City Council Proposes Major Overhaul of Business License Tax

During a recent city council meeting, officials discussed a proposed resolution to place the Upland Public Safety Streets City Services measure on the November 5, 2024 ballot. This measure aims to modernize the city's business license tax, which has not been updated in nearly three decades.

The current business license tax structure, established over 50 years ago, has been criticized for its outdated rates and low cap. Currently, businesses pay a maximum of $864 regardless of their size, leading to significant disparities in tax burdens. For instance, a small business with $100,000 in gross receipts pays a tax rate 163 times higher than a business with $100 million in gross receipts.

The proposed revisions include reducing the minimum tax from $54 to $50, increasing the gross receipts threshold from $20,000 to $100,000 before additional taxes apply, and raising the cap on business license taxes from $864 to $29,500. These changes aim to generate additional revenue for the general fund, which supports essential services like public safety and infrastructure maintenance.

The measure also seeks to streamline the municipal code by eliminating outdated fees and classifications, making the tax calculation simpler for businesses. Different tax rates would be established based on business types, with retail businesses facing the lowest rates and contractors the highest.

City officials estimate that the modernization could generate between $2.5 million and $3.5 million annually, significantly increasing the tax contribution from larger businesses while reducing the burden on smaller ones. Over 60% of businesses are expected to see a decrease in their total business license tax payments under the new structure.

The council is set to vote on the adoption of three resolutions related to this measure, which could reshape the city's approach to business taxation and funding for local services.