Santa Clara City Council Puts Major Increase in Business License Head Tax on the November Ballot

Santa Clara News

by Robert Haugh

July 13, 2022 - The Santa Clara City Council put a major increase on the business license tax. It hasn’t been raised since 1992.

If a majority of Mission City voters approve the tax on the November ballot, Santa Clara businesses will pay the City $45 per employee or a “head tax.”

It’s called the “Flat Tax” in the chart below.

The Silicon Valley Central Chamber of Commerce (formerly known as the Santa Clara Chamber) opposes the tax.

“The economy is in a difficult place right now,” said Chamber President and CEO Christian Malesic. “We don’t know if there’s going to be a recession.”

He offered to work with the City to find an increase that would be less harmful to Santa Clara businesses and wait for the 2024 ballot.

The Bay Area Council (BAC), the largest business group in the region, agreed with the Chamber.'

“Just about every large employer is re-evaluating long-term strategic growth, said Alex Torres, the BAC’s Director of State Government Relations.
Former City Councilmember Teresa O’Neill is now a Chamber board member. She suggested looking at alternatives to a dramatic increase in the business license tax.

“We need to make sure that the companies in this City pay their property taxes,” said O’Neill.

“And I would really implore those of you on the Council who have really strong relationships with the 49er football team: please get them to pay their fair share of property taxes.”

But the 49er Five decided to go the route of increasing taxes on local businesses.

On a 5-2 vote, the Council placed the issue on the November 2022 ballot.

Mayor Lisa Gillmor and Councilmember Kathy Watanabe voted against it.

They said Santa Clara businesses shouldn’t be burdened by more taxes during an uncertain economic time.

Mission City voters will decide the issue in a few months.