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File Number: 13-341 <br />guaranteed to spur new business activity. For most businesses the annual San Leandro <br />business license tax is a flat fee of $117.00 plus a per-employee charge ranging from <br />$35-$87, depending on the business type. These amounts compare favorably to most other <br />cities in the region. At these rates, the tax does not represent a significant operating expense <br />for most businesses. Staff is not aware of any businesses that have cited the Business <br />License Tax as a factor that caused them to locate outside of San Leandro . <br />The Business License Tax Holiday might also be seen as unfair by businesses that were not <br />offered a similar benefit when they began operations in San Leandro , particularly those that <br />opened just prior to the initiation of the program. <br />FINANCIAL IMPACT <br />The loss of General Fund revenue from a Business License Tax Holiday would depend on the <br />number of new businesses opening or moving to San Leandro during the program’s <br />timeframe. Based on data from 2012-13, it is estimated that a 12-month holiday could result in <br />a loss of between $60,000 and $80,000 in Business License Tax revenue . In 2012-13 <br />approximately 340 new businesses opened in San Leandro, employing approximately 850 <br />people. <br />Over time, the program could also increase General Fund revenues in other areas by leading <br />to increases in property and sales taxes. The amount of these increases is very difficult to <br />estimate and will be a factor of the number of new businesses that would not have located in <br />San Leandro absent the Business License Tax Holiday . <br />MEASUREMENT OF SUCCESS <br />If enacted, staff would track the number of businesses that benefitted from the Business <br />License Tax Holiday. This data would be compared against other recent years to determine <br />whether or not the Program spurred new business activity. Although it is difficult to control for <br />larger changes in the regional economy, it would be possible to generate rough estimates of <br />the program impacts. Measurable data would include number of new businesses and number <br />of employees at those businesses. It may also be possible to generate rough estimates of <br />sales tax generated by benefitting businesses. <br />PROGRAM PARAMETERS <br />If the City Council elects to approve a Business License Tax Holiday , staff recommends the <br />following program parameters: <br />Program Dates: September 1, 2013 - August 31, 2014. <br />Eligible Businesses: All businesses that are new to San Leandro and physically located <br />inside the City, excluding residential and commercial rental property owners and waste <br />disposal sites. Businesses that operated previously in San Leandro that need new licenses <br />due to changes in name, ownership, or business type would not be eligible. <br />No Amnesty: All fines and back payments related to failure to pay the Business License Tax <br />prior to September 1, 2013 would still apply. <br />Zoning Approval Fee: All new businesses would still be required to pay a one-time $104 <br />Page 3 City of San Leandro Printed on 6/25/2013