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A critical first step when considering a local tax is to review state law to determine what kinds of taxes are authorized for local governments in your state. Whereas states have broad authority to impose almost any type of tax, local governments can only impose taxes that have been specifically authorized by the state legislature or state constitution. Some states grant relatively broad authority for some local taxes (such as business license taxes, which are allowed in every municipality in California), whereas other states require specific state enabling legislation for each local tax. Therefore, it is essential that any local jurisdiction considering a tax consult with a local municipal tax expert to ascertain the available tax options. When crafting a tax law, there are numerous policy considerations that will affect the scope and breadth of the tax, and also the disposition of the proceeds. This document discusses these critical policy considerations, including the effect of adopting different provisions; legal, administrative, and political considerations; and other factors.