Business License Panel Sets Principles for New Year

The city's youngest advisory panel, the Business License Tax Committee, adopted a list of guiding principles in its , taking an early step toward analyzing the city's business license tax structure before later proposing changes.

"The committee wants to line the field and put up the goalposts so we know the boundaries for what we're trying to do," City Councilman Kit Bobko told Patch. He serves on the committee, and helped .

"We came up with seven guiding principles that will give us the framework," Bobko said. "What happens when you don't have a framework is you always circle back on whatever fundamental disagreements the group has."

The panel decided on the following seven guiding principles in its meeting Dec. 20:

1. Create a simple tax structure: "The code should be easy to understand… equitable, fair," said committee member Tom Brodie at the meeting. Mayor Peter Tucker agreed. "Our tax laws are way too many pages," he said.
2. The Business License Tax should be competitive in the market area: "Being competitive is very important but we want to be competitive in our business license" with neighboring Beach Cities, said City Manager Steve Burrell.
3. Cap all Business License Taxes at a reasonable level: If there is a limit to how much the city can tax businesses, "the business can plan for that," said committee member Andrea Jacobsson. Tucker said that he wanted to see some numbers first, but agreed.
4. Universal participation: "The sales tax code in the state of California is discriminatory in several ways," Brodie said, adding that certain businesses in Hermosa don't pay sales tax, such as some financial institutions, health services and even coffee shops. "We all have to contribute one way or the other," he said.
5. Provide sales tax credits: Jacobsson suggested that the panel study ways in which the city can provide a tax credit to businesses that generate a certain amount of revenue. "It encourages businesses who bring in sales tax revenue to want to locate in Hermosa Beach and in the long run that generates much more revenue for the city," she said.
6. The Business License Tax should be user friendly: "I'd like to set up some sort of format to encourage businesses to come in here... and make it more attractive for businesses to open up in the city of Hermosa," said committee member Brittny Burford.
7. The Business License Tax should be unconventional/flexible: "We need to address the business license tax review as though this is a brand new city and business tax is a means to fund city services," Tucker said. "We have to look at [and] throw away all our old premonitions about why the taxes are the way they are and come up with new ideas… kind of reinvent the wheel, so to speak."

Now that the principles have been established, the group will discuss forming subcommittees to tackle individual objectives. For example, an outreach subcommittee could share the public's thoughts with the panel before any decisions are made, Bobko said.

"But the full committee hasn't decided that yet," he added. "We'll do that at the next meeting."

The next committee meeting will be Thursday, Jan. 6, at 7 p.m. in City Council chambers.