Laserfiche WebLink
Voter Ballot Measure Resolution to Restructure Business License Tax Code <br />June 21, 2022 <br />Page 2 <br />2 <br />7 <br />8 <br />4 <br />1. Restructure non-cannabis business license tax rates and charges, to improve tax <br />equity among all business sizes, with the aim of achieving an overall net revenue <br />neutral result, designed to reflect current best practices and to recognize the <br />impact of home-based businesses and the new “gig” economy. <br />2. Provide a flexible Tax Holiday period for unlicensed, past due, or under-assessed <br />businesses to obtain a valid business license or satisfy unpaid or unassessed <br />taxes. <br />3. Align with closely associated provisions of the City of Santa Ana’s Business <br />License Tax Code, Santa Ana Municipal Code (“SAMC”) Chapter 21. <br />The current business license tax rate structure of the SAMC Chapter 21 favors large <br />businesses, whose contributions to the City are indirectly subsidized by medium and <br />small businesses, whose effective tax rates are considerably higher than large <br />businesses due to the steeply regressive nature of the gross receipts tax rate schedules <br />originally adopted. The intent of the proposed restructuring of the City’s non-cannabis <br />business license tax rates is to effectively achieve such a proportional rate structure that <br />is both simpler and more equitable to medium and small businesses, home-based <br />businesses, and independent contractors and free-lancers. <br />Furthermore, on May 17, 2022, City Council approved staff’s recommended three-part <br />phased approach comprised of: (1) a leading consolidation Ordinance of Rates and <br />Schedules; (2) the adoption of a Voter Ballot Measure; and (3) a trailing cleanup <br />Reconciliation Ordinance, that would accomplish the following: <br />I.Phase One was the Consolidation Ordinance, which was presented to City Council <br />for adoption and first read on June 7, 2022. The Consolidation Ordinance includes <br />the adoption of a consolidated Rates and Schedules to unify all non-cannabis tax <br />rates, schedules, and charges currently contained in Articles V through X of SAMC <br />Chapter 21, respectively, into a single article (Article X) for clarity and cohesion. <br />II.Phase Two is the Voter Ballot Measure Resolution and Ordinance. The <br />Resolution would give notice of a General Municipal Election to be held in the City <br />of Santa Ana on November 8, 2022 for the submission of a Ballot Measure to the <br />qualified voters of a proposed Ordinance restructuring non-cannabis business <br />licensing rates. The proposed Ordinance would act to convert all regular brick and <br />mortar businesses, excepting warehouses, state licensed contractors, itinerant <br />businesses, and various miscellaneous independent contractors from a steeply <br />regressive set of gross receipts tax rate structures to a proportional set of single <br />gross receipts tax rates. The Ordinance includes reduced minimum basic tax rate <br />amounts and a maximum gross receipts tax cap amount.