Cupertino council holds off on proposed ‘head tax’ on Apple, other businesses

The Vallco Specific Plan cleared its first hurdle at the ERC Meeting on August 31.The Vallco Specific Plan cleared its first hurdle at the ERC Meeting on August 31.

The Cupertino City Council voted unanimously Tuesday against placing an employee tax on large businesses to fund transportation needs on the November 2018 ballot this year, with members expressing a desire to further study the proposal.

Council voted to defer consideration of the so-called “head tax” proposal to the November 2020 election. Council directed staff to undertake further study of exactly what transportation improvements would be funded by such a tax measure, and to consult with companies like Apple on how to best achieve desired transportation improvements through public-private partnerships.

The tax measure proposed by city staff would restructure Cupertino’s business license tax system from a tax based on square footage to a tax based on number of employees. The current system is expected to generate an estimated $800,000 in fiscal year 2017-18. The two employee-based tax models proposed by staff at Tuesday’s council meeting were estimated to generate $8 million and $10 million in general tax revenue for the city, respectively. The proposals would impose a tax on companies of up to $425 per employee for businesses with more than 99 employees.

The Cupertino Chamber of Commerce has echoed the need for a participatory process to develop a transportation plan with specific projects that meet the region’s transportation needs.

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