The Office of Finance administers the City's tax laws; issues tax registration certificates and permits, and collects City taxes and fees. Most of the funds go into the City's General Fund to support essential services such as those provided by the Police and Fire Departments.
The Office of Finance is also an information resource for businesses and individuals relative to the City's tax and fee collection program.
Purpose of the Tax
The City of Los Angeles Business Tax is a privilege tax imposed for revenue purposes only to support the essential services the City provides. No attempt is made through the business tax to regulate the conduct of businesses, nor does the the issuance of a Tax Registration Certificate and the payment of the business tax authorize the conduct or continuance of any illegal business or of a legal business in an illegal manner within the City of Los Angeles.
Legal Action for Non-Compliance
Failure to obtain the required Tax Registration Certificate and pay all business taxes due is a misdemeanor unless the violation or failure is declared to be an infraction. Any violation that is designated as a misdemeanor may be charged by the City Attorney as either a misdemeanor or an infraction. Violations designated as a misdemeanor shall be punishable by a fine of not more than $1,000.00 or by imprisonment in the County Jail for a period of not more than six (6) months, or by both fine and imprisonment. Violations designated as an infraction shall be punishable by a fine of not more than $250.00 for each violation.
Each person shall be guilty of a separate offense for each and every day during any portion of which any violation of any provision of this code is committed, continued or permitted by such person, and shall be punishable accordingly. Please refer to Section 11.00 (m) of the Los Angeles Municipal Code and Sections 21.03, 21.12, 21.16, 21.19, and 21.20 of the Business Tax Ordinance for complete information.
How Taxes are Determined
Most business taxes are based on gross receipts. For those Business Tax Classifications, the tax rate is a specified amount per $1,000 of taxable gross receipts for each tax classification. Some business taxes are based on a flat rate per tax period and others are based on the number of vehicles, machines, devices or equipment used, the number of employees, square footage of the area, seating capacity, or the scale of fees collected.