City Revises Business Taxes; Some Object

The City Council has approved a series of revisions to its controversial business license tax over the objections of some business owners who said the fees are unfair and will drive them out of town.

“If you keep this tax, I’m not going to stay in Westminster,” said Wayne Schell, a distributor of aerospace parts and equipment. “I will move.”

Last year, the council voted to replace the city’s flat fee of $50 with a tax based on gross receipts. On Tuesday, the council amended the fees to give a break to medium-sized businesses and wholesalers.

But Schell said that because his distribution business operates on high gross and lower profit margins than a retailer, he is being unfairly taxed.

Even though the new fee structure lowers some taxes, those fees are still lower in other cities, he said.

“Gross sales is not the way to do this, it should be on the number of employees,” Schell said.

Under the revised tax approved this week, business owners will now pay 0.05% of their gross receipts, rather than the 0.1% implemented a year ago.

The revisions also create more brackets in the tax system, so businesses making $500,001 will no longer be paying the same taxes as those making $1 million, city officials said.

The changes also place a cap of $2,500 for large businesses. Wholesalers will pay the tax based on the number of employees rather than gross receipts.

Councilwoman Charmayne S. Bohman said that business owners who object to the tax represent a small minority in the city. The tax is supported by the Westminster Chamber of Commerce and the Vietnamese Chamber of Commerce.

“A wide range of people who I’ve talked to think it’s fair,” Bohman said. “The data shows we’re competitive with other Orange County cities.”

Bohman added that the city can continue to look at businesses on a case-by-case basis if owners think they are being charged unreasonably high fees.