Los Angeles Business Tax Break Proposed

Los Angeles' mayor today proposed an expansion of the City of Los Angeles' new business tax exemption, from two to three years, assuming gross revenues of less than $500,000:

Tax Break for New Businesses Proposed, Los Angeles Business Journal, June 15, 2010

Los Angeles Business Tax Amnesty Program Announced

The City of Los Angeles agency responsible for the administration and collection of business taxes, the Office of Finance, has announced a tax amnesty program. Non-compliant businesses will still have to pay the base tax and interest due, but an automatic waiver of the usual penalty will apply (without the amnesty program, penalty waivers can be requested, but they are discretionary with the Office of Finance):

Tax Penalty Amnesty Program
Chapter II, Article 1.12, Sections 21.12.1 - 21.12.7 of the Los Angeles Municipal Code provide for the development and implementation of a Tax Penalty Amesty Program. This program, beginning May 1, 2009 and ending July 31, 2009, allows taxpayers to avoid tax penalties imposed on any taxes as a result of nonreporting, underreporting, underpayment, or nonpayment of certain taxes. Tax Penalty Amnesty is applicable to (1) Business Taxes; (2) Telephone, Electricity, and Gas Users Taxes; (3) Commercial Tenants Occupancy Taxes; (4) Transient Occupancy Taxes; and (5) Parking Occupancy Taxes.

To participate in the program, taxpayers must file an application for tax penalty amnesty during the specified dates and comply with two conditions:

1.File completed tax statements or returns for all periods and taxes for which the taxpayer has not previously filed a tax statement or return and/or file completed amended tax statements or returns for all periods for which the taxpayer underreported the taxes due; and
2.Pay in full all principal, interest, and any applicable fees (excluding penalty fees) due.
The Tax Penalty Amnesty Program is an opportunity to pay delinquent City taxes and avoid up to forty (40%) in penalties. To take advantage of the amnesty program, please visit one of our offices or call the L.A. Tax Amnesty Hotline at (213) 978-1555 weekdays from 8:00 am to 5:00 pm.

More information and applications forms available here: http://www.lacity.org/finance/amnesty/index.html

Hilton Hotels Leaves Beverly Hills, California To Lower Its Cost of Doing Business

Hilton Hotels Corp., which last month announced it was leaving Beverly Hills, said Wednesday it had chosen Fairfax County, [Virginia], as its new corporate home.

Hilton, which wants to lower its cost of doing business .... [intends to] create more than 300 full-time jobs in Fairfax County within the next 36 months.

Hilton Selects D.C. Suburb for New Home, Los Angeles Business Journal, February 4, 2009

See also: California Scheming and Some Californians Flee State for Greener Pastures

818 Area Code Overlay with 747 Area Code Begins in 2009

The California Public Utilities Commission (CPUC) has forecasted that the 818 area code (San Fernando Valley, California) will run out of telephone numbers in the third quarter of 2009 and has therefore announced an overlay with new area code 747; that is, as is the case with the old 310 and new 424 area codes, both area codes will exist in a single geographic area, with most new telephone numbers assigned receiving the new 747 area code.

Because an 818 and a 747 telephone number may therefore be in the same house or office building, ten-digit dialing (dialing the area code plus the number) will become mandatory in the 818 area code, effective April 18, 2009. The advantage of an overlay rather than a split is that any person or business with an 818 number will be able to keep that number, and no decision has to be made as to what geographic are retains the 818 area code and what area must adapt the new area code. Public hearings showed the public favored the overlay solution.

Cities in area code 818 include Agoura, Agoura Hills, Arleta, Calabasas, Canoga Park, Chatsworth, Encino, Glendale, Granada Hills, Hidden Hills, La Cañada Flintridge, Lake View Terrace, Mission Hills, North Hills, North Hollywood, Northridge, Pacoima, Panorama City, Reseda, San Fernando, Sherman Oaks, Studio City, Sunland, Sun Valley, Sylmar, Tarzana, Toluca Lake, Topanga, Tujunga, Universal City, Valley Village, Van Nuys, West Hills, Westlake Village, Winnetka, Woodland Hills, and of course "Media Capital of the World" Burbank.

