New Business Tax on REALTORS in Manhattan Beach?

In mid-August, the City of Manhattan Beach once again announced it would levy a business tax on REALTORS®. Called a “punitive tax” by a member of the Manhattan Beach City Council, this tax comes at a bad time in the economy – and even in a good economy, the City has no legal authority to impose this tax.

If you live or do business in Manhattan Beach, come to the September 21 City Council hearing. If you live or do business in another city, remember that a change in business taxes could affect you too. Different cities have different ways of collecting business taxes, however we urge cities to remember these key points:

• REALTORS® in California cannot legally work without a broker, and as such cannot operate as independent contractors for business tax purposes. REALTORS® should not be taxed as independent contractors for the purpose of a business license.
• New taxes on REALTORS® may need voter approval, according to Proposition 218. Cities do not have the authority to simply impose a new business tax.

SBAOR has been at the forefront of this issue since last April. Media coverage includes the Daily Breeze (August 29), the Beach Reporter (August 26), and Manhattan Beach Patch (September 2).

Watch this space for additional updates on business taxes as the hearing date approaches.