Belmont is leaning toward an updated business license tax structure based on gross receipts, which would scrap the flat rate model that many elected officials and business owners claim unfairly burdens smaller enterprises.
Under the current model, businesses can fall into one of more than 20 categories, which then determines its effective tax rate. But according to a staff presentation, the tax burden falls more heavily on craft business owners, who tend to make less than $125,000, compared to other categories, such as restaurants and doctors’ offices, all of which may earn even more revenue.
During a meeting Tuesday, April 23, the City Council directed staff to move forward on a model that would reduce the number of business categories to six, with taxes ranging from 40 cents to $1 per $1,000 in receipts, depending on the type. Restaurants and retail stores would fall under the lowest tier, with commercial and residential rental companies paying the highest rate.
Jeanette Sacco-Belli, who runs a local art and music studio, said she was in favor of such a change, as the current model disproportionately affects businesses like hers.
“Anything is better than what we have now, which is the flat rate. I have always been saddened by the unfairness of the business tax situation,” she said during the council meeting. “For me to keep paying the same flat amount as a person that makes hundreds of thousands of dollars, as you know, is wrong.”
According to city staff analysis, about 63% of businesses would see an overall decrease in their BLT — as the minimum would be reduced from $341 to $25 — but the revenue would still generate slightly more than what Belmont currently receives from the tax, roughly $1.1 million.
Amy Buckmaster
Recommended for you
But Amy Buckmaster, CEO of Chamber San Mateo County, implored the council to collect more data before moving forward with the recommended structure.
“We believe that a move to a gross receipts model is not good public policy. Gross receipts tax models impact businesses with low profit margins and high production volumes, such as restaurants and new high-revenue businesses who see losses in early stages of their business, such as entrepreneurs and startups,” Buckmaster said.
Councilmembers still moved forward with the gross receipts model, however, citing the time-sensitive necessity of changing an antiquated tax structure.
“Our current system is really problematic for me,” Councilmember Gina Latimerlo said. “It’s important to do this change sooner rather than later. I do appreciate that [the gross receipts model] does have a mechanism to be fair to categories of businesses that have higher overhead and smaller profit margins.”
Pending final council approvals between May and June, Belmont voters will decide on the update as part of a ballot measure this November.
Keep the discussion civilized. Absolutely NO
personal attacks or insults directed toward writers, nor others who
make comments. Keep it clean. Please avoid obscene, vulgar, lewd,
racist or sexually-oriented language. Don't threaten. Threats of harming another
person will not be tolerated. Be truthful. Don't knowingly lie about anyone
or anything. Be proactive. Use the 'Report' link on
each comment to let us know of abusive posts. PLEASE TURN OFF YOUR CAPS LOCK. Anyone violating these rules will be issued a
warning. After the warning, comment privileges can be
revoked.
Please purchase a Premium Subscription to continue reading.
To continue, please log in, or sign up for a new account.
We offer one free story view per month. If you register for an account, you will get two additional story views. After those three total views, we ask that you support us with a subscription.
A subscription to our digital content is so much more than just access to our valuable content. It means you’re helping to support a local community institution that has, from its very start, supported the betterment of our society. Thank you very much!
(0) comments
Welcome to the discussion.
Log In
Keep the discussion civilized. Absolutely NO personal attacks or insults directed toward writers, nor others who make comments.
Keep it clean. Please avoid obscene, vulgar, lewd, racist or sexually-oriented language.
Don't threaten. Threats of harming another person will not be tolerated.
Be truthful. Don't knowingly lie about anyone or anything.
Be proactive. Use the 'Report' link on each comment to let us know of abusive posts.
PLEASE TURN OFF YOUR CAPS LOCK.
Anyone violating these rules will be issued a warning. After the warning, comment privileges can be revoked.