News

City set to launch new headcount tax

Business license tax to bring in $6 million annually; Google expected to pay $3.5M

In the coming weeks, Mountain View leaders will roll out a new business tax that could eventually net $6 million or more per year from the city's largest employers.

Starting in January, the city will begin charging companies big and small a new fee based on their total headcount of employees. The tax was specifically designed to extract more revenue for public services from the city's largest tech companies to offset the traffic and housing demands that they create.

The new business tax will be gradually phased in over the next three years to allow larger businesses to adapt to the new fee structure. Large employers with 50 or more workers will be required to pay one-third of their license fees next year, and then two-thirds in 2021. The full tax will be implemented in 2022.

A graphic showing how the tax would affect each business can be found here.

Over recent months, officials in the city's Finance Department have sent out notices of the new fees to about 5,000 businesses registered with the city. Staff have been fielding questions from business owners, but overall there doesn't seem to be any major problems with the new fee regime, said Finance Director Jesse Takahashi. The new fees will be due at the start of January.

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"There's been quite a variety of responses," Takahaski said. "Most are trying to understand how this will work and how it's different from the previous system. But overall it seems like folks are accepting it."

The new business tax operates on a tiered system that charges a higher per-employee fee based on the size of the company. For example, Trader Joe's with 63 workers would pay up to $75 per employee. Pure Storage and its 1,150-person workforce would pay a maximum of $100 per employee.

Small businesses with annual revenues of less than $5,000 would be exempt under the new city business tax, as would any business owned by a military veteran as the sole proprietor.

As Mountain View's largest employer by far, Google stands to pay the most under the new fee structure. The tech giant reportedly has more than 23,000 employees in Mountain View, which would require the company to pay about $3.5 million annually.

Mountain View's experiment in taxing its large tech employers is expected to be closely watched by other cities. Seattle, Cupertino and East Palo Alto each proposed similar plans to tax large businesses last year, but local officials decided to take a wait-and-see approach.

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In Cupertino, officials last year held off on a similar per-employee tax that would have had a lopsided impact on Apple. Instead, Cupertino officials decided to directly negotiate with Apple on greater corporate contributions to the community. Earlier this year, Apple proposed funding about $10 million for a series of bike paths, and Cupertino officials indicated they didn't need to press for more.

In Mountain View, the revenue from the new business tax is expected to be used mainly for transportation improvements, with some left over for to fund affordable housing or other projects.

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City set to launch new headcount tax

Business license tax to bring in $6 million annually; Google expected to pay $3.5M

by / Mountain View Voice

Uploaded: Tue, Dec 17, 2019, 1:37 pm

In the coming weeks, Mountain View leaders will roll out a new business tax that could eventually net $6 million or more per year from the city's largest employers.

Starting in January, the city will begin charging companies big and small a new fee based on their total headcount of employees. The tax was specifically designed to extract more revenue for public services from the city's largest tech companies to offset the traffic and housing demands that they create.

The new business tax will be gradually phased in over the next three years to allow larger businesses to adapt to the new fee structure. Large employers with 50 or more workers will be required to pay one-third of their license fees next year, and then two-thirds in 2021. The full tax will be implemented in 2022.

A graphic showing how the tax would affect each business can be found here.

Over recent months, officials in the city's Finance Department have sent out notices of the new fees to about 5,000 businesses registered with the city. Staff have been fielding questions from business owners, but overall there doesn't seem to be any major problems with the new fee regime, said Finance Director Jesse Takahashi. The new fees will be due at the start of January.

"There's been quite a variety of responses," Takahaski said. "Most are trying to understand how this will work and how it's different from the previous system. But overall it seems like folks are accepting it."

The new business tax operates on a tiered system that charges a higher per-employee fee based on the size of the company. For example, Trader Joe's with 63 workers would pay up to $75 per employee. Pure Storage and its 1,150-person workforce would pay a maximum of $100 per employee.

