Upland’s most successful businesses would see the cost of their city business licenses jump by a whopping 3,240 percent, from the current $864 to $28,000, if a majority of the city’s voters support a measure the Upland City Council on August 3 placed on the upcoming November ballot.
All five of the council’s members – Mayor Bill Velto, First District Councilwoman Shannon Maust, Second District Councilman James Breitling, Third District Councilman Carlos Garcia and Fourth District Councilman Rudy Zuniga – voted to place a measure revamping the city’s business licensing regulations, including the pricing schedule on yearly registrations on the November 3 ballot.
Two years ago, the Upland council initiated a similar move, only to lose its nerve in the face of questions about what it was trying to accomplish. On July 22, 2024, the council voted to send to the San Bernardino County Registrar of Voters a measure revising the city’s business license schedule for inclusion on the November 5, 2024 ballot. While that plan called for making a modest $4 reduction in the cost of a business license for 2,930 of the city’s 3,083 business grossing under $100,000 per year, it entailed a somewhat complicated formula for calculating any particular business’s licensing fee, such that 618 of the city’s 2,049 businesses making over $100,000 but less than $1 million per year and 18 of the 596 business in the city making over $1 million per year were also to see their annual licensing fees reduced, while, 153 businesses making under $100,000, 1,422 businesses making $100,000 to $1 million and 578 businesses making over $1 million per year would have their taxes increased. The measure, if passed, would have meant that those operations in the top earning brackets would have seen their permits to conduct business in the city jump from $864 to $29,500, subject to an annual consumer price index increase of up to 5 percent per year.
There was an immediate outcry, particularly as city officials had waited to what was virtually the last minute prior to the deadline to submit a ballot measure to the county registrar of voters’ office, providing no realistic opportunity to discuss the terms, conditions or effects of licensing cost increases that were to be voted on and no opportunity for adjustment or compromise. The city withdrew the ballot measure.
The city council instead put a sales increase proposal measure on the ballot, which like a similar measure on the 2022 ballot, was rejected by the city’s voters.
Just as it had two years ago, the city council again waited until the 12th hour to consider and vote on an item calling for a revamping of the business licensing schedule it has had in place for more than three decades.
At its August 3, 2026 meeting the city council resurrected the effort to convince the city’s residents they should radically increase the business fees of a relative handful of businesses as a ploy to increase revenue flowing into City Hall.
According to city staff, the city’s business license tax structure in place since 1994 goes too easy on larger businesses which bring in far more money than more modest operations. Essentially, all businesses, large and small, they said, pay the same licensing fee. The city categorizes 4,975 of the 5,993 businesses in the city as “small,” i.e., showing a profit of $500,000 or less, according to gross receipts.
Under the terms contained in the measure to go before voters in November, the city’s more profitable businesses will be hit for what officials said was “their fair share,” while the licensing fees to be paid by 3,296 of them will be reduced.
The measure calls for raising the maximum business licensing fee from $864 to $28,000, a figure only somewhat less daunting than the proposal contained in the measure proposal in 2024 that was ultimately withdrawn. The measure would also up the minimum licensing fee from $54 to $75 It would also levy on storage facilities a new burden of $50 per storage unit.
Supposedly, a business with $100,000 in gross receipts pays $64.80 for a business license; one that makes $200,000 pays $129.60 for a business license; one that makes $300,000 pays $194.40 for a business license; one that makes $400,000 pays $259.20 for a business license; one that makes $500,000 pays $324 for a business license; one that makes $600,000 pays $388.80 for a business license; one that makes $700,000 pays $453.60 for a business license; one that makes $800,000 pays $518.40 for a business license; one that makes $900,000 pays $583.20 for a business license; one that makes $1 million pays $648 for a business license; one that makes $1.1 million pays $712.80 for a business license; one that makes $1.2 million pays $777.60 for a business license; one that makes $1.3 million pays $712.80 for a business license; one that makes $1.3 million pays $842.40 for a business license. All businesses that make 1.33 million or more pay a uniform $864 per year for the right/privilege to operate in the City of Upland.
Under the reform, the city’s businesses would be divided into five categories, those being retail, service, professional contractor and rental. Curiously, this cataloging does not include manufacturing, warehousing or agricultural.
