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Local restaurant owner warns council proposed gross‑receipts tax could hit thin‑margin operators
Summary
A Costa Mesa resident and small business owner urged council to consider lower rates or special tiers for restaurants and other low‑margin businesses, arguing a gross‑receipts approach disproportionately affects firms operating on 3–5% margins.
During public comment, Debras, a Costa Mesa resident and small business owner, urged the council to reconsider design elements of the proposed business license reform to protect restaurants and other low‑margin businesses.
Debras said many restaurants in Costa Mesa fall in the $1 million–$5 million revenue range and typically operate on margins of 3–5%, meaning a gross‑receipts tax could have an outsized effect. She asked the council to consider a lower per‑$1,000 rate for smaller businesses, a reduced tier or cap for low‑margin industries such as restaurants, and additional outreach to the restaurant community before finalizing an implementation ordinance.
Staff acknowledged that while the chamber was engaged and the city retains data on the number of businesses per receipts bracket, staff had not completed an industry‑by‑industry profit margin analysis and said they could produce a breakdown of business types to inform future council decisions.
