Businesses in El Segundo got an unexpected Christmas gift Tuesday when the City Council approved a permanent 5% reduction in the business license tax.
This is the second year the city has reduced the tax to help existing businesses and to attract new businesses. The City Council decided last year to reduce the tax by 10% for one year. This week, the council extended the tax break and increased it an additional 5%.
Councilman Liam Weston said the city has lost about 40,000 jobs since 1990 because of downsizing in the aerospace industry. But in the last two years, a new attitude toward business has helped the city make a turnaround.
"There was a period of hemorrhaging," Weston said. "This year, with the aggressive pro-business and lower-tax attitude of the City Council, we've been able to bring back into the city 4,200 jobs."
Chamber of Commerce President Bob Jensen said the business community did not lobby for the tax break but appreciates the decision.
Last year, the annual base fee charged to every business was reduced from $107 to $96. An additional tax for businesses with more than five employees was lowered from $131 per employee to $118. With the further reductions, businesses now pay a base fee of $91 and firms with 10 or more employees pay an additional $112 per employee.