's Business License Tax Proposal • 47.1% had questions or concerns
• 30% of whom requested more detailed information
Overall themes:
• Crime, homelessness, public safety, and street conditions were top concerns • More details of the proposal needed
• Concerns about impacts on small businesses
• Some comments advocated for a better business environment (permitting, etc.), and highlighted the importance of business attraction & retention • Some comments asked for better budget management and cost control • Concerns about consumer price impacts stemming from increased annual taxes 5 6
Council questions from 6/8 Council meeting
COUNCIL QUESTIONS FROM 6/8 COUNCIL MEETING
1. What are the expected impacts on economic development? • Some businesses would continue to see significant annual increases under the revised model, which are concerning.
• Additional time and analysis could further evaluate such impacts.
2. Could these funds be earmarked specifically for infrastructure? • No, per requirements of state law.
3. Could the fee be structured so that no businesses see a fee decrease? • While contrary to best practices, such a change is legal and feasible. 7 Council questions from 6/8 Council meeting (Cont’d)
COUNCIL QUESTIONS FROM 6/8 COUNCIL MEETING (CONT’D)
4. Can this be structured in a way to look at profit margins - rather than gross receipts? • No. The City cannot legally use a company’s profit margins as the basis for taxation.
5. What does a “high paying employer” mean?
• There is no formal definition.
6. Where would a data center fit into this framework?
• Under the proposed tax model, a data center would be classified as industrial.
7. What about other emerging industries?
• The proposed consolidated business categories account for emerging industries in the modern economy.
As new industries and business types emerge, they may be evaluated based on the type of business activity as defined in the new use types and placed in the appropriate category.
8. Can the measure incorporate factors such as climate change, use of energy or water etc.? • Additional time and analysis would be required to address these policy issue areas.
CHANGES TO THE MODEL SINCE JUNE 8TH
• Property rental and mobile home park tax rates would remain unchanged.
Current rates:
• Residential
• Property rental & mobile homes: $171 base fee + $15.80/unit • Commercial
• $171 base fee + $26.30/1,000 square feet
• Warehouses tax rates have been increased to $4.50 per thousand dollars in gross receipts. • For any business with annual gross receipts greater than $50 million, the tax model incorporates a 25% rate discount.
• Public Utilities have been re-classified to have the same rate as manufacturers, per the requirements of California law
8 What it would look like:
Modified Tax Model in San Leandro
9 A
Categories
B
Business
Count
C
Minimums
D
Est. Gross
Receipts
E
6/8 Model
Rates per Thousand
F
6/8 Model
Est. Annual Revenue
G
7/6 Revised Model
Rates per Thousand*
H
7/6 Revised Model
Est. Annual Revenue
1 Contractor 2,317 $150.00 $1,335,000,000 $2.00 $2,614,000 $2.00 $2,614,000 2 General/Retail 1,178 $132.00 $2,033,000,000 $0.43 $917,000 $0.43 $880,000 3 Industrial 378 $132.00 $2,021,000,000 $0.45 $910,000 $0.45 $882,000 4 Professional 856 $264.00 $972,000,000 $2.50 $2,457,000 $2.50 $2,072,000 5 Property Rental 2,761 N/A N/A $2.25 $567,000 Same as existing** $1,128,000 6 Service 1,309 $264.00 $646,000,000 $2.00 $1,408,000 $2.00 $1,408,000 7 Warehouse 58 $132.00 $91,000,000 $1.00 $91,000 $4.50 $405,000 8 Mobile Home Park 5 $581.00 $1,000,0000 $45 per space $33,000 Same as existing** $12,000 9 Exempt 134 $0.00 $0 $0.00 $0 $0 $0
10 GRAND TOTAL 8,996 $7,341,000,000 $8,997,000 $9,401,000 * First $25,000 of revenue exempted; Businesses with +$50M in revenue discounted 25% ** Property Rental Rates - $171 + $15.80/unit residential & mobile home or $26.30/1,000 sf commercial Drilling down further:
Revised (7/6) tax model in San Leandro*
* Numbers are rounded estimates only for illustrative purposes * First $25,000 of revenue exempted; Businesses with +$50M in revenue discounted 25% 10
A B C D E F G H I J
Retail Industrial Service
Goods Car Dealer Restaurant Manufacturing Wholesale Warehouse Professional Non-professional Contractor 1 Gross Receipts $60 M $65 M $1 M $400 M $100 M $5 M $50 M $250 K $25 M 2 Employees 225 70 12 350 200 150 250 8 150
3 Current Rate $13,000 $4,000 $800 $20,000 $32,000 $20,721 $31,000 $1,000 $16,000 4 6/8 Model Rate $25,800 $27,000 $430 $180,000 $45,000 $5,000 $125,000 $500 $50,000 5 7/6 Revised Model* $19,350 $20,963 $430 $135,000 $33,750 $22,500 $93,750 $500 $50,000 6 Current vs. 7/6 Model Difference $6,350 $16,963 ($370) $115,000 $1,750 $1,779 $62,750 ($500) $34,000 7 Percentage change from current
to 7/6 revised model 49% 424% -46% 575% 5% 9% 202% -50% 213% Estimated Business Taxes by City
(hypothetical examples in Bay Area cities)
11 A
B
Large Retail
C
Auto Dealer
D
Grocery
E
Small Retail
F
Restaurant
G
Prof. Services
H
Large Prof.
Services
I
Small
Contractor
J
Large Contractor
K
Manufacturer
1 Employees 200 30 60 5 25 20 150 5 55 90
2 Gross
Receipts $400 M $20 M $10 M $1.5 M $1.9 M $10 M $70 M $2 M $18 M $30 M 3 Current San
Leandro $10,711 $1,752 $3,333 $435 $1,489 $2,811 $19,971 $699 $5,979 $4,914 4 7/8 Model
San Leandro $129,000 $8,600 $4,300 $645 $817 $25,000 $131,250 $4,000 $36,000 $12,900 5 Current
Hayward $107,999 $2,243 $1,143 $404 $512 $13,267 $93,067 $80 $167 $133 6 Proposed
Hayward $236,000 $8,500 $3,500 $450 $570 $15,000 $105,000 $1,000 $16,200 $8,902 7 Fremont $100,300 $5,030 $2,530 $405 $505 $13,030 $91,030 $295 $1,895 $9,030 8 Pleasanton $120,000 $6,000 $3,000 $450 $570 $3,000 $21,000 $600 $5,400 $9,000 9 Alameda $160,000 $8,000 $4,000 $600 $760 $4,000 $28,000 $800 $7,200 $4,845 10 Emeryville $400,000 $20,000 $10,000 $1,500 $1,900 $10,000 $70,000 $2,000 $18,000 $30,000 11 Berkeley $480,000 $24,000 $6,000 $1,800 $2,280 $36,000 $252,000 $3,600 $32,400 $14,536 12 Oakland $969,050 $34,875 $8,825 $1,450 $1,890 $45,600 $343,100 $3,900 $48,350 $17,599 12 Recommended action
RECOMMENDED ACTION
It is recommended that the City Council either:
A) By majority vote, adopt the proposed resolution as-written, to place the business license tax modernization measure on the November 3, 2026 election ballot, and designate author(s) for ballot measure argument and rebuttal
or
B) Direct staff to continue additional fiscal analysis with the goal of bringing forward a proposed business license tax modification as part of the November 2028 election (i.e. the next regular election that is eligible for consideration of such a measure, in the absence of a City Council declaration of a fiscal emergency)
Note: Without 4 affirmative votes for any action, staff will cease all further efforts.