The City of Los Angeles has announced a tax amnesty program that began on September 1, 2013 and will continue through December 2, 2013. This amnesty includes the following City of Los Angeles taxes: Business, Utility Users Taxes, Commercial Tenant’s Occupancy Taxes, Transient Occupancy Taxes, and Parking Occupancy Taxes.
Amnesty Qualification Requirements
To qualify for the Tax Amnesty all of the following requirements must be met between September 1, 2013, and December 2, 2013
Following this amnesty period, the Office of Finance will vigorously pursue a range of enforcement actions, as applicable, such as:
Application of the City Business License Tax
The category of taxpayers subject to the business license tax is quite broad. For example, the City of Los Angeles holds that the business license tax is applicable to every person engaged in any trade, calling, occupation, vocation, profession, or other means of livelihood within the City. Moreover, businesses that do conduct business within the City but are based outside the City may be subject to the tax if they physically perform work within the City for seven or more days per year.
Many parts of the City of Los Angeles are referred to by their district name rather than as Los Angeles; for example, Woodland Hills is within the City. Accordingly, a taxpayer should first confirm whether it is subject to these taxes. Additionally, a taxpayer should be careful in identifying the appropriate business classification as the classification determines the tax rate. Finally, the business license tax is a tax based on in-city activity measured by gross receipts associated with that activity. The City has issued a number of rulings that guide taxpayers on how to determine the amount of gross receipts subject to measurement. Taxpayers should review these rulings especially if they have activity in the City but seemingly little in-city gross receipts or if there are significant amounts of gross receipts but limited activities.