San Luis Obispo seeking business fee and tax revenue
August 23, 2010
The city of San Luis Obispo sent out 3,900 letters seeking business license fees from rental property owners today as part of an aggressive campaign to increase license fee revenues.
The letter asks landlords to pay a business application fee of $68 to the city and a yearly tax of 50 cents per thousand. The city says that obtaining business tax and license fees from landlords could increase city revenue by $80,000 a year.
In this case, the city has decided to waive any retroactive fees.
The city has been actively approaching business owners that might be doing business in the city. San Luis Obispo municipal codes provide city officials great discretion in determining which businesses require a license and how tax assessments are determined.
“The Code defines business very broadly in a way that we have concluded in the past includes out of area businesses soliciting customers and making money from them in the city,” said Debbie Malicoat, SLO finance manager. “We also have an apportionment provision that recognizes that an out of area business may derive only a small percentage of its revenue from city business activity and may be subject to taxes in multiple cities.”
If the amount of revenue a business has generated from work conducted in the city limits is difficult to determine, the finance director will do an investigation and determine how much tax a business has to pay in a “reasonable and nondiscriminatory manner,” according to chapter 301 of the municipal code.
“In fixing the business tax to be charged, the finance director shall have the power to base the business tax upon a percentage of gross receipts, operating expenses, floor space, payroll, number of employees, business taxes paid to other cities, or any other measure which will assure that the business tax assessed shall be uniform with the amount of business done in the city of San Luis Obispo, or of businesses of a like nature, so long as the amount assessed does not exceed the business tax set forth in this chapter,” according to the municipal code.