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Albany moves business license tax to gross‑receipts model amid business concerns
Summary
The council approved a measure to replace the city’s employee‑based business license fee with a gross‑receipts model that staff said would shift burden and generate about $600,000 in additional revenue; public commenters warned the tax would hit low‑margin businesses by taxing 'the top line.'
The Albany City Council on July 20 approved a measure to restructure the city’s business license tax from an employee‑based model to a gross‑receipts structure that city staff and consultant HDL described as better scaling the burden across businesses.
Finance Director Rena Schwartz presented the proposal’s main elements: base rates of $50 (up to $50,000 in gross receipts) and $200 (up to $200,000), then a $1 per $1,000 surcharge above $200,000 for retail and $5 per $1,000 above $200,000 for most other businesses. Residential rental taxation would remain a per‑unit fee indexed for inflation. "We think this will generate an additional 600,000 or so in, new revenue," Schwartz said.
Council members pressed staff on which businesses could be most affected. Staff and HDL said businesses with unusually high gross receipts relative to number of employees (for example, some grocery stores and certain retail operations) could pay more in absolute dollars, but the model would reduce or maintain charges for a large majority of small businesses; staff said roughly 82% of Albany businesses would pay less under the proposed structure.
Public commenter feedback was sharply critical of the gross‑receipts approach. One resident said the proposal taxes the top line rather than profit: "You're taxing not the bottom line, the top line." The commenter warned these costs could be passed through to customers and affect affordability.
Council response and safeguards
Councilors recognized the public concern and said the measure retains category distinctions so future councils — if the measure is adopted by voters — could adjust rates for specific business categories. Multiple council members thanked staff and HDL for modeling and outreach; Vice Mayor Hanson Romero and Council Member Mickey both expressed interest in monitoring impacts and potential adjustments.
Next steps
Resolution 2026‑63 to place the business license measure on the November ballot passed on roll call. If voters approve, the city will work with HDL and city staff on implementation details including revenue apportionment and guidance for businesses on reporting mixed retail/service activity.
