City Business Tax Program Update
The recent economic challenges have not left our City Business Tax Program unaffected. During the recent program outreach, 11 cities chose not to renew their contracts. The most common reason cited was lack of resources. The program did gain 6 additional cities, leaving the overall city participation at 102—a net loss of 5 cities.
The program takes business license data from cities and tax return data to perform a match. This match results in cities finding out about businesses operating in their jurisdiction that don’t possess a business license or pay local taxes and the State of California finding businesses that aren’t filing required tax returns. Sounds easy enough, but the program is struggling.
We gain revenue from this program, but the big winners are the cities, many who see thousands, even millions, of dollars in revenue from participating in this voluntary program. For further information about the program, go to ftb.ca.gov and search for city business tax.