Under the City of Oakland's current business tax code, the City imposes business taxes on the holders of business licenses at a fixed rate for each tax class based on the gross receipts or gross payroll of the business. This measure creates a progressive rate structure for business taxes that has the effect of changing Oakland's business tax burden such that companies with lower gross receipts will pay a reduced percentage of total business taxes and companies with higher gross receipts will pay a greater percentage of total business taxes. This measure also would impose a minimum business tax of $60 on most businesses regardless of their gross receipts or gross payroll.
This measure will not change residential rental business tax rates and will not alter Cannabis Tax rates, and the City Council will retain its existing authority to lower Cannabis Tax rates following a public hearing. This measure does not authorize the City Council to amend other business tax rates without voter approval.
This measure updates certain tax classes and tax terminology in the City's business tax code to more closely align them with the classes and terminology used in state and federal tax codes. The measure also ensures that the letters the City uses to classify various types of businesses correspond to the letters used in the tax-rate table in the Oakland Municipal Code, which may make it easier to find the relevant tax rates for each classification of business.
Economic consultants retained by the City's Finance Department estimate that this measure will generate approximately $20.9 million in additional annual revenue, the proceeds of which will be deposited into the City's General Fund. This measure does not have any impact on any other types of taxes other than business license taxes. This measure was placed on the ballot by the Oakland City Council.
Source: City Attorney's Impartial Analysis of Measure T