Sacramento city leaders look at raising taxes on businesses: "It's long overdue"
SACRAMENTO — Sacramento city leaders are looking at raising taxes on businesses. The city council says it's necessary to help fund more police officers, but with rising prices and inflation, business owners fear it will take a bite out of their bottom lines.
It was a festive Halloween at this week's city council meeting, but fun costumes quickly gave way to a serious topic.
"It's necessary and I think it's long overdue," Councilmember Karina Talamantes said during the meeting.
She's referring to a business tax modernization, which is something that hasn't been touched since 1991.
Currently, the most a business pays in taxes, regardless of how big or small they are, is $5,000 annually. A new tax would raise that cap to as much as $125,000 annually.
The city says the new tax wouldn't affect businesses making less than $12.5 million a year.
"What struck me as I came into this role a year ago is learning that a company like Walmart pays $5,000 a year in taxes to the city," Councilmember Caity Maple said.
That drew some concern from the Sacramento Metro Chamber and the Downtown Sacramento Partnership.
"We fully understand the desire to update business operations taxes for inflation, but this proposal goes much further," said Jack Blattner, the director of public policy and government affairs of the metro chamber.
It also drew some debate.
"I hear our businesses and I say there is transparency and I say it is a derelict of duty that we as a city have not considered this since 1991," Councilmember Lisa Kaplan said.
"It's the downtown partnership and the same businesses that are asking us to increase our law enforcement, provide more protection – and I think it's important – and to then make a decision about balance here," Sacramento Mayor Darrell Steinberg said.
There is also praise from the cannabis community, which already pays a separate business tax on top of state excise taxes.
"The taxation on alcohol hasn't even been touched like cannabis," Mike Snell said. "Make it make sense, people."
In the end, the vote to move the tax proposal forward was approved, even though what comes next could be a bigger fight.
"There's a tension here between what we're being asked to do and the fact that we don't have the money to do it," Councilmember Katie Valenzuela said.
What comes next is an official vote in two weeks. If approved again, it will be on the ballot for a public vote in March of next year.