San Jose Expands and Extends Tax Break on Small Business Licenses – CBS San Francisco


San Jose Expands and Extends Tax Break on Small Business Licenses – CBS San Francisco

SAN JOSE (CBS SF) — In an effort to relieve small businesses suffering during the pandemic, the San Jose city council has unanimously agreed to expand a tax break even though it will cost the city $1 million.

The tax, which business owners pay annually to receive a license, ranges from $203 to as high as $163,745 depending on the number of workers the business employs.

For example, a sole proprietorship with only one employee would pay the base tax of $203 while a business with 20 employees pays $792. A business with 100 employees would pay more than $4,000 annually.

San Jose already has had a business tax exemption for sole proprietors earning less than twice the federal poverty level or $25,520, in revenues. Now, the city will no longer consider the number of workers a business employs and will only look at revenue and income to determine eligibility. The exemption takes effect Oct. 1 to Sept. 30, 2021.

About 6,000 businesses in San Jose would become eligible for the exemption, according to San Jose’s director of finance Julia Cooper.

To qualify for the exemption, the business must meet at least one of two income requirements. A business may be eligible if the owner makes no more than $51,040 in annual income or if the business earns no more than $25,520 in anticipated revenues for 2020.

The city also will extend the payment schedule for business taxes from the current 3-month term to 12 months. The City Council voted in June to extend the city’s business tax amnesty program, allowing for the repayment of taxes without late fees, through the end of this month.

The change results in about $1 million less in taxes being collected, according to Cooper, roughly 4 percent of the city’s adopted budget for fiscal year 2020-2021. It is unclear how the city would make up for this reduction in revenue.

CONTINUE AT SAN JOSE SPOTLIGHT San Jose Small Businesses Get License Tax Break

© Copyright 2020 CBS Broadcasting Inc. and Bay City News. Content was originally published at San Jose Spotlight


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