Sausalito pulls business license ballot measure – Marin Independent Journal

Sausalito will not ask voters this November to update the city’s business licensing rules.

The City Council tabled a proposed ballot measure that recognized maritime businesses, clarified tax classifications and cut taxes for some businesses.

“The main purpose of the revisions was to reduce taxes,” Mayor Steven Woodside said. “Because this was not well-understood by many, and because there are so many election-related and other issues pending now, a unanimous council decided to postpone this until 2028.”

The July 21 decision came after three dozen residents wrote letters. Most said the revisions would hurt some blue-collar businesses.

“Please vote NO on the upcoming business license tax that is written to apply to dog walkers, hand persons and maids, among others,” wrote Sharon Lambton. “Services of this nature should NOT require additional fees just because they are offered, in home, in Sausalito.”

“This resolution requires further study, particularly its effect on small businesses in the Marinship,” wrote John Ferrell. “Do not rush into another problem where negative ramifications are missed.”

The city established its business license tax code in 1968.

In 2018, 65% of voters approved a ballot measure reducing the ordinance’s 22 business tax classifications to four categories. Updating the rules required passage by voters.

Ambiguities in the code surfaced in March when the council heard an appeal by KKMI Sausalito, a maritime repair and maintenance yard at Clipper Yacht Harbor.

The business has been randomly selected by auditors reviewing city tax records. The city concluded KKMI belonged in a different licensing and tax category. The business was assessed $66,000 in fees and penalties. It has appealed.

During the council hearing, it emerged that the city’s business licensing code did not have a category for maritime and some blue-collar businesses.

In addition to granting the appeal, the council instructed staff to report on other missing categories or ambiguities. That presentation was made on July 7.

Angeline Loeffler, the finance director, recommended creating a “maritime business category” with a “tax rate of $2 per $1,000 gross receipts.” She also suggested “a new catchall category for non-professional services” with a rate of $3 per $1,000 gross receipts.”

Both categories would have a $125 minimum tax rate. She also suggested the council be given explicit authority to reduce tax rates and estimated the new classifications would generate between $10,000 and $25,000 annually.

The next general election where voters can amend the ordinance will be in November 2028. In the meantime, city staff said they will look at shorter-term fixes.

“The Council directed the preparation of a resolution providing clarification of the existing business license tax ordinance in the event the Council decides not to place a measure on the ballot,” City Attorney Sergio Rudin said in a staff report.

“This will be provided at a subsequent council meeting for consideration in the event the Council elects not to place a measure on the ballot,” he said.