HomeMy WebLinkAboutCOW 2022-11-14 Item 4C - Handout Distributed at Meeting - Business License & Business and Occupation Tax AnalysisBusiness License / B&O
Analysis
A high-level analysis of the impacts of doubling the business licenses fee
vs implementing a B&O Tax.
Rates
B&O Rates
Annual cost per $1 Million
Category B&O Gross Revenue
Manufacturing 0.00085 $850
Retail 0.00050 $500
Service & Other Activities 0.00085 $850
Wholesale 0.00085 $850
Current Business License Rates
Status Amount
Full Time $112 Per Person
Part Time $56 Per Person
Outside Contractor $100 Exempt if gross revenue is less than $2,000
Anticipated Additional Revenue
B&O Tax, $3,100,000 ,
Bus Licenses Fees,
$3,223,491
Both options are projected to generate the additional reccurring $3 million revenue to fully fund the City's Safety
Program.
B&O Tax — $3.1. Million Business License $3.2 Million
1111 Business in Tukwila,
2,325
Nonresidents 2,683
111
Number of Tukwila Business Licenses
Business license in Tukwila 2,325 (53.6%)
Nonresidents business license 2,683 (46.4%)
Total number of businesses license = 5,008
Business License Revenue
Business in Tukwila $2,886,540 89.5%
Nonresidents $336,951. 10.5%
Total Business Licenses Revenue 3,223,491 100,0%
Number of Businesses Impacted
Impacts
Number of Businesses
impacted by double
Business Licenses, 5,008
Number of Businesses Impacted by B&O,
691
Businesses impacted by B&O Tax — 691 (13.8%)
Businesses impacted by doubling Businesses License fees - 5,008 (100%)
B&O Impacts
• Median gross revenue of businesses with gross revenues greater than $750,000 = $2,282,000
• Number of businesses with gross revenue greater than $750,000 = 691
• % of businesses with gross revenues greater than $750,000 = 13.8%
• Median gross revenue of businesses with gross revenues Tess than $750,000 = $30,676
• Number of businesses with gross revenue Tess than $750,000 = 4,317
• % of businesses with gross revenues Tess than $750,000 = 86.2%
Additional Impacts
• Number of businesses that will pay more by doubling Business License fees =
5,005.
• Number of businesses who are impacted by a B&O Tax that will pay more with
B&O Tax implementation versus doubling Business License Fees = 306.
• Number of businesses who impacted by a B&O Tax that will pay less with B&O Tax
implementation versus doubling Business License Fees = 376.
Equity Vs Equality
• Doubling the Business License fees for all businesses is an example of
applying a business decision based on equality.
• Implementing a B&O Tax with a gross revenue threshold greater than
$750,000 is an example of applying a business decision based on
equity.