Business license tax increase



Business license tax increase

The Alliance worked collaboratively with Mayor Wheeler on his budget proposal, which would increase the business license tax, currently at 2.2 percent of a businesses’ net income, to 2.6 percent, as well as increase the owner’s compensation deduction from $103,000 to $125,000. This is expected to generate an additional $15 million dollars that will have measurable outcomes to address priorities such as addressing homelessness, mental health and small business support.
 
The incremental revenue will stabilize and increase funding for the Joint Office of Homeless Services, adding the ability to place 240 additional families and individuals into permanent housing, as well as expand mental health caseload capacity by 50 percent. Small businesses will also benefit from additional revenue focused on supporting underrepresented business owners, including communities of color, low income residents and women, as well as an increase in the owners’ compensation deduction on the business license tax. The mayor’s proposal also includes safeguards such as an annual review of program results, as well as a stated intention not to further raise the tax for at least ten years and to reconsider the increase if the tax environment in the city substantially changes.