Long Beach has an interesting approach to business that — unquestionably — raises eyebrows. It is the reason the Council of Business Associations, which is the larger collection of various business associations throughout Long Beach, created their business survey in tandem with the City: in order to better transition businesses into the culture and economy of Long Beach.
One of the trickiest bits being that the City charges a business license tax — common if it weren’t for the fact that they require independent contractors such as real estate agents to also obtain a license. Further, the City enacted a 16% surcharge in 1991 on business licenses for capital projects, thereby adding an extra cost though it appears folded in on license’s cost as if it weren’t additional. It is in this vein that Councilmember Gerrie Schipske is claiming she is continuing her advocacy of small businesses: she simply wants to eradicate the tax.
“Real estate brokers under which these agents work must also pay for a separate business license,” Schipske noted in her June 12 council meeting agenda item. “Both real estate agents and brokers also generate the ‘real estate property transfer tax’ which results in additional revenue to the City. There are a number of other types of independent contractors that are also struggling to stay in business as they deal with this difficult economy.”
Furthermore, Schipske points out that “the current economic market remains depressed — particularly in real estate — which is partially due to the mortgage crisis and the number of homes now ‘underwater,’ making it extremely difficult for the independent contractor to survive.”
Councilmember Gary DeLong voiced his support of the initiative, telling the Long Beach Post that he “strongly support[s] providing tax relief for local small businesses. In fact, I [previously] submitted an agenda item to modify the method Long Beach uses to calculate business license fees for realtors. This item, which is co-sponsored by Vice-Mayor Suja Lowenthal and Councilmembers Robert Garcia and Steve Neal, is scheduled for the June 19 calendar and will reduce business license fees.”
If passed, her agenda item would request the City Manager to report to the City Council within 90 days on the feasibility of waiving the business license tax and/or the 16% surcharge being removed from business licenses for independent contractors for at least FY 2013.
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