Business License Tax
Study Session
Presentation to City Council
Greg Henry, Financial Services Manager
June 26, 2024
Agenda
Methods of Taxation
Current Methods and Revenue
Tax Cap
Updates by Category
Penalty
Q & A
Methods of Taxation
Flat Rate Per Employee
Gross Receipts Per Units
Current Tax
Structures
• Primarily Per Employee Base
• 21 General categories
• Each has separate methods of
calculation
• Tax Cap of $150,866.50
2023 Business License Tax Revenue
Business type Revenue % of
Rev
# of
Businesses
Description of Current
Business License Tax
Professional $1,342,996 54% 477 $226 per associate
General Business 754,917 30% 1,637 Per employee rate, currently $113.50 + $23 per employee/owner
Contractor 281,537 11% 1,300 Flat rate of 226.25 for contractors, $188.25 for subcontractors
% Gross Receipts
64,453 2.6% 13
% of gross receipts
Other 66,257 2.6% 76 Various
Total $2,510,160 100% 3,503
Tax Cap - Considerations
Keep Cap –
150,866.50
1 Set to
$500,000
2 Set to
$750,000
3 Set to
$1,000,000
4 Remove
Cap
5 Professional – Per Associate Rate
$226 $275
7 General Businesses
Proposed Structure, Per
Employee
• Base: $150
# of employees Per Employee
0-4 employees $30
5-9 employees $35
10-19 employees $50
20-49 employees $60
50-99 employees $75
100-249 employees $80
250-499 employees $90
500-999 employees $100
1,000 employees+ $150
Breakdown of Current Businesses
9 # of employees # of
companies
% of total
companies
% of 2023
revenue
% of projected
revenue
0-4 employees 1,050 64.2% 24.2% 2.5%
5-9 employees 253 15.4% 9.9% 2.5%
10-19 employees 162 9.9% 9.9% 4.1%
20-49 employees 116 7.1% 13.1% 8.4%
50-99 employees 33 2.0% 7.4% 6.3%
100-249 employees 17 1.0% 8.4% 8.7%
250-499 employees 3 0.2% 3.0% 3.4%
500-999 employees 2 0.1% 3.8% 5.0%
1,000 employees+ 1 0.1% 20.4% 59.2%
Total 1,637 100% 100% 100%
Impact on Sample Businesses
10 # of
employees
Current Rate Proposed Rate $ Increase
2 159.50 210.00 50.50
7 274.50 375.00 100.50
15 458.50 745.00 286.50
35 918.50 1,905.00 986.50
75 1,838.50 4,695.00 2,856.50
175 4,138.50 12,575.00 8,436.50
375 8,738.50 29,835.00 21,096.50
750 17,363.50 66,095.00 48,731.50
2,500 57,613.50 316,145.00 258,531.50
5,000 115,113.50 691,145.00 576,031.50
10,000 150,886.50 1,441,145.00 1,290,258.50
Construction Contractors
Moving to a Percentage of
valuation
Set at 0.18%.
Increases tax revenue from
$300,000 to $1.5 million
11 Temporary Vendor
12 Daily charge
increased from
$75.25 to $150
Annual Earnings in
SSF, under $500,
exempt from BLT
Short Term Rental
of Residential Real
Property • Remove the 5-unit threshold • $150 base rate • $10 per unit rate • Hotels, Motels • 23% increase 13 Long Term Rental
of Residential Real
Property
• Remove the 5-unit threshold
• No base rate
• $50 per unit rate
• Includes mobile parks
14 Penalty
15 Current - 10% of the tax due
if payment is more than 30
days late with an additional
15% of the tax due if it is
more than 60 days late
Proposed – 10% a month of
the tax due past the first
month up to 100% of the
original amount.
QUESTIONS?