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<br />Updated 02-07, based <br />Business License/Regulatory Fee/Tax <br /> <br />upon 09-01 economic <br />data <br /> <br />Brief Description A fee for the privilege of conducting business within the City of Eugene. It could be <br />of Funding imposed on any person, partnership, corporation or similar entity doing business in the <br />OptionCity of Eugene. <br /> <br /> <br />Prior City The City has not previously enacted a business license fee. <br />Actions and <br /> <br />History <br /> <br /> <br />Experience in The Portland Business License Law requires that all business or persons earning <br />Other business income within the City pay a fee of 2.2% of net income after allowable <br />Jurisdictionsdeductions and apportionment, with a $100 minimum. Because the fee is paid in <br /> <br />advance of a business earning the associated revenue, it is considered an operating <br />license fee, rather than an income tax. The Business License Fee generated <br />approximately $62 million in General Fund revenue in FY06. <br /> <br />In November of 2000, the City of Salem proposed a Business Registration Tax to voters <br />with a graduated scale based on the number of employees. The proposal was defeated <br />64% - no, 36% - yes. <br /> <br />Calculation Base The fee calculation could take various forms: a fixed amount per business, a flat <br />and Typical percentage of income earned in the City of Eugene, a fixed fee levied on businesses <br />Ratesaccording to their employment size. It is typically paid prior to engaging in business, <br /> <br />paid on an annual basis, and does not necessarily imply a regulatory relationship. <br /> <br />Estimated Based on Oregon Employment Department records, there were roughly 5,800 <br />Revenue Yield businesses registered in Eugene area zip codes on 2001. Based on Salem’s proposed <br /> <br />fee schedule and estimate of business size distribution, a business registration tax would <br />generate an estimated $1.4 million per year in Eugene. <br /> <br />Will the tax be practical to administer <br />: As there is no existing business license fee, <br />Administrative <br />there would be considerable administrative resources needed to implement and collect a <br />Effort and <br />business license fee. <br />Efficiency <br /> <br />What are the estimated costs to administer <br />: Exact costs are unknown administration <br />costs of a Business License program would be fairly high and labor intensive. Start-up <br />cost estimates would also need to include the cost to implement a technology based <br />tracking system for affected businesses. <br /> <br /> <br />The city has legal authority to impose a business license fee. <br />Legal <br />Defensibility <br /> <br /> <br />While the fee would be paid by businesses, some portion would likely be passed on to <br />Incidence (who <br />customers. This fee is not related to business profitability. The equity of the fee would <br />pays?) <br /> <br />depend on its structure. A flat fee per business would be a greater burden on smaller <br />businesses. <br /> <br />Residents/non-residents <br />: Not applicable <br />Fairness/Equity <br />Business/residences <br />: This would be a fee on businesses. <br />Issues <br /> <br />Low income vs. higher income citizens <br />: Not applicable <br /> <br />