Doing business in Los Angeles? You may owe tax

Your Guide to State, Local, Federal, Estate + International Taxation

Los Angeles, business tax, state and local taxIf you conduct business in Los Angeles, you may be required to register and pay a local business tax. For business tax purposes, you are considered to be engaged in business in Los Angeles if you perform work for at least seven days per year within the city. There are a few exceptions, which you may find listed on the Department of Finance’s website. There are also exemptions for new and small businesses. Even if you qualify for an exemption, you will need to register and obtain the proper exemption.

Those individuals or entities required to register and file with the Los Angeles Office of Finance need to file an annual renewal by the end of February. This can be done online or by visiting a local office. The amount of tax due is based on your gross receipts from the previous reporting period. For example, a calendar year business filing a 2017 renewal in January or February of 2017 will pay tax based on the gross receipts during the calendar year 2016.

The amount of tax you will owe depends on your type of business and how much income was earned. For example, those categorized under Professions and Occupations, such as architects, engineers and consultants, are taxed under LAMC Section 21.49. For tax year beginning January 1, 2017, tax is $4.50 per $1,000 of taxable gross receipts. You may view all tax rates here.

Please contact a qualified tax professional to assist with all your federal, state and local tax needs. This information is general in nature and should not be relied upon.

Jill A. Helm, CPA