CC SR 20190115 D - Annual Business License Tax RateRANCHO PALOS VERDES CITY COUNCIL MEETING DATE: 01/15/2019
AGENDA REPORT AGENDA HEADING: Consent Calendar
AGENDA DESCRIPTION:
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 2019.
FISCAL IMPACT: If the recommended action is approved, there will be no change to
the adopted budget.
Amount Budgeted: $904,100
Additional Appropriation: N/A
Account Number(s): 101-300-0000-3210
ORIGINATED BY: Christopher Browning, Senior Administrative Analyst
REVIEWED BY: Deborah Cullen, Director of Finance
APPROVED BY: Doug Willmore, City Manager
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
on 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 2019 Business License Tax remain
unchanged from the 2018 rate. The State fee for Certified Disability Access
Specialist Program which increased from one dollar to four dollars annually in 2018
will remain at four dollars in 2019. This fee is mandated by the State and is used to
increase disability access and compliance with construction-related accessibility
requirements.
Based on Councilmember Cruikshank’s request and by consensus of the City
Council, Staff is also preparing a report for a future City Council meeting to review
the Business License Tax Ordinance. This review will examine the tax as it
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pertains to outside businesses that engage in classifications identified in the
Municipal Code but do not have a fixed place of business within the City.
Business License Components
As a reminder, there are two primary features of the business license tax:
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 2019, this tax is still expected
to generate $904,100 in FY18-19. 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:
1. Take other action as deemed appropriate by the City Council.
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