Anaheim Council Delays Action on Controversial Business License Tax

Anaheim’s City Council delayed action Tuesday on an increasingly controversial business license tax that would levy taxes based on the kind of services a firm provides and its gross receipts.

The proposed ordinance was scheduled for its first reading, but the council unanimously granted a Chamber of Commerce request to postpone the reading until April 7.

Based on the recommendations of a Sacramento consultant the council hired in May, the proposed law would create eight categories of businesses divided into three tax brackets. Taxes would range from 6 cents to 18 cents for every $1,000 of gross receipts. Manufacturers and wholesalers would pay the least, and professionals would pay the most.

All businesses would have to pay $15 in yearly processing fees.

The ordinance would replace the city’s current business license law, which is 29 years old and bases taxes on what the consultant, Ralph Andersen & Associates, has described as a hodgepodge of methods.

Though a Chamber of Commerce committee endorsed the consultant’s report, President Floyd A. Farano said the committee needed more time to study what it would mean in dollars to businesses.

In a telephone interview before Tuesday’s meeting, Councilman Fred Hunter labeled the proposed ordinance “unconstitutional.”

“Its an invasion of their (businesses’) right to privacy” to be forced to divulge gross receipts to the city, he said.