Right now the City taxes businesses in a backwards way. It requires businesses to pay taxes on “gross receipts” or every dollar that comes in to a business – whether it is income or not. That isn’t the way we pay personal federal or state income taxes, we only pay on actual income to prevent double taxation. So for contractors that pay sub-contractors, for film productions who contract out operations, or for any other business that has expenses that are passed through, this is an unfair method of taxation.
The City has to reform and replace the business tax through a method that reflects the realities in the business community, and conforms with state law. This may require wholesale revision to the City's business tax, but the end result will be a more equitable business tax, leading to the return of so many businesses that we’ve lost to nearby cities in previous years.