HdLCompanies completed an analysis of the City of Chico’s business license tax and applicable ordinances.
The pandemic has made it difficult for cites to increase or even maintain revenue. The City of Chico took this opportunity to review and propose changes to several existing taxation methods. They discovered their business license tax ordinance was written in and had not been updated since the 1970s.
HdL’s Director of Professional Services, Joshua Davis, presented alternative possibilities and explained city revenues have steadily flat lined for the past eight years. “For the most part revenues remain flat year to year and business tax revenue is not keeping up with current business trends. About 75% of local businesses generating this revenue are commercial based, while those in residential areas are 16% of revenue, and 6% are based outside the city," Davis said.
The City Council also reviewed cannabis and sales tax measures. Davis compared Chico to local jurisdictions and found the City to be near the top half for population and near the bottom for overall revenue. "This puts them at the bottom for per capita revenue," he said. Compared to other local jurisdictions, "Chico is near the top for population and near the bottom for overall revenue, therefore at the bottom for per capita revenue," he said. HdL presented different strategies for an overall increase, such as moving to a gross receipts based tax to create as much equity as possible.
Read the full story HERE.
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