Staff lays out business-license tax options: $25 microbusiness fee, 0.1%–0.3% rates and $150,000 cap

City staff presented two primary options to restructure National City's business-license tax, moving from fixed flat fees to a gross-receipts percentage model with category-specific rates.

Economic Development Manager Pedro Garcia told the council that staff recommended a model with a $25 annual flat fee for microbusinesses (gross receipts of $25,000 or less), and variable percentage rates for larger businesses—staff examples showed 0.1% for retail/general, 0.2% for contractors/services and 0.3% for professional/property rental under option 1. Staff also recommended an annual tax-liability cap of $150,000 for both options. Pedro Garcia summarized illustrative impacts: an ice-cream push cart grossing $25,000 would pay about $2 a month under the model (roughly 0.5¢ per $5 sale); a neighborhood bakery at $1,000,000 gross receipts would be charged about $1,000 a year under option 1; an auto dealership selling a $60,000 vehicle could pass through about $60 on that sale under option 1 examples.

Garcia said staff estimated option 1 would raise roughly $7.1 million annually and option 2 about $5.8 million (option 2 lowers the retail rate to 0.05%, reducing revenue by approximately $1.4 million), and noted the first dollar of revenue under any measure would not be available for budget use until 2028. "Our proposed rate structure creates a more equitable model based off of percentages," Garcia said. "With the $25 annual flat rate for micro businesses that gross $25,000 or less..." The presentation included sector-by-sector examples to address concerns over pass-through effects to consumers and renters.