SCOTTS VALLEY, Calif. (KION-TV) — The City of Scotts Valley will put a proposal to modernize the city’s Business License Tax (BLT) on the ballot this November to include both employee and flat-rate rates, a step the city is taking for the first time since 1992.
The city’s current tax rates include fees of $50 per business and $40 per employee, according to the City of Scotts Valley. They say there are currently 1,192 licensed businesses in Scotts Valley and fees range from $90 to $13,930 per license.
The city’s problems with the current BLT structure are “confusing in the post-Covid era with increased home working and hybrid work models (and) unfair, as labor-intensive small businesses pay more than large companies.”
The BLT’s evaluation criteria were based on six different pillars, including a comparison with other comparable agencies in the region, current business structures, fair payment between companies, stability of tax revenues and simplicity for both the company and the city.
Two possible options will be available to voters on November 5. According to the city, Option A proposes a modified employee-based model with a flat tax of at least $125 and a rate of $100 per employee. This option would be evaluated annually.
“Option B” involves a sliding tax rate based on a business’s annual gross receipts, with a minimum tax of $150. The city says everyone except the warehouse industry would pay these taxes between $0.50 and $1,000.
“This new tax will account for inflation and increase the city’s revenue by an additional $550,000 per year,” says the city of Scotts Valley. The city’s current annual revenue is $350,000, according to the company.
If voters approve the measure, the city of Scotts Valley would implement the new tax in May 2025.
