Ventura Considers Lowering Fees for Small Businesses : Economy: Operators of ‘mom-and-pop’ stores applaud the plan. Larger companies face increased levies.
In an effort to make Ventura’s annual business license tax more equitable, city officials are considering cutting fees for small businesses while forcing larger businesses to pay more.
Under the proposal, retail stores that gross $10,000 would have to pay an annual tax of $27--about $8 less than the current rate. But similar businesses that gross $10 million would have to pay $2,025, up substantially from the current tax of $475.
“We’re just spreading it out more so the mom-and-pop places aren’t carrying such a heavy load,” said Councilwoman Cathy Bean.
Although some small business owners have applauded the plan, operators of larger businesses complain that they would be forced to carry too big a burden.
According to city officials, the businesses that will be hit with the largest tax increase include car dealerships, department stores and utility companies, especially Southern California Edison. The Ventura-area office of the electric company could end up paying about $30,000 annually, said Mel Sheeler, president of a citizens committee appointed by the council to look at the issue.
“We’re talking about a monumental increase,” Sheeler said. The cost, he said, would end up coming out of the pockets of customers.
“Times are tough,” said Bernie Hoffinger, general sales manager for Harbor Chrysler Plymouth Sales Inc. “If my business license goes up to $5,000, that becomes a fixed expense. It all adds up. They all want to put it on the big guy.”
The City Council is scheduled to take public testimony on the issue at its meeting Monday night. However, at the urging of the citizens committee, the council is expected to delay discussion until its June 15 meeting, giving the city’s finance committee more time to study the concerns of the large businesses.
“There is still a lot of work that needs to be done on this,” Sheeler said. “We need to decide if we should put a cap on the tax. Maybe we should raise the minimums to bring down the maximums.”
City officials said they do not want to hurt big business; they simply want to make sure that the tax rate schedule is fair.
“The current ordinance is regressive, and small businesses are paying an unequal share,” said Everett Millais, director of community development. “The goal is to make our ordinance consistent with state law and to make it more equitable. The rate schedule should reflect profitability.”
According to state law, cities must levy the license taxes according to gross receipts, Millais said.
According to the proposal, formulated by a city-hired consulting firm, retail stores would pay $25 plus 20 cents per $1,000 of gross receipts. Other businesses--including doctors’ offices, utility companies and manufacturers--would pay $25 plus 40 cents per $1,000 of receipts.
There are 9,530 businesses licensed by the city of Ventura, and nearly $770,000 is generated each year in taxes. Millais said the total revenue should not change with the new tax rate.
Councilman Tom Buford said he believes that the tax revision “makes some sense.”
But, he said, “if someone convinces us that there is a better alternative, I’d assume we’d take it.”
Bobby Morgan, owner of a secondhand store on Main Street, said she is pleased that the city wants to give small businesses some relief. But she said she is not celebrating yet.
“I’d have to see it to believe it,” Morgan said. “If I see it, I’ll be the first one to say, ‘Thank you, Ventura.’ ”
Ventura Business License Tax Comparison
Proposed Tax Retail, Wholesale Others ($25+$.20 ($25+$.40 Gross receipts Current tax per $1,000) per $1,000) $10,000 $35 $27 $29 $20,000 $35 $29 $33 $30,000 $45 $31 $37 $40,000 $45 $33 $41 $50,000 $45 $35 $45 $60,000 $60 $37 $49 $70,000 $60 $39 $53 $80,000 $75 $41 $57 $90,000 $75 $43 $61 $100,000 $75 $45 $65 $200,000 $125 $65 $105 $300,000 $150 $85 $145 $400,000 $175 $105 $185 $500,000 $200 $125 $225 $1 million $250 $225 $425 $5 million $350 $1,025 $2,025 $10 million $475 $2,025 $4,025