Small businesses with annual revenues of less than $5,000 would be exempt under the new city business tax, as would any business owned by a military veteran as the sole proprietor.

As Mountain View's largest employer by far, Google stands to pay the most under the new fee structure. The tech giant reportedly has more than 23,000 employees in Mountain View, which would require the company to pay about $3.5 million annually.

Mountain View's experiment in taxing its large tech employers is expected to be closely watched by other cities. Seattle, Cupertino and East Palo Alto each proposed similar plans to tax large businesses last year, but local officials decided to take a wait-and-see approach.

In Cupertino, officials last year held off on a similar per-employee tax that would have had a lopsided impact on Apple. Instead, Cupertino officials decided to directly negotiate with Apple on greater corporate contributions to the community. Earlier this year, Apple proposed funding about $10 million for a series of bike paths, and Cupertino officials indicated they didn't need to press for more.

In Mountain View, the revenue from the new business tax is expected to be used mainly for transportation improvements, with some left over for to fund affordable housing or other projects.

Comments

Dan Waylonis
Registered user
Jackson Park
on Dec 17, 2019 at 2:47 pm
Dan Waylonis, Jackson Park
Registered user
on Dec 17, 2019 at 2:47 pm
19 people like this

It's sad to see such a flagrant shakedown of large, successful companies. And I find it hard to believe that the tax revenue be used solely to alleviate the purported misdeeds. The City of Mountain View has a tax and spend problem.


Local business guy
Old Mountain View
on Dec 17, 2019 at 2:53 pm
Local business guy, Old Mountain View
on Dec 17, 2019 at 2:53 pm
7 people like this

The businesses that survive the state taxes and fees will be driven out of business or out of the state by new county and city taxes such as this one.... Time to vote these fools out.


Mtn view
Old Mountain View
on Dec 17, 2019 at 6:53 pm
Mtn view , Old Mountain View
on Dec 17, 2019 at 6:53 pm
7 people like this

Yeah the flagrant shakedown is hard to accept, with all the extra traffic on Shoreline Blvd and all the employees that commute into town and don’t leave their campus during the day to contribute to the sale tax or buy meals locally. How dare the city council?

It’s a shakedown all right, making them pay for the potholes and wear on the roads ... lol


Polomom
Registered user
Waverly Park
on Dec 17, 2019 at 7:29 pm
Polomom, Waverly Park
Registered user
on Dec 17, 2019 at 7:29 pm
2 people like this

Will the collection be enforced or are we at the mercy of the companies to pay their taxes? Web Link The City seems to have a problem collecting unpaid fees....


Groot
Registered user
Willowgate
on Dec 17, 2019 at 7:31 pm
Groot, Willowgate
Registered user
on Dec 17, 2019 at 7:31 pm
Like this comment

The wise men of Chelm must have big plans for the loot.

What goal could possibly be worth running businesses away from Our Fair City?

Preventing Climate Change Catastrophe once and for all? Medicare for all? Peace on Earth, Goodwill Toward Men?

All three, I hope.


Fred
Old Mountain View
on Dec 18, 2019 at 8:01 am
Fred, Old Mountain View
on Dec 18, 2019 at 8:01 am
2 people like this

How many trillions of dollars have been wasted on regime-change Wars? How many babies have been killed? What good has any of this done for the American people? Will there be any repercussions for the past three presidents who consistently lied to us about the "progre$$" in Afghanistan? How thrilled are the American people to know that they'll be paying another 2 trillion to upgrade our nuclear Arsenal and devise smaller nukes that are "more usable"?
You know a trillion here and a trillion there and pretty soon you're talking real money. So of course the logical conclusion is to tap Google for whatever we can wring out of them.



Gary
Registered user
Sylvan Park
on Dec 18, 2019 at 8:05 am
Gary, Sylvan Park
Registered user
on Dec 18, 2019 at 8:05 am
8 people like this

Driving Google away? $3.5 million? How much profit does Google receive? Is the contention that any fee collected from a corporation is counter-productive?


