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Proposed Ballot Measure to Restructure Business License Tax Code
<br />May 17, 2022
<br />Page 2
<br />business" versus "whole & manufacturing businesses", etc. pay the same percentage rate
<br />on all their gross receipts revenue generated.
<br />The intent of the proposed restructuring of the City's non -cannabis business license tax
<br />rates is to effectively achieve such a proportional rate structure that is both simpler and
<br />more equitable to medium and small businesses, home -based businesses, and
<br />independent contractors and free-lancers. In 1987, the business license tax code did not
<br />properly factor in the evolving effect of home -based businesses and the future gig
<br />economy, which have grown tremendously in the last 35 years. Historically, Santa Ana
<br />business license taxation has been composed of a mix of tax assessment methodologies
<br />and rate structures. These include the following:
<br />• Gross Receipts Business License Tax Assessment, including, but not limited to,
<br />retail sales and services, commercial property rental, wholesale sales and
<br />manufacturing, processing, gas and oil sales, and telecommunication utilities.
<br />• Variable Flat Rate Business License Tax Assessment, including, but not limited to,
<br />ambulances, billboard signs, buses, limousines or other vehicles for hire, catering
<br />trucks, produce or fruit & produce trucks, delivery vehicles, ice cream trucks, junk
<br />collection vehicles, shoeshine stands, taxicabs, tow trucks, vending machines, and
<br />professional offices (physicians, dentists, attorneys, etc.).
<br />• Fixed Flat Rate Business License Tax Assessment, including, but not limited to,
<br />advertising (handbill) services, amusement centers, bankruptcy -closeout -fire -
<br />wreck sales, sports exhibitions, carnivals or circuses, Christmas tree or pumpkin
<br />patch lots, dance halls or places, daycare or nursery services, firework stands,
<br />gratuitous licensees or hobbyist licensees, home occupations, independent
<br />contractors per individual, itinerant merchants, pawnbrokers, residential rentals,
<br />solicitor/peddler as principal, state licensed contractors, theatrical performances,
<br />and warehouses and storage.
<br />Through a three-part phased approach comprised of (1) a leading consolidation
<br />Ordinance of Rates and Schedules; (2) the adoption of a Voter Ballot Measure; and (3)
<br />an optional trailing cleanup Reconciliation Ordinance, staff is proposing to accomplish the
<br />following:
<br />Phase One includes the adoption of a consolidated Rates and Schedules
<br />Ordinance to unify all non -cannabis tax rates, schedules, and charges currently
<br />contained in Articles V through X of SAMC Chapter 21, respectively, into a single
<br />article (Article X) for clarity and cohesion. This Ordinance will facilitate a more
<br />compact Voter Ballot Measure. (If the Voter Ballot Measure process is deferred
<br />after this initial phase, the changes made will not negatively impact continuing of
<br />non -cannabis business license taxes pursuant to the pre-existing rate structure.)
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