Redwood City’s proposal to modernize its business license tax, has passed with overwhelming support, garnering 83.75% of votes in favor, according to semi-official results from the San Mateo County Elections Office.
“We are encouraged by the strong lead in early results for Measure BB and thank voters for their continued support of Redwood City’s future,” said Redwood City Manager Melissa Stevenson Diaz.
The latest report, released on Wednesday, Nov. 20, shows the measure leading toward approval, with 26,820 votes in support and 5,202 against. The county still has 800 ballots left to process.
Measure BB, which required a majority vote to pass, will bring an estimated $7 million annually to the city’s general fund starting in 2025. This money will fund essential services like street repairs, emergency response, and public safety.
While small businesses are expected to see relief under the new tax structure, larger businesses will shoulder higher costs, raising questions about how the changes will impact the city’s economy and business environment moving forward.
The Redwood City Council unanimously placed the measure on the November 2024 ballot to modernize the city’s current 57-year-old business license tax structure. If enacted, Measure BB would update the system by setting tax rates based on business type, with higher fees for larger industries and businesses.
The city’s business license tax was established in 1911 and last updated in 2011. It currently consists of two parts–a base tax and an incremental tax, which varies based on the business type. The base tax is $86, and most businesses pay $57 per employee as the incremental tax. Rental businesses pay $31 per residential unit or 1,000 square feet of commercial space. The maximum tax is capped at $7,121.
Measure BB would adjust the base tax to $90 and set incremental tax rates from $10 to $250 per employee based on the business type and size. As a result, small retail and commercial businesses would pay a lower per-employee tax rate.
The measure exempts childcare providers and deed-restricted affordable housing from the tax.
The new rates would take effect with a phased approach on July 1, 2025.
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