Ad Valorem Tax – Tax imposed as a percentage of the assessed value of real property; comes from the Latin for “according to value.” All ad valorem rates included in the Survey have been calculated as a percentage of the property’s full market value. Also known as “Real Property Tax.”
Art in Public Places Fees – Fees collected and used by the city to establish art on public land.
Assessment – The official act of discovering, listing and appraising property for ad valorem tax purposes.
Assessment Level – The percentage of the full value at which property is assessed as mandated by state law.
Business Improvement District (BID) – A group of businesses (typically retail) that decide to implement a new tax, which is collected by the city and used to pay for beautification or other improvements to increase area business (e.g. Landscape, Lighting, Maintenance Districts, Downtown BID).
Business Tax, Permit or Fee Waivers/Reductions – Reductions or waivers of business taxes for qualified businesses.
Businesses Taxes – Taxes assessed on businesses for the right to do business in a city. Also known as “Business Licensing Fees,” “Occupational Licenses,” “Privilege Taxes,” or “Franchise Taxes.”
Commercial Property Businesses – Establishments that rent/lease space to other businesses for profit (e.g. strip malls). Please note that commercial property business license fees are different from property taxes, which are based on the property’s value and are found elsewhere on the profile.
Crime Index – The total number of violent and property crimes committed in a city in a given year. Violent crimes include murder, forcible rape, robbery, and aggravated assault. Property crime includes burglary, arson, larceny, and motor vehicle theft.
Designation/Rate Code – The section of the municipal code in which the law that created and defines a given tax is found.
Development Impact Fees – Fees that developers pay to the city for construction including building permits, grading fees, etc. These fees are often charged to offset the city’s costs of providing services to a new development.
Direct Project Land or Development Subsidies – Government subsidies assisting with land and development.
Documentary Transfer Tax Rate – Tax on the recording, registration, and transfer of documents such as mortgages, liens, notes, and written obligations to pay money, deeds, and securities based on the property’s sale price. Businesses (or individuals) pay this tax to the county when they sell real estate. Also known as “Real Estate Transfer Tax,” “State Conveyance Tax,” or “Recorder’s Tax.”
Economic Incentives – Programs, discounts, or subsidies that cities, counties, or states may offer companies to attract their business or encourage them to act in a specific manner.
Employee – Individuals working for a company. Business license taxes may be assessed based on the number of individuals that a company employees. Many cities will either use a tiered system (e.g. if a company has between 25 and 50 employees, it pays $250.00), a per-employee rate (e.g. $15.00 per employee), or some combination thereof.
Equalization – The process of providing uniform aggregate assessments between townships and counties.
Equalized Value – The assessed value multiplied by the county and/or state multiplier. This calculation gives the value of the property to which the tax rate is applied.
Flat Rate – A fixed amount of money. Flat rate business license fees are the same for all businesses, regardless of the number of employees, the amount of profit or gross receipts, the total volume of sales, or any other variable.
Foreign Trade Zones – Sites in or near a U.S. Customs port of entry where foreign and domestic merchandise is considered international trade. Goods can be brought into a zone without formal Customs entry or without incurring Customs duties or excise taxes unless and until they are imported into the U.S.
General Office – Offices that do not include licensed professionals (e.g. offices with administrative assistants).
Gross Receipts – Total amount of money that a business brings in from sales, regardless of whether the business earns money on these transactions. This is different from profit, which subtracts all costs from the gross receipts. Business license taxes based on gross receipts only take into account how much the business takes in, and will often use either a tiered system (e.g. gross receipts between $100,000 and $200,000 will pay $150.00), charge a percentage of gross receipts (e.g. 1%), or some combination thereof.
Have Completed Transaction – The city already has this program in place or has approved such a transaction in the past. There may be existing procedures for applying for this economic incentive.
Industrial Development Bonds – Bonds issued by government entities on behalf of manufacturing or processing companies to finance qualified capital projects (e.g. tax-exempt financing for land and depreciable property).
Infrastructure – Public improvements that support development, including street lightings, sewers, flood control facilities, water lines, gas lines, telephone lines, etc.
Limited Access Freeway – According to the California Streets and Highway Code, a “divided arterial highway for through traffic with full control of access and with grade separations at intersections.” The Survey lists any limited access freeway within the city limits, as well as any freeway that provides reasonable access within a 5-mile radius.
Major Thoroughfare/Bridge Fees – Tolls on bridges or roads.
Manufacturing – Establishments that create products (e.g. factories).
Market Value – The most probable price, estimated in terms of money, which a property would bring in a sale between a willing buyer and seller under arms-length conditions.
Multiplier – A figure used by county and state officials and applied uniformly to all parcels within a township to “equalize” assessments between townships and counties so that all values reflect the same assessment level.
Notable Public and Private Transactions – Examples of ongoing or one-time business transactions that have taken place between the city and different corporations. These may include economically important or noteworthy businesses located within a city as well as major construction projects or business endeavors that companies thinking about relocating would be interested in knowing about.
Offsite Infrastructure Subsidies – Subsidies provided for business construction on raw land to help with initial costs such as brining water, installing sewers, and putting in roads, curbs, and sidewalks.
Parking Tax Rate – Tax on parking within city limits, usually charged for parking spots in parking lots or garages.
Payroll – The amount of money payments (salaries, wages, etc.) made to employees. Business license taxes may be assessed as a percentage of a business’ total payroll costs.
Personal Service – Establishments that do not primarily produce or sell anything. Instead they provide a personal service (e.g. beauty salons).
Professional Office – Offices that include licensed professionals (e.g. accountants, architects, attorneys, brokers, engineers, physicians, veterinarians).
Public Facilities Fees – Fees that developers pay to the city or county for the maintenance of public facilities such as libraries and parks, public services such as police and fire, and infrastructure such as sewer and water.
Redevelopment – Planning, development, redesign, clearance, reconstruction, or rehabilitation of all or part of a designated project area.
Redevelopment or TIF Financing/Reimbursements – Subsidies given to help redevelop sub-par areas.
Redevelopment Project Areas/TIFs – Defined project areas in which city-created redevelopment agencies have full power. These agencies can buy land, tear down buildings, and add freeways and roads to improve business in the area. Property taxes can also be capped and the additional revenue generated from the land at its increased value can be used to pay the bonds used to improve the land.
Residential Property Businesses – Establishments that specialize in private property (e.g. apartment complexes, hotels/motels). Please note that these business license fees are different from property taxes (which are based on the property’s value) and transient occupancy taxes, both of which are found elsewhere on the profile.
Retail – Establishments that sell retail goods to consumers (e.g. grocery store, clothing store).
Sales Tax – A tax imposed on the sale of retail goods. Can be assessed at the state, county, and/or municipal level.
Scheduled Traffic Impact/Trip Fees – Fees that developers or businesses pay related to road construction and improvements.
Signalization Fees – If a business generates or is expected to generate a large amount of traffic on existing streets, a city may assess signalization fees for erecting additional traffic lights. These fees may be assessed on an individual business or on all of the businesses within a special zone.
Special Assessment – A charge levied by a public authority to pay the cost of public improvements such as street lights, water and sewer infrastructure, landscape, etc.
Special Business Zone – An independent unit of local government organized to perform a single governmental function or a restricted number of related functions. Special districts usually have the power to incur debt and levy taxes; however, certain types of special districts are entirely dependent upon enterprise earnings and cannot impose taxes. Examples include water districts, flood control districts, hospital districts, fire protection districts, and transit authorities.
Special Incentive Programs and Services – Additional programs that cities have in place to attract business to their city, help new or small companies, or make the relocation process easier (e.g. Redevelopment Agencies, loan programs, sign rentals, tax credits).
State Enterprise Zones – Areas in which businesses are eligible for state tax credits or money to encourage job creation and capital investment. Created to encourage economic growth by increasing the number of businesses and jobs in the area.
Tax Assessor – The government official responsible for establishing the value of property for ad valorem tax purposes.
Tax Increment Financing – A tool whereby tax revenue increases are used to finance redevelopment. The increase in tax revenue due to redevelopment (difference in tax revenue before and after the project) can be used to pay off bonds issued to help pay for the project or to finance infrastructure improvements associated in the area that benefit businesses and the public.
Tax Rate [Property] – The levy divided by assessed value. The tax rate in the Survey is expressed as a percent, in terms of “dollars per $100 of assessed value.”
Tenant Improvement/Relocation Subsidies – Money given to firms to improve a building and/or cover costs related to making a space suitable for business. Often given to businesses moving into an unfinished building to help cover start-up costs related to installing walls, plumbing, lighting, etc. Relocation subsidies include money given to a company to help offset the cost of moving from a different city.
Transient Occupancy Tax Rate – Tax on hotel rooms; also known as “Hotel Tax” or “Lodger’s Tax.”
Unincorporated Areas – Areas and communities within a county that are outside the jurisdictional boundaries of incorporated cities. As such, they are not serviced by an incorporated city. County government serves as the “city” for these areas by providing basic municipal services such as law enforcement, zoning, building permits, libraries, parks, street maintenance, and traffic signals.
Utility Tax Discounts – Discounts or subsidies on utility user taxes that a business owes.
Utility Taxes – Taxes exacted on both privately and publicly owned utilities, separate from utility charges. They are generally measured by gross receipts, gross earnings, or units of service sold, either as a direct tax on consumers or as a percentage of gross receipts of utility taxes imposed by a government on its own utility. Utility taxes may be assessed on electricity, telephone and cellular service, gas, water, and cable. Also known as “Utility Franchise Fees.”
Wholesale – Establishments that sell bulk products to other businesses, who then sell them as retail goods to customers (e.g. print supplier to print companies).
Will Consider Transaction – The city may provide this economic incentive in specific parts of the city, or to individual businesses on a case-by-case basis.