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City Council Meeting of August 6, 1996 <br />New Tax Classification <br />Page 2 <br />The method currently used to calculate the gross receipts tax is regressive in nature. <br />Although the base amounts increase in the classification range, the rate assessed per <br />thousand dollars is reduced as the business generates additional revenue in gross <br />receipts. <br />DISCUSSION/ANALYSIS: <br />In May, 1996, Councilmember Sanders requested that staff perform a business tax <br />survey of the surrounding cities, pertaining to the tax paid by auto dealers. Including <br />the City of Colton, a total of ten cities throughout the counties of San Bernardino and <br />Riverside were surveyed. <br />Factors reviewed to determine if the cities surveyed were comparable in their taxing <br />method and size are as follows: (1.)City Has Auto. Mall(HAM), (2.) City Type of Tax (a) - <br />Gross Receipts(G/R), (b.) Flat Rate(F/R), (c.) Number of Employees(NOE), (3.) City <br />Number Business License(NBL), (4.)City's Population(POP), (5.)City Has a Tax <br />Cap(H/C), (6.)Tax Paid G/R(T/P) per Million <br />NAME HAM Type of Tax N B L <br />San Bernardino County <br />POP H/C TIP on 22 Mil TIP on 33 Mil <br />Colton <br />No <br />G/R <br />2400 <br />43K <br />No <br />6,910 <br />10,210 <br />Redlands <br />No <br />G/R <br />4079 <br />67K <br />No <br />13,209 <br />19,809 <br />San Bern. <br />Yes <br />G/R <br />15000 <br />180K <br />No <br />10,000 <br />14,750 <br />Fontana <br />No <br />G/R <br />8000 <br />100K <br />No <br />5,553 <br />8,303 <br />Rialto" <br />No <br />G/R <br />7000 <br />80K <br />Yes <br />5,500 <br />8,250 <br />Ontario <br />Yes <br />G/R <br />8400 <br />156K <br />No <br />4,450 <br />6,650 <br />Riverside County <br />Moreno Vly <br />Yes <br />G/R <br />4200 <br />132K <br />No <br />5,550 <br />8,300 <br />Corona" <br />No <br />G/R <br />6000 <br />96K <br />Yes <br />N/A <br />N/A <br />Norco <br />Yes <br />NOE <br />2200 <br />25K <br />N/A <br />N/A <br />N/A <br />Riverside' <br />Yes <br />G/R <br />18000 <br />240K <br />Yes <br />N/A <br />N/A <br />" The City of Rialto has a Business License cap of $10,000.00 for all Gross Receipts <br />Categories. The cities listed above with an " in the survey have either a specialized tax <br />or cap design for auto dealers, with the exception of the City of Norco. Norco's tax is <br />based on the number of employees for this type of business. The City of Corona has a <br />special tax classification for auto dealers, and the City of Riverside has a cap of $5,000 <br />maximum for auto dealers only. <br />