More information: CPUC 818 Area Code Change Information

California Legislature Plans To Increase Taxes Amid Recession

State Democrats Plan To Increase Taxes, Los Angeles Times, December 17, 2008:

Democratic legislative leaders are planning to use a series of complex legal maneuvers to raise Californians' gas, sales and income taxes over the objection of Republican lawmakers, who have been able to block such proposals in the past.

Under the Democrats' plan, sales taxes would increase by three-fourths of a cent. Gas taxes would go up by 13.5 cents per gallon. And a surcharge of 2.5% would be added to income taxes.

More coverage: California Democrats Devise Plan To Hike Taxes:
By structuring them as fees, they would skirt GOP opponents and raise $9.3 billion; A court fight looms, Los Angeles Times, Decemeber 18, 2008.

See also:

Study: Los Angeles, Santa Monica Among 10 Most Expensive Places to Do Business in United States

2009 California Employer Payroll Tax Rates

Study: Los Angeles, Santa Monica Among 10 Most Expensive Places to Do Business in United States

And predicted to get worse. Westlake Village rated most business friendly in Los Angeles County. The Daily News reports:

The city of Los Angeles will finish 2008 in familiar company: Among the 10 most expensive places in the country to do business, according to a study released today.

Santa Monica is also on the list compiled by the 14th annual Kosmont-Rose Institute Cost of Doing Business Survey released by the Rose Institute of State & Local Government at Claremont McKenna College.

Los Angeles' placement on the list has remained steady, but at least it hasn't gotten any worse in the past year, according to Larry Kosmont, the survey's founder and president and chief executive officer of Kosmont Companies.

"Cities that charge the highest license fees such as Los Angeles, Philadelphia, and Cincinnati are often those that have a history of uneven relations with the business community," Kosmont said.

But Robert "Bud" Ovrom, Los Angeles' deputy mayor of economic development and housing, said the city is making progress.

For example, next year the city starts the final phase of a five-year plan to reduce the business tax by 15 percent. The final installment, a 3.9 percent reduction, kicks in Jan. 1.

"When I'm talking to companies I almost never hear about business taxes. I don't even hear much about workers' comp," Ovrom said.

"Everything I hear today is (about) the quality of the work force, schools, traffic and affordable housing." ....

On the contrary, the author's clients are more concerned with the high costs of state business taxes,* local business taxes, regulation, and workers' comp. Perhaps Ovrom's conversations are primarily with larger companies...? The article continues:

Los Angeles is challenging for businesses because of its fee and tax structure, it said. And while California cities are more competitive than in the past few years, costs for businesses remain high.

It also noted that Los Angeles County continues to be one of the nation's most expensive places for business and 10 of its cities are among the 50 most costly. The Bay Area is pricey, too.

The situation will worsen next year, Kosmont said, as voter-approved tax and fee increases kick in.

"What is happening in California is the cities are going to the ballot box and winning tax increases," Kosmont said. "Some of these cities were Los Angeles County cities. That makes a bad climate even worse."

Kosmont said that California and many of its cities have been expensive for a long time, but some have tried to compensate with aggressive economic development and redevelopment programs.

But now all are struggling with the state's budget deficit, which is the largest in its history.

The survey compares 402 cities nationwide based on the array of taxes and fees each imposes. They include sales, utility, income, property, and business taxes....

It noted that the highest-cost cities, such as Santa Monica and Oakland, cluster around the aging urban cores, while newer bedroom communities in the outer suburbs charge developers for their growth and pass on the savings to businesses to stimulate their economies.

For example, Kosmont said the least costly city in the county is Westlake Village.

"It has no business tax, no utility tax and very low property taxes.

So it is one of the bargains," Kosmont said.

That's by design, said City Manager Raymond B. Taylor.

"We have strived to be one of the most business-friendly cities in California since our inception in 1981," Taylor said.

About 8,800 people live in the city that abuts the Ventura County line. But there are 850 businesses in the village that generate 11,000 jobs.

"The city recognizes the value and the role that businesses play in terms of job development and the vibrancy of the community," Taylor said.

* A domestic corporation in Utah costs a minimum of $100 in annual franchise tax payable to the state for the privilege of doing business as a corporation in the state; in California, $800, among the highest cost in the nation.

See also:

California Legislature Plans To Increase Taxes

2009 California Employer Payroll Tax Rates