Businesses that register with the city of Westminster next month will get a year-long reprieve from the city’s business license tax under a tax holiday approved by the City Council Wednesday evening.

Mayor Tri Ta proposed the Business Tax Holiday program as part of National Small Business Week in May.

According to the proposal, businesses that commence operation and file required applications in May will be exempt from the city’s business license tax, which is based on a percentage of total gross receipts, for 12 months.

“I’ve had some calls on this and people are concerned that we are in deficit spending and we’re giving away permits,” said Councilwoman Margie Rice, who supported the measure along with the rest of her council colleagues.

The city will end the 2014-15 fiscal year with a projected $3.1 million deficit.

According to a staff report, the city registered 97 new businesses in May 2014, which generated $16,612 in fee revenue this fiscal year.

How much fee revenue the city won’t collect as a result of the tax holiday will depend on what kind of businesses participate in the program and their gross receipts, or total sales, within that 12 month period.

Contact Thy Vo at thyanhvo@gmail.com or follow her on Twitter, @thyanhvo.

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