Paying Business Taxes in L.A.
Question: As a sole proprietor, I got a confusing business tax bill from the city of Los Angeles based on my state tax return. Do I have to pay? What forms do I need to file to avoid penalties for missed deadlines?
Answer: Every business within the city of Los Angeles must obtain a “tax registration certificate” and renew it annually.
Most businesses must pay minimum annual business taxes between $100 and $200, unless they qualify for exemptions for new businesses and small-business owners, said Roberto Barragan, president of the Valley Economic Development Center.
“If you have gross sales below $50,000 or you’re in your first year of doing business and have receipts less than $500,000, you’re exempt from the tax,” he said.
“In order to get the exemption, you must register, get a tax registration certificate and make timely annual renewal filings with the city,” he said.
Construction companies and film producers are not eligible for this new-business exemption. Bigger businesses pay more.
Businesses that don’t renew their certificates each year between Jan. 1 and the first business day of March are considered delinquent and ineligible for exemptions for that year.
So, the bad news: If you haven’t filed for a 2006 tax registration certificate by now, you probably will be considered delinquent for 2006 and you may owe taxes, plus penalties and interest.
There is some good news, however: The exemption for small businesses will go up to $100,000 in annual gross receipts on Jan. 1. If your sole proprietorship doesn’t earn more than that this year, and you renew on time next year, you won’t owe anything for 2007, Barragan said.
Apply for a tax registration certificate at Los Angeles City Hall or at one of seven satellite finance offices listed here: www.lacity.org/finance/finF.htm.
You also can download a form at www.lacity.org/finance/finA6a.htm and then e-mail it back.
Using Direct Mail to Advertise Online
Q: I have a website and products that I want to sell online. How do I advertise using direct mail on the Internet without spamming people?
A: Create a list of current customers and prospects willing to get e-mails about your products. If you have a customer database, start there.
Also begin capturing contact information from your website visitors, even those who don’t place orders, suggested Sharon Berman of Los Angeles-based Berbay Corp., a marketing consultancy.
“Place a box on your site that says, ‘Sign up here if you’d like to know about our sales and specials,’ or have them sign up for an e-mail newsletter you write and distribute that examines industry trends and helpful hints,” she said.
Make sure that any e-mails you send give recipients the ability to opt out.
Remember, just because you’re selling online doesn’t mean that online marketing is your most effective tool: Powerful spam filters often block even wanted e-mail. “Effective marketing is a mix of tactics,” Berman said.
She recommended a combination of direct mail and e-mail. “Research I’ve seen shows that e-mail is more effective reaching those who know you, while snail mail is more effective when prospecting,” she said.
Depending on your marketing budget, you might investigate “pay-per-click” ads on search engines such as Google or Yahoo. These are the ads that appear when you select certain search terms. Prices for this vary widely. You pay when someone clicks on your ad, so make sure you know what to expect price-wise before you start.
If your company isn’t showing high up on search engines, investigate the process of “search engine optimization.”
When potential customers search via a computer for a business of your type, you want yours to show up as quickly and prominently as possible.
Got a question about running or starting a small enterprise? E-mail it to karen.e.klein @latimes.com or mail it to In Box, Los Angeles Times, 202 W. 1st St., Los Angeles, CA 90012.
