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File Number: 14-276 <br />1/2011 - 12/2011 (12 months)420 1,150 <br />Conclusions <br />For most businesses the annual San Leandro business license tax is a base fee of $121.60 <br />plus a per-employee charge ranging from $36.50-$91.40, depending on the business type. <br />These amounts compare favorably to most other cities in the region. At these rates, the tax <br />does not represent a significant operating expense for most businesses and it is not likely, on <br />its own, to influence business location decisions. Moreover, it is difficult to pinpoint any one <br />factor as the sole reason a business would open in a given location. <br />The greatest benefit from the Business License Tax Holiday was not that it induced new <br />businesses to locate in San Leandro, but rather that it reinforced San Leandro’s reputation as <br />a great place to do business. Combined with a flurry of other positive developments, the <br />positive press coverage garnered by the introduction of the tax holiday was beneficial. <br />Recommended Extension <br />The Business License Tax Holiday began on September 1, 2013 and, by resolution, runs for a <br />period of one year. Absent action by the City Council, new businesses that apply for a <br />business license after September 1 would need to pay for the remainder of 2014, including <br />the zoning compliance fee. By extending the program through the end of the calendar year, <br />the City will ensure that new businesses will not pay any fees until January 1, 2015. This may <br />provide a financial incentive for additional new businesses and eliminate any confusion that <br />may have resulted from the program ending in the middle of the year. <br />As noted above, the Business License Tax Holiday is forecast to cost the City approximately <br />$152,000 through August 31, 2014. Staff estimates that the extension will result in an <br />additional $38,000 in foregone revenue for a grand total over 16 months of $190,000 lost <br />revenues. <br />Previous Actions <br />On July 15, 2013, the City Council authorized the Business License Holiday to run from <br />September 1, 2013 through August 31, 2014. <br />Fiscal Impacts <br />Extending the Business License Tax Holiday through December 31, 2014 is expected to result <br />in additional lost revenue of $38,000 to the City’s General Fund, totaling $190,000 over 16 <br />months (September 1, 2013 through December 31, 2014). <br />PREPARED BY: Jeff Kay, Business Development Manager, Community Development <br />Department <br />Page 3 City of San Leandro Printed on 7/2/2014