Measure H

Santa Clara Business Licensing and Taxes

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CITY OF SANTA CLARA—Would increase Santa Clara's 1992 business license tax on businesses to $45 per employee and on landlords to $15 per rental unit, to protect Santa Clara's financial stability and maintain essential services such as 911 emergency/public safety/crime reduction services, safe/clean public areas, pothole repair, parks/libraries. Measure H requires a simple majority (50% + 1) to pass.

Fiscal Impact: Would generate approximately $6 million annually. 

Next Santa Clara County Measure: Measure I



Proponents of Measure H argue that Santa Clara has not updated its business license tax in 30 years, and employees coming here to work doubles the daytime population which places demands on our infrastructure and city services. They argue that nearly half of our businesses will pay less than $91 per year, and compared to other Bay Area cities, this flat tax is one of the lowest. They argue that Santa Clara's general fund has a nearly $20 million deficit which restricts the services that can be provided for our residents and businesses such as public safety, high quality roads, parks upgrades, and senior center and library hours.

A YES vote on this measure means: The proposed measure would be approved, increasing rates and revising the business tax as set forth in the measure effective July 1, 2023. 


Opponents of Measure H argue that Santa Clara taxpayers will pay more for everything from donuts to dinners if this tax passes. They argue that if companies cut jobs or hours, business tax revenues will decline, reducing funds for all local governments, including the Santa Clara Unified School District. They argue that the City created large "rainy day" funds to help fund City services during difficult economic times. But the City Council majority refuses to use these and chooses to raise taxes instead. 

A NO vote on this measure means: The proposed measure would be not be approved, maintaining status quo.

In Depth

The Santa Clara City Council placed Measure H on the ballot, asking voters to adopt an ordinance updating Santa Clara's 1992 business tax. Currently, unless exempt, businesses pay an annual business tax depending on the type of business and/or number of employees, ranging from an annual $15 to $500 maximum per business. The annual tax for rental units is $3 per unit for operators of three or more rental units. The tax is not cunently adjusted for inflation. Measure H will eliminate the various business tax rates by type of business and require that all businesses pay a flat rate per employee or rental unit, as applicable.

If approved by a majority of the voters, Measure H would enact an ordinance, effective on July 1, 2023, to (1) require businesses to pay a flat rate of $45 per employee per business and $ 15 per rental unit for operators of three or more rental units in the City; and (2) set the annual caps on the maximum amount of tax payable to $350,000.

The proposed ordinance also provides for annual adjustment for inflation based on a consumer price index, not to exceed five percent per year. The proposed ordinance maintains various exemptions including the exemptions for nonprofit organizations and disabled veterans while adding an exemption for certain small business operators whose gross receipts are five thousand dollars or less.

If approved, the tax will continue until repealed by the voters or suspended in whole or in part by the City Council. The business license tax is a general tax, the proceeds of which could be used for any legal municipal purpose such as 911 emergency, public safety, crime reduction services, safe and clean public areas, pothole repair, parks, and libraries.

The City estimates that the changes could increase the amount of business taxes paid to the City by about $5 million per year. 

Source: City Attorney's Impartial Analysis of Measure H

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