Staff Report.Business License Late Fee Penalty Waiver
PREPARED BY: Gitta Ungvari
Finance Director
Reviewed by: Town Manager, Assistant Town Manager, and Town Attorney
110 E. Main Street Los Gatos, CA 95030 ● 406-354-6832
www.losgatosca.gov
TOWN OF LOS GATOS
COUNCIL AGENDA REPORT
MEETING DATE: 12/20/2022 ITEM NO: 9
DATE: December 13, 2022
TO: Mayor and Town Council
FROM: Laurel Prevetti, Town Manager
SUBJECT: Authorize the Continuation of the Business License Late Fee Penalty
Suspension into the 2023 Calendar Year
RECOMMENDATION:
Authorize the continuation of the Business License Late Fee Penalty Suspension into the 2023
calendar year.
BACKGROUND:
The Town requires all businesses located within Los Gatos and/or those that operate within Los
Gatos to obtain a business license. Annual renewal payments are due on January 2 of each year.
According to the Town Code a 25% late fee penalty is assessed up to 100% on unpaid balances
every 30 days.
Since March 2020, to alleviate the impacts of the pandemic, the Town Council has been
working to remain supportive and adaptive to the community’s businesses.
One of the steps taken to support businesses included a business license late fee penalty
suspension during the emergency proclamation.
DISCUSSION:
The Town is currently partnering with HdL Companies (HdL) to provide dedicated business
license support to Los Gatos businesses. Through the partnership, the Town’s business license
application and renewal process has been streamlined by offering online business license
applications and renewals. HdL is assisting with a variety of business license related tasks
including new applications, annual renewals, payments, compliance inquiries, and any other
general support. In addition, in November, Los Gatos voters approved Measure J, which
PAGE 2 OF 2 SUBJECT: Authorize the Continuation of the Business License Late Fee Penalty Suspension in 2023 Calendar Year DATE: December 13, 2022
DISCUSSION (continued):
modernizes the Town’s business license tax program. This is the first update to the program
since 1991 and includes adjustments to flat rate fees, retailing gross receipts, and e-commerce,
manufacturing, wholesaling, and jobbing gross receipts.
During this transition period, staff is recommending waiving the business license late fee
penalty during the first year (2023) to provide adequate time for businesses to adjust to the
new process and fee structure.
FISCAL IMPACT:
Continuing the late fee penalty waiver will reduce the potential collection of late fee penalties;
however, providing sufficient time for the transition to the online platform and other HdL
efficiencies will enable businesses to pay on-time in the future and have a better user
experience.
ENVIRONMENTAL ASSESSMENT:
This is not a project defined under CEQA, and no further action is required.