According to a chart provided by the city, the current tax for retail, service, contractor and rental businesses is pegged at 0.054 percent after the first $200,000 of gross receipts. The current rate for businesses categorized as “professional” was given as “cost per employee,” with no further specification. The chart provided a somewhat confusing set of taxing or fee models – 3a, 3b, 3c and a repeat of 3c – without specifying which model would actually go into effect if the measure were to be adopted. According to the chart, the model 3b rate was what was “previously recommended.” This appeared to be the rate that was proposed in 2024, but which was ultimately withdraw. The first 3c model applies to 2027 and the second 3c model appears to be what would be in effect from 2028 onward.
Under the 3a model, retail businesses would pay 0.1 percent of sales, presumably after the first $200,000; service businesses would pay 0.2 percent of income, presumably after the first $200,000; professional oriented businesses would pay 0.3 percent of income, presumably after the first $200,000, contractors would pay 0.2 percent of income, presumably after the first $200,000 and rental businesses would pay 0.3 percent of income, presumably after the first $200,000.
Under the first 3b model, retail businesses were to have paid 0.075 percent of sales, presumably after the first $200,000; service businesses were to have paid 0.17 percent of income, presumably after the first $200,000; professional oriented businesses were to have paid 0.175 percent of income, presumably after the first $200,000, contractors were to have paid 0.2 percent of income, presumably after the first $200,000 and rental businesses were to have paid 0.3 percent of income, presumably after the first $200,000.
Under the first 3c model, to be effective in 2027, retail businesses would pay 0.06 percent of sales, presumably after the first $200,000; service businesses would pay 0.09 percent of income, presumably after the first $200,000; professional oriented businesses would pay 0.09 percent of income, presumably after the first $200,000, contractors would pay 0.1 percent of income, presumably after the first $200,000 and rental businesses would pay 0.15 percent of income, presumably after the first $200,000.
Under the second 3c model, to be effective in 2027, retail businesses would pay 0.065 percent of sales, presumably after the first $200,000; service businesses would pay 0.125 percent of income, presumably after the first $200,000; professional oriented businesses would pay 0.125 percent of income, presumably after the first $200,000, contractors would pay 0.15 percent of income, presumably after the first $200,000 and rental businesses would pay 0.2 percent of income, presumably after the first $200,000.
There was no explanation given as to the disparity of percentages in the models or the disparity in ratios between the business types from model to model.
Without using as many words, Mayor Velto and the members of the city council said they were scapegoating the most successful portion of the business community because of the city’s financial challenges. Despite the acknowledgments from the council that that city is behind the eight-ball, the documentation provided with the proposal to put the measure on the ballot stated, in justification for increasing the burden on a select minority of the city’s businesses, that “The City has a longstanding history of strong fiscal stewardship of public funds.”
According to that documentation, “The city adopted a balanced budget, however there is a structural deficit of $5.7M (FY 27) and $6.1M (FY 28) One-time fixes and $8.5 million from reserves – which are from the city’s rainy-day funds (Economic Uncertainty Fund) – will be used in the next two years. The City has $241 million in unfunded infrastructure liability for its streets and sidewalks. Without the measure and the locally controlled funding it would provide, the city would need to make $4 million in future cuts to essential local services.”
That documentation celebrated the measure as a solution that “only applies to businesses in Upland” and a means to “not raise taxes for residents or homeowners.”
According to the documentation, if the city’s residents approve the measure, the city will realized $634,888 in revenue from the business license fees imposed on businesses making $500,000 or less, $1,009,825 from businesses doing $500,000 to $3 million of business annually and $1,701,070, from those businesses taking in over $3 million a year. This would boost the city’s business tax revenue, which is separate from the sales tax revenue it receives, to $3,345,783 annually, a $2,157,796 over the $1,187,987 in business license fees it currently takes in.
One thing that makes city employees and the city council enthusiastic about the financial solution the measure represents is that those who will be hit hardest by the tax/fee increase do not have the political muscle to resist it. Upland Assistant City Manager Stephen Parker, whose line of expertise is in city finances, said there were a mere nine businesses operations in the city who fall into the $28,000 business license fee category. Half of the city’s retail businesses bring in $117,000 or less per year. Only 78 retail businesses in the city have more than $4.1 million in gross receipts annually. In this way, city officials believe, those who will object to the business license fee increases will be vastly outnumbered by those who will not be personally impacted by it.