Question 2: Please comment on the Oakland City Business Tax and how it has been recently applied?

Pat Kernighan

Oakland imposes a tax on all businesses located in Oakland which conduct business in Oakland, based on a percentage of gross receipts, the percentage differing according the industry. (Almost every other city has such a tax.) Taxes are a part of life, but it is imperative that they be administered fairly. This last year, the City Administrator (without notice to the City Council) started an enforcement practice which was perceived as unfair and punitive by many home businesses which did not know that they were covered by Oakland's Business License tax requirement. Many very small businesses, including consultants, artists, music teachers, and writers, received a collection letter demanding that they pay 3 years of back taxes including penalties. This letter was very offensive to people who had no idea that they were liable for the tax in the first place. A much better solution would have been to offer an amnesty for back taxes and penalties to all those subject to the business tax as long as the businesses registered and began paying the tax for the current year.

Unfortunately, because of the way it was handled, the City Attorney advised that an amnesty could not work after the fact. The entire matter was a public relations disaster for Oakland and alienated many good citizens. If I am elected Councilmember I will make clear to the City administration that they must be more aware of fairness and the likely impact on public relations of all their actions. They cannot blindly pursue revenue without considering the overall impact on our citizens.

Paul Garrison

The City of Oakland is committed to maintaining reasonable taxes and fees.  Pursuant to Title 5, Chapter 5.04 of the Oakland Municipal Code Oakland business tax applies to both commercial businesses and residential rentals.  Failure to comply with the business tax requirements may result in the imposition of penalties and interests as well as a lien and special assessment placed against the property.

Todd Plate

Oakland ’s business tax rates are in line with San Francisco and Berkeley as some of the highest in the bay area. That is not necessarily a bad thing, but I think if we are truly committed to bringing in new small businesses, as we need to, we should be looking to make it easier for new and innovative businesses to find a home in Oakland . For example, creating a tax exemption for businesses with less than $2,500 in computed tax or less than $100,000 in gross receipts could help Oakland see an improvement in long term business growth.

Additionally, with Oakland ’s Enterprise Zones’ financial incentives, such as the Hiring Tax Credit and Sales and Use Tax Credit, as well as other financial incentives, I believe we have the right tools in place to market Oakland as great place for new businesses to set up shop. The power of Oakland ’s dollar is a strong force and should be used to generate new and expanding businesses.

Shirley Gee

There are too many taxes levied in the City of Oakland and this in turn creates a "business unfriendly" environment and a disincentive for small businesses to locate here or stay here over time. Any monetary programs that strangles small, local business enterpreneurship or makes it difficult for businesses to thrive and grow should be either repealed or modified with higher thesholds before they kick in. We cannot keep asking small business to finance the local business economy.

I am against levying more and more taxes as a means of balancing our budget or as a revenue generating strategy. The City staff or City Council member's mismanagement of finances should not be passed on to businesses or to the citizens of Oakland .

There are models in other cities which we can consider or emulate in Oakland and we should begin the difficult process of understanding "inter-relationships" between business process for generating revenue and vast expenditures associated with generating revenue. Goal: Lower expenditure and increase revenue sources (via small business creation and incentives).

The key to our City's vitality and creating revenue is going to be through our small business community. This includes no public assistance for developers and big businesses unless there is a tangible return return to citizens of Oakland and more incentive programs and tax reduction obligations for small businesses.

For example, we could explore a "move in" rate structure that is lower than current business tax rates to attract new business. Incorporate a gradual increase overtime (say over a standard business cycle like 3-5 years) and then "hold" at that rate. Rate should also be adjusted and be "size specific" to scope of product and services being offered by business and adjusted based on annual sales over an "accumulated period".

In this way, we can help emerging businesses on one end and reward long term businesses who have stayed in Oakland and who are succeeding in business by crediting them for the "lean years".

The "tax them now so we can generate more revenue now" (and worry about the failing business climate later) thinking demostrates a real lack of understanding of economics and how business is formed, executed and sustained. We have people on the council who have no direct or practical experience in actually running a business and can only "guess" at what they think might work. The voters are going to have to elect someone who actually has a business background and proven track record in business so we can stop the perpetual "experimentation" with public money to get it right.

Our rather dismal business environment in Oakland over the last 3 decades is a stark reminder of how little our political leaders and city staff know about business, about economics (national, regional and local) and financing; either from a macro (for long term planning) or from a micro (for short term planning) view.

Citizens in Distict 2 have an opportunity to demand that their next Council member have a strong business background and "real" experience in establishing and running a complex, business enterprise or project so we can look forward to a better business climate in the future; not more of the same.

David Kakishiba

The City of Oakland should have provided independent contractors doing business from their homes a courtesy notice that they are required to register their business with the City of Oakland , and is subject to local taxation. Failure to register by a date certain will result in the full levy of prior tax and penalties. Compliance will result in a waiver of prior tax and penalties.

Pamela Drake

Recently Oakland government got greedy and decided to go after very small entrepreneurs, actually those that are attempting to make pocket change or supplant social security, by not only imposing a business tax on these very small "businesses" but also; demanding "late" fees from people who never knew they owed any business taxes. This is questionable legal practice and backward policy. I would reverse it.

Aimee Allison

Oakland ’s business tax, which represents about 5% of the city’s revenue, unfairly overburdens small businesses in our city.  Oakland must actively support a healthy small business community to create good jobs and more revenue for our city’s schools, parks, and services.

First, although small businesses employ Oaklanders at a higher rate than large businesses in our city, they pay more in taxes because they don’t have the leverage to get tax breaks and incentives the city offers to larger employers.  The large subsidies offered to big businesses haven’t resulted in the number of jobs and retail tax revenues that city leaders anticipated.

Second, most big businesses are located in special tax districts that redirect revenue back into big business support, not into the city’s general fund.  Therefore, small businesses are carrying the heaviest burden on contributing to the financial health of our city.  Big businesses must pay their fair share.

This will take both political will and focus to change the way that all businesses are taxed in our city.  My experience as a small business consultant prepares me to actively support and represent the needs of the small business community on the city council and to focus on the changes on our tax regulations to make our system more fair and beneficial to all of Oakland .

Justin Horner

Every city in the Bay Area requires a Business License for businesses operating within their borders. It makes sense to expect business owners to share the cost of the city services that allow them to do business successfully. Business owners I talk to agree.

But recently that City of Oakland has been playing "gotcha" with its Business Tax, and the impact has been felt most heavily on small, home-based businesses. Recent legislation has allowed the City to see who has filed for business-related tax deductions from the State. The City then checks to see if those filers have Business Licenses.

If they do, there's no problem, but if they don't, the City aggressively pursues them for the back taxes, interest and penalties. The City has caught some big fish in this sweep, but it's caught a greater number of small businesspeople who didn't know they even needed a license.

The City should scrap tax policies that discourage the establishment of small businesses. Due to the outcry, the City Council now says that anyone who makes under $2500 per year owes no Business Tax. I think that's a good start.

I believe, however, that the City should do more by releasing small home-based businesses from the back taxes, penalties and interest. I've talked to dozens of businesspeople in this situation. None of them protest paying a Business Tax; they just don't want to be penalized for a tax they honestly didn't know about. I believe the City should enact an amnesty for small businesspeople so we can get them back on the tax rolls without putting them out of business.

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