Monterey’s new business license tax structure kicks in – California News

Monterey’s new business license tax structure kicks in – California News

Monterey >> Monterey recently changed the way it determines charges for business licenses and the revision has created some notable differences in the amount some Monterey business owners pay.

Monterey Finance Director Julie Porter noted that while some business owners will end up paying more, others will see amounts similar to previous years, while still others will pay less.

In November voters approved the ballot measure amending the business license tax fee structure. The updated revised tax eliminates the classification of businesses and charges all businesses the same rates based on gross receipts. That’s a change from the previous fee structure that prior to April 1, charged one of 14 different tax rates based on the type of business, as defined by city code.

Now, businesses with gross receipts of $25,000 or less per calendar year, pay $26 and businesses with gross receipts in excess of $25,000 per year pay $26 plus 0.15 percent of their gross receipts. Previously, several individual businesses each earning $500,000 in gross receipts annually, paid between the tax rates of $642 and $1,197 (based upon their classification). Now, they will all pay $738.

“The previous city code was very complex and very outdated as far as business license structure goes,” said Porter, noting the previous 14 different tax rates and 170 different types of business classifications. “Now, the current structure is fixed and the same for every business.”

The overall intent, according to Porter, was not only for the total city tax that’s collected to stay close to the same but to make the system easier and in line with what many…

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