Measure C: C – City of Costa Mesa, The Costa Mesa Fair Business License Reform, Small Business Protection Measure

In plain language

Measure C would change Costa Mesa's business license tax, which has not changed since 1985. Businesses pay this tax, but residents do not. Today, the most any business pays is $200 a year, no matter how much it earns. Under Measure C, businesses with gross receipts of more than $500,000 a year would pay 50 cents for every $1,000 of gross receipts. The most a business would pay is $15,000 a year, for businesses earning $30 million or more. Businesses earning $500,000 or less would not pay any more than they do now, and over 72% of businesses would see no change. The City Council could lower the rate for certain kinds of businesses if economic conditions justify it. The money would go into the general fund for city services. A YES vote approves the new tax rates. A NO vote keeps the current tax and its $200 cap.

Fiscal impact

50 cents per $1,000 of gross receipts for businesses earning over $500,000 a year, capped at $15,000 a year. The ballot question says about $5,600,000 a year until ended by voters. The impartial analysis says about $4.6 million a year more than today's tax receipts of roughly $1 million.

Impartial analysis

City of Costa Mesa Measure C Measure C, known as “The Costa Mesa Fair Business License Reform, Small Business Protection Measure” (referred to herein as the “Measure”) would amend Section 9-25 of Chapter I of Article 9 of the Costa Mesa Municipal Code, which was originally adopted in 1985 and has remained unchanged in the 41 years since then. This tax is charged to businesses using city services, but not to residents. Small businesses, those making $500,000 or less, would not pay any more tax than they do currently. The Measure would update the business license tax for businesses making more than $500,000 annual gross receipts, up to a maximum amount of $15,000 per year for businesses earning $30 million per year or more. The existing maximum tax is $200 per year no matter how much a business earns, resulting in small businesses paying a much higher proportion of their gross receipts than large businesses in the City do. Business license tax receipts in the City are currently approximately $1 million. The updated business license tax structure will remain the same for over 72% of existing businesses. For those earning more than $500,000 annually, the rate will be fifty cents per one thousand dollars of gross receipts, as already defined in the municipal code. The Measure was placed on the ballot by the City Council. The Measure provides that the City Council may reduce the tax rate for specific types of businesses if it determines that economic conditions affecting a particular type or size business justify reducing their tax. The City Council could subsequently revise the tax rate for such businesses, but not above the maximum provided in the schedule. The Measure is anticipated to raise an additional $4.6 million dollars annually, to be placed into the general fund to support 911 emergency, fire, and police response, crime prevention, homelessness prevention, street and pothole repair, park maintenance, attracting and retaining small local businesses, and other general city services. All funds received will be locally controlled and subject to annual public spending disclosures and audit, and will help the city maintain financial stability. A “no” vote would leave the existing business license tax in place and maintain the existing $200 cap adopted in 1985. THE ABOVE STATEMENT IS AN IMPARTIAL ANAL YSIS OF MEASURE C. IF YOU WOULD LIKE A COPY OF MEASURE C OR THE PROPOSED ORDINANCE, PLEASE CONTACT THE COSTA MESA CITY CLERK’S OFFICE AT [phone number omitted] AND A COPY WILL BE MAILED TO YOU AT NO COST, OR IT IS AVAILABLE ONLINE AT WWW.COSTAMESACA.GOV. Dated: July 30, 2026 s/ Kimberly Hall Barlow, City Attorney

Official ballot arguments

Filed for the official voter guide by each side, printed as submitted.

The official arguments will appear here once both sides’ arguments are on file.