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Attention business owners and those doing business in the City of Los Angeles. In order to take advantage of possible exemptions, you must register and file your renewal by March 1st—details below!
If you are conducting, operating, managing or carrying on a business within the City of Los Angeles, you are considered to be “engaging in business” and subject to business tax. You must register and file your taxes annually with the Office of Finance. Individuals, independent contractors, and home-based businesses are also subject to this provision. The City initiated AB63 Program several years ago to discover businesses that file tax returns with the State of California and have a Los Angeles address, but are not registered to do business with the City of Los Angeles. Below is a summary of the program from the website:
Under state legislation, the City has access to basic tax information provided on State income tax returns filed with the Franchise Tax Board. This information is used to identify businesses that owe City business taxes to help pay for critical City services, establish a fairer business tax system, and fund future business tax reform and affordable housing. The AB63 Program has resulted in significant revenue for the City of Los Angeles with more than 76,000 new business tax accounts and over $76 million in revenue since inception in 2002. Under state legislation, the local sharing program sunsets in 2011.
The bottom line: if you file a Schedule C on your individual return and you live in the City of Los Angeles, you need to register with the City. There are several exemptions available to new and small businesses, as well as industry specific exemptions. In order to take advantage of these exemptions, you must register and file your renewal by March 1st.
Below are links to the website of the City of Los Angeles Department of Finance and some specific links that pertain to registering your business. Please contact our office if you have any questions regarding the Business Tax Renewal. We offer services from registering businesses to filing the renewals.
City of Los Angeles link on tax reform:
City of Los Angeles AB63 Program (i.e. how the City is finding businesses that are not compliant):
City of Los Angeles Department of Finance website homepage: