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Newark staff offers three ways to modernize business license tax; council asks for more analysis before sending a revenue measure to voters
Summary
City staff proposed consolidating the business license code into seven categories and raising the small‑business exemption from $25,000 to $100,000. The council asked for further analysis on tradeoffs—particularly impacts on manufacturing and property‑rental businesses—before deciding whether to place a revenue measure on the November ballot.
City staff presented a plan to modernize Newark's business license tax at the June 23 council meeting that would simplify classifications, raise the small‑business threshold and shift a larger share of the tax burden onto higher‑revenue businesses.
The staff recommended option would consolidate the ordinance into seven categories, set a $25 annual flat minimum for firms with up to $100,000 in annual gross receipts and apply progressive gross‑receipts rates by business type for larger firms. Staff estimated the balanced, staff‑recommended model would increase annual business‑license receipts by about $5.4 million (to roughly $6.85 million total). The presentation included two alternative models: a higher‑revenue option (larger revenue increase) and a revenue‑neutral option that simplifies classification but produces little net new revenue.
City Manager Benoon and Deputy Economic Development Director Angela Sway summarized outreach: multilingual handouts and four convenings, a meeting with the Chamber of Commerce and the Oldtown Business Association, and a dedicated web page. Chamber president Debbie Montes told the council the chamber supports modernization and pledged to help explain the measure to businesses and voters.
Small businesses are a particular focus. Staff said about half of the roughly 3,100 licensed businesses report $100,000 or less in gross receipts; under the proposed change those firms’ aggregate obligation would fall from about $90,000 a year under the current code to roughly $39,000 under the staff recommendation. But larger retail, logistics and professional services firms would pay more, shifting the revenue share across categories.
Not all council members agreed on revenue. One council member supported a revenue‑neutral restructuring, arguing higher taxes could deter local investment. Others said the city needs more stable revenue to support services and infrastructure amid rising costs, and favored placing the staff recommendation before voters.
Council direction: A motion to move staff'recommended measure forward to the ballot failed for lack of four affirmative votes. Council asked staff to return on July 23 with additional analysis requested by members—specifically comparisons that would consider raising rates for manufacturing while reducing pressure on property‑rental categories, and clearer modeling on impacts to business competitiveness and household pass‑through costs.
Why it matters: The business license tax has not been substantively updated since the early 1970s. Council members framed the choice as a balance between local fiscal resilience and maintaining Newark's business competitiveness; a voter decision could change the city's revenue outlook and the relative tax burden across local industries.
Quote: "We are trying to balance simplification and fairness while protecting our small businesses," Deputy Economic Development Director Angela Sway said. "We want council guidance on which trade‑offs to prioritize before going to voters."
