Concord's Measure O Would Swap Tiered Business Tax for One Flat Rate

Concord voters will decide on Nov. 3 whether to overhaul the way the city taxes businesses, a change city leaders say fixes a system that charges small shops more, proportionally, than large corporations.

Measure O would replace Concord's tiered gross receipts business license tax with a single rate of 0.1%, or $1 for every $1,000 in gross receipts. Under the current schedule, which has stayed largely the same for about 40 years, rates fall from 0.1% to as low as 0.03% as a business's receipts grow, according to the city attorney's impartial analysis. The city has said a business with $25,000 in annual receipts pays an effective rate more than double that of one with $15 million, Bay City News reported.

What changes, and what doesn't

The measure would raise about $2.9 million a year. It would also widen a small-business exemption: today only student and senior businesses earning under $3,600 are exempt, and Measure O would exempt any business with $5,000 or less in gross receipts. Rates for manufacturers, contractors, specified professions and trades, apartments, hotels and motels would not change.

Other pieces include inflation adjustments to the $25 minimum tax, interest of 1.5% a month on late payments, and clearer due dates. The tax has no end date and would stay until voters repeal it. It is a general tax, so the money goes into the general fund and needs only a simple majority. The city's independent auditors would report each year on how $2.9 million of the new revenue is spent, with review by the existing Measure V oversight committee.

The arguments

The City Council voted 5-0 to place the measure on the ballot. Supporters, including several local business owners, say it would help pay for pothole repair, 911 response, parks and senior and youth programs. City staff cite an infrastructure funding shortfall of at least $24.7 million a year, much of it for street maintenance.

Opponents, led by the Contra Costa Taxpayers Association, argue a gross receipts tax ignores profit margins and could hit grocery stores and gas stations hardest, and that businesses will pass the cost on to shoppers. They also note that nothing legally requires the money to go to roads or public safety, and that voters already face a regional transit sales tax on the same ballot.