Home Businesses Now Legal; Taxes Forgiven

On the same day home businesses became legal, the Los Angeles City Council voted Wednesday to forgive the penalties for those businesses that have failed to pay taxes.

The amnesty program, which began Wednesday and extends through June 5, applies to all tax penalties that home business owners have failed to pay in the past.

In November, the City Council voted to legalize home-based businesses, bringing the city in line with 77 others in the county that have already recognized such operations.

The law took effect Wednesday, allowing home business operators, such as lawyers, accountants and writers, to operate legally from home.

Under the measure, the city imposes 21 performance standards, prohibiting excessive noise, traffic, signs and other changes that would ruin the character of single-family neighborhoods.

Although home businesses have illegally operated throughout the city for years, the city clerk’s office has required those operations to pay a business tax. The amnesty program was intended to encourage home business operators to begin paying the tax.

City officials estimate that 20,000 home business operators will become legal, paying between $2.5 million and $4 million in business taxes. The amnesty program could forgive between $1 million and $1.6 million in penalties, according to city estimates.