Scotts Valley to vote on potential new Business License Tax in November

SCOTTS VALLEY, Calif. (KION-TV) -- The City of Scotts Valley is announcing a proposal to modernize the city’s Business License Tax (BLT) for both employee and flat rates on the November ballot this year, a move the city is making for the first time since 1992.

The city's current tax rates include a $50 per business and $40 per employee fees, according to the City of Scotts Valley. They say that there are currently 1,192 licensed businesses in Scotts Valley and each range from $90 to $13,930 per license.

The city's issues with the current BLT structure are "confusing post-Covid with increased Work-from-Home and hybrid work models [as well as] unequitable with labor heavy small businesses paying more than large businesses."

The BLT review evaluation criteria hinged on six different pillars that included comparison between other peer agencies in the region; current business structures; a fair pay scale between businesses; tax revenue stability; as well as simplicity for both the business and the city.

There are two potential options up for voters come November 5. According to the city, "Option A" proposes an adjusted employee-based model with a flat tax of at least $125 as well as a $100-per-employee rate. This option would be evaluated annually.

"Option B" includes a tiered rate approach based off of amounts listed on a business' annual gross receipts with a minimum tax of $150. The city says that all but the storage facility industry would pay anywhere from $.50 to $1,000 in these taxes.

"This new tax will account for inflation and will add an additional $550,000 per year to the city’s revenue," says the City of Scotts Valley. The city's current annual revenue is $350,000, according to the city.

If voters approve the measure, the City of Scotts Valley would implement the new tax in May 2025.