SMALL-BUSINESS Q&A: Understanding tax rates for firms in L.A.

Dear Karen: I’m self-employed and work from home. Why does Los Angeles tax me on my revenue of $600,000 rather than on my profit of $50,000?

Answer: The Los Angeles Municipal Code sets business tax rates by gross receipts and business classification. For instance, if you’re a child-care provider, your 2009-10 city tax is $1.01 per $1,000 of gross revenue.

Small businesses grossing less than $100,000 annually pay no city tax, thanks to a 2007 exemption. The current tax rates for companies grossing more than $100,000 are posted on the website of the city’s finance office, finance.lacity.org. Click “forms and publications” then “business tax rate table 2009-2010.”

Dear Karen: Do you have tips for increasing sales at a small-business website?

Answer: Provide a live chat option that enables shoppers to get immediate information about your products or services. “A recent study found that 82% of survey respondents said a live chat session positively influenced their attitude about that merchant, and 68% were more likely to purchase from that retailer again,” said Eddie Davis, a senior director for small business services at PayPal Inc.

Use free tools like Twitalyzer and TweepSearch to find out what people are saying about your business online. “Once you have a sense for what the conversation is like, you can respond, showing your customers that you care enough about their opinions and viewpoints to seek them out and interact with them,” Davis said.

Small-business questions? E-mail Karen at smallbiz@latimes.com