Business License Tax

The Business License Tax (BLT) is charged annually to Oakland businesses based either on gross receipts (accounts for approximately 60% of business license tax revenue) or rental income (40% of revenue). The rate on gross receipts varies by type of business, ranging currently from a low of $0.60 per $1,000 of receipts for grocers, to $5.50 per $1,000 of receipts for largest businesses in the miscellaneous category. The rates for the BLT were increased by voters at the November 2022 election.

BLT has been a relatively steady and reliable revenue source for the City, as shown below. However, BLT is impacted by the health of the economy. The COVID-19 pandemic resulted in increased commercial property vacancies and reduced rental rates and multi-family sectors, which as put downward pressure on tax revenues from these sources. For many of these businesses, pandemic related economic effects appear likely to linger as the work-from-home transition continues to affect attendance in downtown offices. . New construction activity is also expected to slow in response to heightened uncertainty about the prospects for office space in the near term as well as uncertainty with respect to higher interest rates.

These downward pressures, however, are likely to be more than offset by increases in tax revenue resulting from tax rate increases approved by voters in November 2022. As a result, BLT is expected to grow by approximately $20 million, totaling $123.2 million in FY 2022-23. Thereafter, the estimated BLT revenues for FY 2023-24 and FY 2024-25 are $125.2 million and $128.1 million, respectively. This is an average projected annual increase of 1.98% year over year after the initial rise in FY 2022-23.