Mark H.
Old Mountain View
on Dec 18, 2019 at 11:07 am
Mark H., Old Mountain View
on Dec 18, 2019 at 11:07 am
4 people like this

Will there be any distinction made between or quibbles about ft/pt employees? Is there any incentive to prevent the employers from making some layoffs to save money while the remaining employees work harder for the same pay?


Greg David
Registered user
Old Mountain View
on Dec 18, 2019 at 4:40 pm
Greg David, Old Mountain View
Registered user
on Dec 18, 2019 at 4:40 pm
2 people like this

Set to launch?

I received my business license renewal two weeks and got it in the mail this week. went ftom $30 to $75 this year. not exactly sure what I get for that $75...


Blue Doverton Square
Registered user
Waverly Park
on Dec 19, 2019 at 8:38 pm
Blue Doverton Square, Waverly Park
Registered user
on Dec 19, 2019 at 8:38 pm
Like this comment

Don't all these companies already pay taxes? I thought our current taxes were supposed to cover infrastructure.
How dare companies be successful and pay their existing taxes in Mountain View!

Remember not all the companies in Mountain View are Google


Gary
Registered user
Sylvan Park
on Dec 20, 2019 at 2:58 pm
Gary, Sylvan Park
Registered user
on Dec 20, 2019 at 2:58 pm
1 person likes this

$75 per employee. Next to nothing. Lay-offs? Absurd.


Chris Chiang
Registered user
North Bayshore
on Jan 2, 2020 at 8:39 am
Chris Chiang, North Bayshore
Registered user
on Jan 2, 2020 at 8:39 am
4 people like this

The city may not look much different after the $6 million large company head tax, but that revenue could be transformative for Mountain View's K-8 district. Imagine pride and property values if our K-8 district was one of the region's most well funded? Funding has a direct correlation with a school's success. Our high school district is already the highest paying district in California, yet Mountain View's wealth hides that funding and achievement inequalities in the K-8 Mountain View-Whisman School District. $6 million is about the same our K-8 school district would regularly receive if school tax funds were not redirected to the special Shoreline business district. More info Web Link So if MV does not want to give schools the head tax, then give our schools their full share of the Shoreline funds. There are very city few policies that can overnight transform students' lives, this is one of those moments that could overnight change Mountain View.


Chris Chiang
Registered user
North Bayshore
on Jan 2, 2020 at 8:54 am
Chris Chiang, North Bayshore
Registered user
on Jan 2, 2020 at 8:54 am
3 people like this

The head tax was a voter measure, so the head tax is directly spoken for already, but that does not stop MV from using its imagination to then give our schools their full share of the Shoreline business district funds. It just happens to be the head tax is about the same as our local schools lost revenue from the Shoreline business district. That tax district was setup to improve Shoreline to attract businesses there, most would say mission successful, lets now treat it like any other part of MV.


Steven Nelson
Registered user
Cuesta Park
on Jan 2, 2020 at 1:02 pm
Steven Nelson, Cuesta Park
Registered user
on Jan 2, 2020 at 1:02 pm
Like this comment

Thanks Christopher Chiang! Reignite that "Sunset Shoreline" flame. The MVWSD recently renegotiated the general property tax 'misdirection' with the Shoreline (City) District. Slightly better than before, but not a legal guarantee and not permanent.

A Special Tax for the schools can be a per square foot tax on real property. Los Angeles USD tried, but failed by asking too much ("uniform" 15 cents per square foot for every single improvement, residential or commercial, in their entire district). Berkeley successfully implemented this, before the MVWSD Trustees 'ran scared' and advanced a REGRESSIVE same-per-lot 'parcel tax". Too bad.

BUT Christopher! You can now join former MVWSD Trustee Greg Coladonato and me - "take up a lance" :) and join us in this crusade for a FAIR per-square-foot K-8 Special Tax to replace MVWSD's current regressive tax ( @$127 for every Google parcel ).


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