LOS ANGELES : Tax Break for Entertainment Firms Held for More Study
Concerned over potential accusations of favoritism and hastiness, the Los Angeles City Council balked Wednesday at granting tax breaks to entertainment companies in Hollywood and North Hollywood, opting for further study of a measure that could cost the city $800,000 a year.
Despite a stern warning from Councilwoman Jackie Goldberg that Los Angeles is “daily losing” large multimedia corporations to nearby cities such as Burbank and Glendale, the council sent her tax-relief proposal back into committee for at least a week, citing a need for additional analysis.
The measure seeks to cap taxes for entertainment companies at $25,000 or 10% of its current tax liability, whichever is greater. Under that formula, corporations now paying the most would reap the greatest benefits. For example, a firm that ordinarily owes $40,000 in taxes would be billed $25,000, a savings of $15,000, whereas a larger company accustomed to paying $300,000 would owe only 10% of that, or $30,000--a savings of $270,000.
A staff report said at least 23 companies would currently be affected by such a tax-relief measure to the tune of about $800,000 total.
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