Milpitas still taxes businesses the way it did in 1976: by industry category and headcount. Measure K on the Nov. 3 ballot asks voters to replace that formula with one built on gross receipts — so the city says small firms stop paying more per employee than big ones.

What the new tax would look like

According to the city attorney's impartial analysis as summarized by California Choices and the city's Measure K page, every business would pay an annual flat rate between $25 and $400 based on its gross-receipts tier. Firms with more than $700,000 in annual gross receipts would also pay between 0.025% and 0.035% (25 to 35 cents per $1,000) on the portion of receipts in the top tiers. The flat rate would rise with inflation. Nonprofits and some other categories would remain exempt. If voters approve it, the new rules start Jan. 1, 2028.

The official ballot question pegs the revenue at about $3 million a year for the general fund — neighborhood safety and cleanliness, storm drains, emergency medical response, and other unrestricted city uses — until voters end it. Because it is a general tax, it needs a simple majority, not two-thirds.

Why the council put it on the ballot

The City Council voted unanimously on Aug. 3, 2026, to place Measure K on the municipal election ballot. The city's FAQ says smaller businesses can pay over 70 times more per employee than larger corporations under the current ordinance. Measure K applies only to businesses; residents who are not business owners would not see a new tax line on a home bill.

Yes, no, and the filed arguments

  • Yes: Replace the 1976 per-employee structure with the flat-rate-plus-gross-receipts schedule.
  • No: Keep the existing business license tax as it stands.

The argument in favor, signed by labor and small-business names including Local 1699 president Mario Bena and several shop owners, says the rewrite makes large firms pay a fairer share without taxing homeowners. The argument against, signed by Elizabeth C. Brierly of the Silicon Valley Taxpayers Association, warns that businesses pass taxes to customers or may leave for cheaper cities. Full text and rebuttals are in the Santa Clara County voter guide. Voters will also choose a mayor and two councilmembers on the same ballot.