CC SR 20180116 D - Annual Business License TaxRANCHO PALOS VERDES CITY COUNCIL
AGENDA REPORT
AGENDA DESCRIPTION:
MEETING DATE: 01/16/2018
AGENDA HEADING: Consent Calendar
Consideration and possible action regarding the annual Business License Tax.
RECOMMENDED COUNCIL ACTION:
(1) Do not increase the City's Business License Tax Rate for 2018.
FISCAL IMPACT: If the recommended action is approved, there will be no change to
the adopted budget.
Amount Budgeted: $814,400
Additional Appropriation: N/A
Account Number(s): 101-300-0000-3210
ORIGINATED BY:
Allan Kaufman, Senior Administrative Analyst
REVIEWED BY:
Deborah Cullen, Director of Finance
APPROVED BY:
Doug Willmore, City ManagergAA %*,*.
BACKGROUND AND DISCUSSION:
As required by Section 5.04.050 of the City's Municipal Code, all business activity
performed within the City of Rancho Palos Verdes requires the business owner to
obtain a business license and to pay the related business license tax (BLT).
This annual report is the result of the City Council adopting Staff's recommendation
of January 17, 2017, to consider discontinuing the practice of automatically
increasing the Business License Tax annually by the Consumer Price Index (CPI)
inflator. In addition, Staff recommended that the City Council direct Staff to bring the
Business License Tax increase option back to the City Council annually for
direction.
At this time, Staff is recommending that the 2018 Business License Tax remain
unchanged from the 2017 rate. However, the State fee for Certified Disability
Access Specialist Program will need to increase from one dollar to four dollars
annually for business owners that conduct business in the City. This fee is
mandated by the State and is used to increase disability access and compliance
with construction -related accessibility requirements.
Business License Components
As a reminder, there are two primary features of the business license tax:
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1) A minimum tax based on the location a business operates (i.e., located
inside/outside the City or home -occupied) and the type of work or service
performed.
2) A flat rate tied to a business's gross receipts. This rate also is multiplied for every
$1,000 in gross receipts in excess of $50,000. This rate applies to businesses
physically located inside or outside the City. Contractors, itinerant vendors,
builders and developers, operators of commercial vehicles (i.e., taxis) are
exempt.
Though no rate increase to the BLT is recommended for 2018, this tax is still expected
to generate $814,400 in FY17-18. This is in line with historical actuals over the past
three years.
ALTERNATIVES:
In addition to the Staff recommendation, the following alternative action is available for
the City Council's consideration:
Take other action as deemed appropriate by the City Council.
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