On Tuesday, the Concord City Council is being asked to give notice of a November 3, 2026, election on a proposed Business License Tax Simplification Ballot Measure.
According to the city, the current Business License Tax structure, established in 1978, is outdated, regressive and difficult to navigate.
The staff report provides an example:
A business with $25,000 in annual gross receipts revenue pays an effective tax rate more than double that of a business with $15 million in gross receipts. A simplified, modernized system, including a uniform rate structure of $1.00 per $1,000 in gross receipts for gross receipts-based businesses, would create a more equitable and transparent framework while generating approximately $3 million more annually in locally controlled revenue.
The city says this revenue would remain under local control and would not be subject to state actions modifying shared tax distributions or redirecting funding to address statewide priorities. While local taxes are now largely protected by the State Constitution, the state continues to control statewide tax structures and has historically redirected certain revenue streams to balance its budget or fund mandated programs. These funds would support roadway rehabilitation, public safety response, parks, and other essential infrastructure and City service
The city has discussed the item since August 2025 where the Council Committee on Infrastructure & Franchise faces an estimated annual infrastructure funding shortfall of at least $24.7 million, including approximately $18 million needed each year to maintain roadway conditions at the current Pavement Condition Index (PCI) of approximately 58 and an additional $6.7 million for park, median, and public facility maintenance.
Concord also says significant unfunded needs also remain for aging infrastructure systems, including stormwater facilities, streetlights, traffic signals, and other public assets. This funding gap is the result of decades of deferred maintenance, rising construction costs, inflation, and limited growth in reliable local revenues.
The city looked at five strategies for revenue – including potential, viability and create a multi-year funding plan.
- Business License Tax simplification and modernization, focusing on correcting long‑standing inequities and improving administrative transparency
- Parcel Tax for core City services, designed to provide a stable source of operational funding
- General Obligation Bonds, supporting large‑scale capital investments in roadways, facilities, and public safety infrastructure
- Real Property Transfer Tax paired with Charter City conversion, offering long‑term revenue growth opportunities for major infrastructure needs
- Updates to existing Benefit Assessment Districts, intended to stabilize funding for neighborhood‑level improvements and maintenance
The Business License Tax simplification measure was identified as an initial step in a long‑term, multi‑year, and multi‑phase plan to address the City’s unfunded needs gap.
The Committee also evaluated several additional revenue options, including a Utility Users Tax, a User Tax on App-Based Services, and a Vacant Commercial Property Tax. These alternatives were not advanced because of legal considerations, administrative complexity, limited revenue potential, or concerns raised during the evaluation process.
Business License Tax
A Concord business license is required annually for anyone conducting business with the City, including home-based and brick-and-mortar businesses of all trades, professions, and occupations. This tax is paid directly by businesses and is not charged to residents; the City collects the tax only from commercial operators. Tax exempted businesses include charitable and non-profit organizations and certain businesses with gross receipts of less than $3,600.
The Business License Tax helps the general fund support essential City services such as roadway rehabilitation, pothole repair, public safety response, keeping public areas clean and safe, parks, and other essential infrastructure and quality of life City services. These services are utilized by businesses, their employees and customers, and contribute to making Concord a great place to live, visit, shop, and conduct business.
The analysis found that simplifying the Business License Tax would improve equity across the business community, streamline administration, increase transparency, and generate approximately $3 million more annually in locally controlled revenue.
Survey results showed support of up to 66 percent for a Business License Tax Simplification Measure that ensures smaller businesses pay less than larger businesses, along with identifying community priorities including investments in roadway rehabilitation, emergency response services, and infrastructure such as playgrounds and traffic reduction efforts.
According to the city, the Committee’s financial analysis, public opinion research, and extensive outreach to business, community members, and key stakeholder groups pointed toward the same conclusion: simplifying and modernizing the City’s outdated Business License Tax structure would create a fairer, more transparent system while providing a locally controlled funding source to help address Concord’s long-term infrastructure needs.
Analysis (per Concord)
The Committee’s evaluation quantified how the City’s Business License Tax structure created inequities across businesses of different sizes. Since the existing gross receipts tax is based on graduated gross receipts tiers, businesses with lower revenues often pay a higher effective tax rate than larger businesses. For example, a business with annual gross receipts of $25,000 pays a tax of $1.00 per $1,000 in gross receipts, resulting in an effective tax rate of 0.10 percent, while a business with $15 million in gross receipts pays approximately 0.04 percent. As a result, smaller businesses bear a proportionally greater tax burden despite having fewer financial resources.
After evaluating each option, the Committee concluded that a uniform rate structure of $1.00 per $1,000 in gross receipts for gross receipts-based businesses provides the strongest balance of equity, simplicity, administrative efficiency, and revenue generation. Under a uniform rate structure, gross receipt-based businesses would be subject to the same tax rate regardless of size, eliminating the regressive characteristics of the current system. The simplified structure would be easier for businesses to understand, easier for the City to administer, and is projected to generate approximately $3 million more annually in locally controlled revenue. This approach is also consistent with the smaller-business priorities identified during the Committee’s outreach process, as described above.
If You Go
Concord City Council
July 28, 2026
6:30 pm
1950 Parkside Drive, Concord CA
Agenda Item: Click Here
