How To Attract More Small Businesses to Your City

Community Leadership Training

Alexandria has an ordinance (No. 4408) that provides business license tax relief, reform, and simplification for small and medium-sized businesses during their first two years of operation in the city. The initiative reduces the tax burden to $50 in the first year for businesses whose estimated gross receipts are between $100,000 and $2 million.

In the second year, the tax burden on average is cut in half as businesses pay the license tax based on the first year's actual gross receipts instead of the second year estimated gross receipts. The businesses pay the license tax in the third year based on the second year's actual gross receipts. These reforms leave start-up businesses with more money in the initial years and serve as an incentive for businesses to locate in Alexandria. (A Report from the National League of Cities)

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How You Can Save Your City $1 Million In Tax Revenue

Community Leadership Training

The towns of Parker and Castle Rock, Colorado, joined forces to take sales tax collection into their own hands. Prior to that, local businesses had paid both state and city sales tax to the state, which returned city sales tax to local governments. But the towns did not trust that state collection and enforcement efforts were sufficient to guarantee that they were receiving all the revenue to which they were entitled. In 2003, the towns created the Joint Sales Tax Self-Collection Program and hired a central tax collection staff.

In the first full year of operation, Castle Rock realized a net gain of $1,868,031 and Parker a net gain of $878,708. The towns estimate they will each save $75,000 annually over what it would cost to run separate programs. The savings have enabled the towns to offer increased services and pass the cost savings on to residents and business owners. The program also allows the towns to monitor compliance, provide timely, accurate statistical information to town councils, and exercise more authority over collection, since they now hear appeals on city sales tax issues. Local staff are available to provide assistance to business owners, and town websites offer business and tax licensing and tax filing options. (A Report by the National League of Cities)

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