Albany council asks staff to model gross‑receipts business tax options, seeks balance for small firms

Albany City Council on May 18 directed staff to produce refined models to modernize the city's business license tax, asking analysts to test variations of a gross‑receipts approach that could reduce burdens on small businesses while increasing revenue from larger firms.

Finance Director Rainer Schwartz introduced HDL consultant Eric Myers, who outlined three options: a baseline rate increase under the current per‑employee model; a single gross‑receipts rate with a low flat fee for micro‑enterprises; and a variable gross‑receipts model (the preferred analytic approach shown to council) that would keep residential rental taxed per unit while moving most other categories to receipts‑based tiers. "Under model 3, about 68% of businesses would pay the same or less than today," Myers said, but he cautioned that larger firms would bear more of the increase.

Councilors pressed staff on specific impacts. Several members flagged grocery stores and small‑margin retailers, noting thin profit margins for those operators. Council member Hansa Romero asked whether thresholds and additional categories could be adjusted to avoid sharp jumps for certain local businesses; staff said the model can be tuned and more categories added to reduce disruption.

Council members discussed revenue goals. One councilor suggested a target increase in the $300,000–$500,000 range; another floated a half‑million‑dollar target as a planning scenario. Staff agreed to return with modeled options (including a proposal with a $200,000 first‑tier threshold, alternate flat fees for retail, and versioned revenue targets between $300,000 and $500,000) and to include apportionment procedures for businesses with out‑of‑state or remote employees.

Next steps: staff will run the requested variants, publish the results and distribute them to council for follow‑up discussion and possible referral to a subcommittee.