Richmond businesses bracing for big tax bill in July

Measure U was passed by voters in 2020 and will raise taxes for Richmond businesses more than 100-fold. With the first tax bill due, many businesses are considering relocation outside Richmond.

News story from KPIX:
https://www.cbsnews.com/sanfrancisco/video/richmond-businesses-bracing-for-big-tax-bill-in-july-due-to-voter-approved-measure-u/

Revenue Ballot Measure

City Council placed a measure on the November 3, 2020, ballot that was approved by the voters, which changes the Business Tax calculation methodology to be based on gross receipts in the City of Richmond instead of the number of employees. The new model would calculate the business tax based on the amount of gross receipts (total amount of money received in connection with any sale) in Richmond by the business and then charge a specific percentage based on the type of business and the amount of revenue generated. The tax to businesses is based on a range from 0.075% to 1.395% of gross receipts.

Previously, the business tax in most cases was based on the number of employees. The base rate was $234.10 per year and increases per employee a business has working in Richmond (the first 25 employees are charged at $46.80 per employee, and employees above 25 are charged at a rate of $40.10 per employee). The cannabis industry (at 5%) and movie theaters (at 0.3% for revenues over $20,000) are currently based on gross receipts.

Implementation Date

Council approved a change to the implementation date from July 1, 2021, to January 1, 2022, in accordance with Section 7.04.680(B). The staff has met on several occasions with a coalition of Richmond businesses and presented at both Richmond Neighborhood Coordinating Council (RNCC) and Economic Development Commission (EDC).