Keep on Taxin’

City Raises Business License Fee

I received my business tax renewal notice from the San Jose City Finance Department the other day. It seems that the San Jose City Council “adopted” a new Business Tax Administrative Fee of $22, effective July 1, 2008. Small business owners and sole proprietors are now charged a minimum $172 for the privilege of doing business in San Jose. What is interesting about the increase is the explanation printed on the renewal notice. It reads:

This Business Tax Administrative Fee of $22 . . . is required on all business tax accounts in order to fully recover the administrative costs associated with the handling and processing of the business tax registration and renewal forms as well as the issuance of the Business Tax Certificates.

It’s even more interesting to note that the pre-printed address on the return-mail envelope is for a post office box in San Francisco!  The City of San Jose is paying some company in San Francisco to process these transactions! 

Knowledge of this arrangement raises a few questions: Is it really that time consuming (and expensive) to have San Jose city workers (or interns) open an envelope, enter the data, and deposit a check?  Aren’t there any San Jose based companies that could do the job so that the revenues/profits stay within the city?

Collecting and processing the business tax licenses seems like such a basic task, one wonders why subcontractors need to be hired to perform the service.  Perhaps there is a firm in San Francisco that the city could hire to repair San Jose’s streets and properly maintain its parks.


  1. Pete, you are absolutely right.  This is a joke that the city would have any outside agency, let alone one from SF, to do our simple accounting work.  This is a joke I hope.

  2. I have to agree that this $22 administrative fee is ridiculous. If San Jose is going to require that all persons and businesses doing business in San Jose have to pay a business tax, the least the city should do is cover the administrative costs associated with the tax.

    What is next? A new fee to cover the costs of administering the administration fee that covers the cost of administering the business tax?

    Adding this fee only adds to the cost of doing business in San Jose. Plus, this additional fee could actually lead to a decline in revenues generated by the business tax since the city relies on business owners to voluntarily pay the business tax.

    I empathize with city leaders as they look in every nook and cranny for new revenue sources. But the addition of this administrative fee is simply penny wise, pound foolish.

  3. Wanted to add to this post, my intention to establish a future site entitled, “FLIP SAN JOSE.”  Through this blog entry, I wish to establish copyrights to/for the “FLIP SAN JOSE” label.  Stay tuned.

    Pete Campbell
    San Jose, CA

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