City Council to consider extending deferral of fees and taxes for businesses affected by COVID-19 closures

The Long Beach City Council on Tuesday will consider deferring until March 31 various fees and taxes for businesses that have been impacted by the COVID-19 pandemic.

In an effort to help during the struggling economy, the council will also consider a grant program for a total of up to $1.3 million to offset business license taxes and other fees for businesses that have closed or are restricted under city health orders.

The deferral plan, however, isn’t enough for some businesses who say they shouldn’t have to pay business license fees considering they have been forced to close in the pandemic.

In June, Elison Rd., a clothing boutique on Second Street, filed a claim for damages against the city demanding lost profits and refunds on fees flowing the mandatory closure of non-essential businesses from mid-March to mid-May. The Belmont Shore business is considering a class action lawsuit.

The city had originally planned to defer business license taxes and business-related fees, including health and fire fees, through the end of November.

In a city memo, Financial Management Director John Gross recommended extending the deferral until March 31, but said the city can’t afford to waive fees. Long Beach in 2019 generated about $24 million in taxes and fees from businesses, and while some businesses have been forced to close, the city still provides certain fee-related services in the pandemic, according to the memo. 

“The City continues to make expenditures at the normal rate for the staff and services related to the tax and fee revenue of $24 million annually,” Gross wrote. “This funding is necessary to balance the budget.”

“Most businesses can pay these relatively small taxes and fees (compared to their other fixed costs),” he added. “The pandemic is far from over and while many businesses are not at risk, others are at risk and some will fail.”

The city has some resources for business with “potentially more coming” through current and new grants. Under the new “Business License Tax and Fee Grant,” a business would be prorated for a portion of the license taxes and fees based on how long that business is restricted and impacted under health orders.

The council will discuss the issue in its regular meeting via teleconference at 5 p.m. on Tuesday.

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Kelly Puente is an award-winning general assignment and special projects reporter at the Long Beach Post. She has worked as a journalist in Long Beach since 2006, covering everything from education and crime to courts and breaking news. Kelly previously worked at the Long Beach Press-Telegram and the Orange County Register before joining the Post in 2018. She is currently pursuing a master’s degree in public policy and administration at Cal State Long Beach. Reach her at [email protected].
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