Change In Business Tax Pondered In Richmond

RICHMOND, CA — The Richmond City Council on Tuesday will discuss a prospective November ballot measure that would change the way that the City assesses its business tax.

The proposed change is from charging business taxes based on the number of employees they have, to a system that charges according to businesses' gross receipts, ranging from 0.075 percent to 1.395 percent of gross receipts.

The new methodology, a City of Richmond report says, would charge the highest rates on businesses with the highest gross revenue, with exemptions for small businesses with gross receipts under $250,000. It is estimated that, if approved by voters, it would generate an estimated $4.9 million annually in additional revenue until voters choose to end it.

The revenue, a city report says, would help fund services for Richmond youth as well as libraries, parks, community centers, emergency response and other city services. These services may see budget cuts thanks to a structural budget deficit compounded by COVID-19 related revenue shortfalls.

The city had also been pondering a parcel tax on vacant parcels to generate revenue, and also changes to the top tiers of the current property transfer tax. The gross receipts business tax was chosen because the parcel tax would require 2/3 voter approval, and the parcel tax changes garnered the lowest approval in polling.

Taking City Council feedback on Tuesday, staff is scheduled to return with the final proposed ballot measure at the July 28 council meeting. At the point, the council is expected to vote whether to put the measure on the November ballot. Tuesday's council meeting begins at 6:30 p.m., and in this COVID-19 era is online only.

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