Business License Tax Modernization Plan

From 2025 through 2026, the City embarked on a Business License Tax Modernization Plan, which aims to address five primary goals to: Simplify, Clarify and Modernize the tax code, and create a Fair and Equitable tax structure that supports the City's long-term Fiscal Sustainability. 

Following various public meetings and outreach efforts, the City has developed a proposed tax structure that aligns with the five goals of the Plan. A proposed ballot measure to update the business license tax code will be considered at the August 4, 2026, City Council Meeting. 

To learn more about the Business License Tax Modernization Plan, please reference the links below.

• Fact Sheet on Business License Tax Measure
• FAQs on Business License Tax Measure
• Informational Mailer on Business License Tax Measure

PUBLIC MEETINGS

• November 6, 2025 -  Finance Subcomittee Meeting - Presentation of Goals and Priorities
• March 3, 2026 - City Council Meeting - Presentation of Goals and Priorities, Phase 1 Ordinance 26-0005
• March 17, 2026 - City Council Meeting - Second Reading of Phase 1 Ordinance 26-0005
• April 23, 2026 - Business License Tax Forum Presentation
• May 12, 2026 - City Council Meeting - Presentation of Tax Study
• July 21, 2026 - City Council Meeting - Presentation of Polling Results

WHY UPDATE THE CODE?

The Business License Tax Code determines how businesses pay their annual license tax. While most businesses are taxed based on gross receipts, the current system has several challenges:

• Outdated structure -Outdated code from 1971 hasn’t kept pace with today’s diverse business types.
• Unequal tax impacts - Some businesses pay the same amount regardless of their size or revenue.
• Complexity - Current tax structure is challenging for new and existing businesses to understand and for staff to administer.

Example of Current Inequality
For example, under the current system, a business with $5 million in annual gross receipts pays the same tax as one earning $10 million or more — $12,156 per year.

GOALS

The City’s update is guided by five primary goals:

• Simplify – Streamline the code for easier understanding and administration.
• Clarify – Resolve inconsistencies and modernize definitions.
• Modernize – Reflect current business practices and technologies.
• Ensure Fairness and Equity – Balance tax obligations among small and large businesses.
• Promote Fiscal Sustainability – Maintain revenue that funds essential City services.