In a recent government meeting, officials discussed the potential implementation of a square foot tax aimed at addressing revenue shortfalls from property taxes, particularly concerning port-owned warehouses that currently do not contribute to property tax revenues. The proposed tax would apply to warehouses exceeding a specified square footage threshold, with examples from other cities indicating rates ranging from $0.10 to $0.15 per square foot per quarter.

The discussion highlighted that while some local businesses pay significant property taxes, many port-owned facilities do not, leading to a disparity in tax contributions. The square foot tax would not consider property tax status, meaning both tax-exempt and taxable properties could be subject to this new levy. The proposed threshold for taxation was debated, with suggestions ranging from 4,000 to 5,000 square feet.

Council members expressed concerns about the potential impact on local businesses, questioning whether the new tax could drive them away. They also discussed the importance of ensuring tax equity between businesses on different sides of the street, particularly in light of varying property tax burdens.

The estimated revenue from a square foot tax set at $0.10 per square foot could generate approximately $621,000 annually, although this figure would be adjusted based on existing business and occupation (B&O) tax offsets. The council is considering mechanisms to adjust the tax rate over time to keep pace with inflation, ensuring that the tax remains relevant and effective.

Overall, the meeting underscored the complexities of local taxation and the need for a balanced approach that supports revenue generation while fostering a competitive business environment. Further discussions and evaluations are expected as the council moves forward with this proposal.