Measure U Gross Receipts Business Tax

Revenue Ballot Measure

City Council placed a measure on the November 3, 2020, ballot that was approved by the voters, which changes the Business Tax calculation methodology to be based on gross receipts in the City of Richmond instead of the number of employees. The new model would calculate the business tax based on the amount of gross receipts (total amount of money received in connection with any sale) in Richmond by the business and then charge a specific percentage based on the type of business and the amount of revenue generated. The tax to businesses is based on a range from 0.075% to 1.395% of gross receipts.

Previously, the business tax in most cases was based on the number of employees. The base rate was $234.10 per year and increases per employee a business has working in Richmond (the first 25 employees are charged at $46.80 per employee, and employees above 25 are charged at a rate of $40.10 per employee). The cannabis industry (at 5%) and movie theaters (at 0.3% for revenues over $20,000) are currently based on gross receipts.

Implementation Date

Council approved a change to the implementation date from July 1, 2021, to January 1, 2022, in accordance with Section 7.04.680(B). The staff has met on several occasions with a coalition of Richmond businesses and presented at both Richmond Neighborhood Coordinating Council (RNCC) and Economic Development Commission (EDC).

In meeting with the business coalition that included representatives from West Contra Costa County Council of Business and Industry and Richmond Chamber of Commerce, staff has gathered a listing of concerns and uncertainties around definitions of certain terms, and clarification around the implementation of the ordinance. Please reference the Frequently Asked Questions (FAQ) section for more information.

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Business Outreach

Outreach Type	Who	Date
Business Data Sheet (to estimate gross receipts)	All Businesses - Over 9,000 sent	October 2021
Renewal Notices	All businesses with expired licenses since 1/31/2022 - 1,900 sent	January 21, 2022
Measure U - Update postcard	All businesses with active licenses and expired licenses since July 2018 - 4,044	January 26, 2022
Social Media/Direct Outreach	Social media campaign notifying the public of new resources available	March 28, 2022
Measure U - Renewal Notices	All expired Businesses received a physical renewal notice and letter	April 1, 2022

Updates to Measure U

The items listed below are updates regarding Measure U.

Resolution No. 138-21 - Authorizing the business license division of the finance department to offer an amnesty program for the Business License Tax
Resolution No. 159-21 - Authorizing A credit of the full amount of fees paid to the Rent Board towards their business Tax for owners of four units or less in the City of Richmond
Ordinance 10-22 - An Ordinance that replaces Resolution No. 159-21 that authorizes a credit of the full amount of rent program fees paid to the Rent Board towards their business tax for owners of four units or less in the City of Richmond.
Staff Report
Richmond City Council Presentation

Administrative Rulings

Pursuant to Section 7.04.670 of the City of Richmond Gross Receipts Business Tax Measure U, the Director of Finance, upon delegation from the City Manager, may adopt Administrative Rulings to clarify certain sections of the Measure U Gross Receipts Tax Ordinance approved by the Richmond voters in November 2020.

Administrative Ruling #1 (PDF)
1. If a business operator has earned gross receipts in Richmond but provides services outside of Richmond as well, the tax will be calculated based on gross receipts from sales in Richmond.
2. Businesses categorized as Wholesale Sales will fall under the Business Activity Classification of Class A – Retail Sales.
3. Any business that is not otherwise defined nor included in the various classifications will fall under Business Activity Classification of Class J – Miscellaneous.
Administrative Ruling 2.0 - Mini Warehouse (PDF)
1. Self-storage rental units classification changed from Class K to Class G Business and Personal Services for purposes of calculating gross receipts tax.
Administrative Ruling 3.0 - Renewal Notice Due Date (PDF)
1. Provides clarification for the due date of businesses whose license expires during the remaining period of 2022 that their business license tax is due thirty (30) days after the expiration of their existing business license.
Administrative Ruling 4.0 - Proration (PDF)
1. Proration is granted as a one-time application for those businesses whose licenses expired in 2022.
Administrative Ruling 5.0 - Grace Period for Assessing Late Fees and Penalties (PDF)
1. Provides thirty (30) day grace period for assessing late fees for those businesses that had not yet paid their 2023 business tax due on July 1, 2023.
Administrative Ruling 6.0 – City Vendor Minimum Tax Requirement (PDF)
1. Exempts vendors with contracts with the City of Richmond from the Business Tax requirement if the gross receipts generated in Richmond is under $10,000 per calendar year.