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Business License Modernization Project
The
City of Santa Monica adopted its existing Business License Tax code in 1990,
more than 30 years ago. Since the 1990’s, there have been significant shifts in
the way business is conducted within Santa Monica and entirely new business
sectors have emerged. This has created
administrative challenges, such as outdated tax classifications and
definitions, tax rates that do not align with neighboring jurisdictions,
limited exemptions for our small business community, and outdated capped
amounts. Santa Monica’s Business License
Tax can be found in the City’s municipal code: Article 6 Business, Professions and Trades
Business license tax is a General Fund tax on the business
activity that takes place in Santa Monica and supports essential City services. The Finance Department collects business
license taxes from approximately 23,000 businesses, 13,000 of those businesses
are physically located within the City.
Over
the past year, City staff has been working with outside consultants HdL and
Baker Tilly to conduct a comprehensive review of the existing BLT program and
tax ordinance to identify areas for improvement. The City initiated a review of the existing
business license code and using the City Council’s priorities as a guide,
developed the following goals:
·
Create a fair, equitable and simple
business license taxing structure
·
Ensure that the taxing structure is
competitive with neighboring jurisdictions
·
Retain, attract, and encourage the
expansion of businesses
·
Proactively address emerging business
models
·
Protect the City’s General Fund tax revenue
stream