This is an archive of a past election. See http://www.smartvoter.org/ca/la/ for current information. |
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Measure K Business License Tax Increase City of Vernon Ordinance - Majority Approval Required
See Also:
Index of all Measures |
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Information shown below: Impartial Analysis | Arguments | | ||||
Shall an ordinance be adopted to increase the rates of the City's existing business license taxes and to modify the method for calculating such taxes?
The City of Vernon currently imposes business license taxes on most business entities and persons who conduct business in the City. Most businesses pay an annual tax, per location, based on the number of employees that work for the business at that location. Warehousing businesses pay a tax for each location based on the square footage of building space used at that location for warehousing. Certain other businesses, primarily itinerant businesses or businesses that operate from vehicles (such as taxicabs and food trucks), pay a flat rate. Measure K proposes a tax ordinance that increases each of the rates of the business license taxes. For example, the annual tax on a business location with 2 to 10 employees, if taxed on a number-of-employees basis, would increase from $230 to $1,150. The annual tax on a business location with 1,001 to 1,100 employees, if taxed on a number-of-employees basis, would increase from $3,140 to $15,700. For businesses taxed on a square foot basis, the tax for a main location (currently $240 for the fi rst 5,000 square feet, plus 4.2 cents per additional square foot up to a maximum square footage tax of $2,390), would increase to $1,200 for the first 5,000 square feet, plus 21 cents per additional square foot, up to a maximum square footage tax of $11,950. Each rate would automatically further increase, annually, based on the change in the Consumer Price Index, according to a formula specifi ed in the ordinance. A complete list of tax rates is included in the tax ordinance. Measure K would also change how taxes are calculated and collected. With respect to the warehousing tax, it would eliminate a distinction made between square footage at main and "offsite" locations, applying the same rate structure to each location. Contractors could opt to pay their taxes quarterly rather than annually. Measure K would also clarify the methodology for taxing businesses that conduct both warehousing and some other business at a single site by requiring that such businesses pay both a tax based on square footage (for warehousing operations), and a tax based on employees (for other operations), and that square footage and employees be apportioned for tax purposes among the two types of businesses. It would formalize the City's existing practice of not treating the leasing of real property by its owner as a business and make several other miscellaneous clarifi cations. Proceeds of the business license tax are, and would continue to be, placed in the City's general fund and available for any municipal purpose. Business license taxes collected by the City for 2011 totaled $1.3 million. If Measure K is approved, City staff estimates that the business license tax will yield $5.7 million annually. The new rates, if approved, would go into effect January 1, 2014.
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Arguments For Measure K |
Vernon is a great place to live. Among the fi ve of us, we
have a combined total of 140 years residing here; raising
our families and supporting our community.
The City of Vernon has one of the best Police Departments in all of Southern California: our Fire Department is second to none and, Vernon Light and Power has one of the best customer service ratings in the industry. We can all feel safe and secure knowing that our Fire, Police and Utility Departments are located right here in Vernon and are on duty to serve us 24 hours a day, seven days a week.. Providing these outstanding governmental services costs money. Fortunately we have about 1800 business which call Vernon home and they pay for more than 99% of the cost of running the City, as they utilize more than 99% of the services provided. For many years, Vernon's General Fund has spent more than it takes in and we have been working tirelessly to reduce costs without any loss of service to the residents or businesses. In addition, we have been working with the Vernon business community to increase revenues. After months and months of working together, we have fi nally found the answer. The solution to our General Fund deficit is contained in Measures K, L & M, but we need your help. Measure K, for example, raises the City' Business License Tax to a level similar to other cities and is expected to generate about $4.5 million in new revenue each year. 100% of this tax will be paid by businesses operating in Vernon. But while Vernon businesses will pay the tax, State law requires that the residents ratify the ordinance. That is why the fi ve of us are asking each resident to please VOTE YES ON MEASURE K.
s/ William J. Davis, Mayor, City of Vernon
(No arguments against Measure K were submitted) |