Form revised May 5, 2009

FISCAL NOTE FOR NON-CAPITAL PROJECTS

Department:	Contact Person/Phone:	DOF Analyst/Phone:
Legislative	Ben Noble / 4-8160	Not Applicable

Legislation Title:

AN ORDINANCE relating to taxation; increasing the Business and Occupation Tax threshold for tax due; and amending Section 5.55.040 of the Seattle Municipal Code

· Summary of the Legislation:

This proposed legislation increases Seattle’s Business and Occupation (B&O) Tax threshold from gross revenue of Eighty Thousand Dollars ($80,000) to gross revenue of One Hundred Thousand Dollars ($80,000), starting in 2010.

· Background: (Include brief description of the purpose and context of legislation and include record of previous legislation and funding history, if applicable):

This threshold was increased for 2008 from $50,000 to $80,000.  This increase was to adjust for the impacts of inflation since 1994, which was the last time the threshold had been raised.  The current proposal is designed to provide tax relief to small businesses to help address the challenges of the current economic downturn. 

· Please check one of the following:

____ This legislation does not have any financial implications.  (Stop here and delete the remainder of this document prior to saving and printing.)

__X_ This legislation has financial implications.  (Please complete all relevant sections that follow.)

Appropriations: 

This legislation includes no appropriations.

Anticipated Revenue/Reimbursement: Resulting From This Legislation:

Fund Name and Number	Department	Revenue Source	2009 Revenue	2010 Revenue
General Subfund (00100)	DEA	B&O Taxes	No change	($455,000)
Parks and Recreation Fund  (10200)	Department of Parks and Recreation	B&O Taxes	No Change	($45,500)
TOTAL				($500,500)

Notes: Staff has forecast a total revenue reduction of approximately $500,000, based on recent tax receipts.  By charter, 10% of the B&O revenues are directed to the Park Funds.  Thus, Parks Fund revenues would be reduced by just under $50,000.  Whether this loss will be offset by a “back fill” of General Fund revenues would be determined during the 2010 budget process.

Total Regular Positions Created, Modified, Or Abrogated Through This Legislation, Including FTE Impact: 

This legislation has no impact on City positions.

Spending/Cash Flow:

Not applicable.

· What is the financial cost of not implementing the legislation?

This legislation is designed to provide modest tax relief to small businesses.  There is no direct cost associated with not implementing this legislation (although not passing it would preserve approximately $500,000 in City revenues).

· Does this legislation affect any departments besides the originating department?

Only in terms of its indirect impacts due to associated decreases in City revenues.

· What are the possible alternatives to the legislation that could achieve the same or similar objectives?  Any number of taxes or fees might be reduced for small business, but all would have some revenue impact to the City.

· Is the legislation subject to public hearing requirements: 

No. 

· Other Issues (including long-term implications of the legislation):

Please list attachments to the fiscal note below:

None.