If you are self-employed, your business address is outside the City of Los Angeles and you work within the City of Los Angeles for seven days or more in a calendar year, you are considered an eligible business and must apply for a Business Tax Registration Certificate.
Most activities conducted within the City for gain or benefit are considered engaging in business and subject to business tax. Specifically, the Los Angeles Municipal Code (LAMC) defines “business” as any activity, enterprise, profession, trade or undertaking of any nature conducted or engaged in, or ordinarily conducted or engaged in, with the object of gain, benefit or advantage, whether direct or indirect, to the taxpayer or to another or others. The term shall include operations of subsidiary or independent entities conducted for the benefit of others and at no profit to themselves, nonprofit businesses and trade associations. A person shall not be deemed to be engaged in business solely by reason of receipt of dividend or interest income from passive investments (LAMC Section 21.00, Subsection (h)).
You may be eligible for a variety of business tax exemptions. Learn more here.
Do You Qualify for the Small Business Tax Exemption?
In order to qualify for the Small Business Tax Exemption, a small business must have tax measures that do not exceed $100,000 for the previous year in taxable and nontaxable gross receipts from within and out of the City of Los Angeles (worldwide). No tax is required to be paid by any small business, provided that the small business files a timely renewal. Taxpayers who do not file a renewal timely under LAMC Section 21.29 are considered delinquent, will not qualify for the Small Business Exemption, and will be required to pay taxes that would otherwise be due.
Do You Qualify for the Creative Artists Exemption?
"Creative Artists" is not a business tax classification, but rather is an exemption granted to certain people who meet the definition of a creative artist as defined by the Business Tax Ordinance. While there are many creative people in Los Angeles, the Creative Artist Exemption only applies to those who make $300,000 or less annually when performing "creative activities" for "entertainment or aesthetic purposes." It only applies to those receipts the creative artists earn from their creative activities and does not include income from any non-creative activity,which is still liable for taxes. The Creative Artist Exemption is only valid with timely renewal of the BTRC.
Interested in Growing Your Revenues by Contracting with the City?
The City purchases billions of dollars of services each year. And it wants to do business with YOU!
Look around the City and you will see everything from potholes being filled, transit lines being operated, fire stations being built, after school programs being managed, and the streets being kept safe from crime. What you may not know is that in providing these services to the Los Angeles, the City purchases billions of dollars every year in supplies, equipment, and professional/personal services. That’s billions of dollars for which YOUR business can compete!
This guide has been prepared to serve as an introduction to the City contracting process and a reference guide for your business growth. In it, you will find information about:
- Contracts 101 - Understanding the different types of City contracts
- Vendor Requirements - Becoming competitive in the City marketplace
- Certified for Success - A Primer on City certification
- Get to know BAVN - The City portal for contract opportunities
- Navigating the City - Get to know your City partners
- Staying Current - Important Dates for the City
The Contractor's Handbook