Irvine Council Eliminates Business License Fee

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The Irvine City Council Tuesday night eliminated the city’s $51 business license fee, a move that members of the council’s Republican council majority tout as standing against over-taxation by the government.

The councilman who first proposed the dissolving the tax, Jeffrey Lalloway, declared it the “first time” he’s “ever heard of a city or government eliminating a tax.”

Council members voted 3-1 to undo the tax, with Mayor Steven Choi the only no vote. Councilwoman Beth Krom, who has expressed opposition to cutting the tax and is the only Democrat on council, was absent from the meeting.

Eliminating the business license fee is the latest move by the Republican council majority to steer Irvine in a more conservative direction after years of governing by a Democratic council majority.

Last month, the council repealed a living wage ordinance that requires city contractors with contracts valued at $100,000 or more to pay all their employees working in the county at a level that at least matches the lowest paid city employee.

Choi argued that slashing the business license fee would have a negligible effect on attracting businesses to Irvine while transferring a nearly $1 million burden — the amount that the business license fee raised last fiscal year – to city residents.

At the last meeting, Lalloway’s colleagues supported eliminating the tax but not the business database program it finances, saying that it benefits city officials to know who is setting up shop in town by allowing them to make sure the businesses comply with various laws. The program costs over $600,000 to maintain.

Lalloway said the decision is Irvine’s way of making a ”major statement” to other governments to look at slashing taxes rather than adding to a “massive taxation” system.

Lalloway said that Americans in the same tax bracket as retired professional basketball star Yao Ming likely pay more in taxes than the 50 percent of personal income Ming pays to the Chinese government.

“I would hope in some way this can motivate other cities, counties, states, to look at their own internal taxing systems, and try to make it easier for the middle class,” Lalloway said.

Please contact Adam Elmahrek directly at aelmahrek@voiceofoc.org and follow him on Twitter: @adamelmahrek

  • tinroof

    I applaud the Irvine City Council for making a statement on the issue of taxes. We need to make government regulation less of a burden upon business, and this is a good symbolic way to start.

  • Pingback: Irvine City Council Votes to Eliminate Business License Tax | jefflalloway.com()

  • @Dan Chmielewski

    Yao Ming has a net worth of between $65 and $120 million. Is this how Lalloway defines Middle Class?

  • irvine dad

    Another Republican trick that backfires. I thought Republicans belived that people who use city services should pay for them. But, here even other Republicans are saying “wait, you’re just socializing the costs.” The one thing that you can count on Republicans to do is compromise their principals when they think they see political advantage. Encourage small businesses? Not this city council that squashed local retail by bringing in two walmarts.

    • Philmore

      How do you know ‘local retail was squashed’? Any numbers or articles? Perhaps Irvine WMT customers (as well as those in nearby cities -Tustin, NB, etc) were merely saved a longer commute to WMTs in HB, Santana, or Laguna Niguel ? Is the local retail economy still in ruins from bringing in the 3 Target stores to Irvine? That news missed me.

    • David Zenger

      The provision of the license itself is the only “city service” that is provided by cities. Nobody really cares about it except the agency that is employed in issuing it. In other words it was always just a scam to extract money from somebody.

  • @Dan Chmielewski

    Nearly half the taxpayers getting a $51 rebate don’t live in Irvine. It’s not a million dollar tax repeal; If Irvine has 250,000 residents and the program costs $600,000, it really costs Irvine residents $2.40 a person. But it allows Lalloway to say “he cut taxes” on campaign mailers. Don’t spend it all in one place.

  • Philmore

    Not a resident, but I applaud the intent to remove barriers to startups, especially since it is across the board, not targeted at only ‘favorite’ entities. I hope data can be collected for a revisit and evaluation in 6-12 months? Can local incentives stem a tide of business-hostile State level environment?

  • Ronald Wren

    Good job Irvine. You are well on your way to becoming the next Kansas. I am sure The republican majority is excited to decide which city service they want to cut.