City’s Tax Amnesty Program to Expire

Los Angeles business owners who have failed to pay city taxes have until Tuesday to sign up for an amnesty program to avoid penalties.

After Dec. 31, the city will use state Franchise Tax Board records and other data to track down the estimated 60,000 businesses that have not registered or paid taxes as required by law, city officials said.

“Penalties [for failing to register] can add up to 40% of your tax bill, so it’s really to a business’ benefit to come forward and get registered,” said Steve Rubin, assistant director of the city’s Office of Finance. “It would be a good business decision.”

The city’s last business tax amnesty program brought in an additional $20 million and added 14,000 businesses to the tax rolls. Currently, about 235,000 firms pay a total of $345 million a year in taxes, which help fund city services.

Every person who runs a business within the city is required to register and either pay city taxes or obtain an exemption.

The tax owed depends on the type of business. For example, professionals such as attorneys and architects owe $106.43 each year for the first $18,000 or less in gross receipts, plus $5.91 for each additional $1,000 in receipts. Retail sales businesses owe $110.86 each year for the first $75,000 in gross sales, plus $1.48 for each additional $1,000 of receipts.

Not all businesses end up owing taxes. The city waives the first year’s taxes for many new businesses. Small businesses that have less than $5,000 in gross receipts also pay nothing.

Information on the amnesty program is available by calling the city finance office at (213) 368-7000 or going to its Web site at www.lacity.org/finance, which also has forms.