Tax Incentives and Exemptions

The City of Los Angeles provides a number of tax exemptions and programs that can eliminate or reduce your tax liability.  These tax exemptions are detailed below.

Business Tax Exemptions

Entertainment Creative Talent

Applies to "creative artists" who generate up to $300,000 in total taxable and non-taxable in-City and out-of-the-City gross receipts attributable to their qualifying "creative activities."

Important Notes:

• The creative artist exemption requires that businesses file a timely renewal form.
• If the total taxable and nontaxable gross receipts from in and out-of-the-City that are attributable only to "creative activities" exceed $300,000, the exemption does not apply.
• The creative activities exemption is only available to registered businesses and not new businesses.
• This exemption applies strictly, only to individual "creative artists" (individual, individual acting as a loan-out corporation, or individual acting through a limited liability company), 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 other source.

FAQ  Municipal Code

 

Lifeline - Utility Users Tax Exemption for Seniors and Individuals with Disabilities

The Utility User's Tax Exemption / Electric & Water Lifeline Rate Application Program was developed to offer senior and disabled citizens an exemption from their electric and other utility bills.  To qualify, you must be a user of utilities at a residential address within the City of Los Angeles and be responsible for the payment of utility bills under your name.

FAQ  Apply for Exemption

 

Non-Profit, Charitable, or Religious Organization Exemptions

Applies to Charitable, Non Profit or Religious Institutions where these institutions are entitled to an exemption as a matter of State or Federal Law.

Important Notes:

• If your organization is recognized as Non-Profit or Charitable under IRS Section 501 or State Tax Section 23701d, you may apply for an exemption.
• If you have been paying business taxes and your organization meets the above criteria, you may be eligible to apply for a refund.

FAQ  Apply for Exemption (file)  Apply for Refund (file)

 

Small Business Exemption

Applies to registered small business that do not have taxable and nontaxable gross receipts exceeding $100,000 from within and out of the City of Los Angeles (worldwide).

Important Notes:

• Please note that the small business exemption is provided only for registered businesses.
• the $100,000 small business exemption requires that businesses file a timely renewal statement.  No qualifying small business is required to pay tax if the annual business tax renewal is filed on time.

FAQ  Municipal Code

 

EXEMPTIONS NO LONGER VALID

New Business Exemption

Expired December 31, 2017.  Applies to brand new businesses that are started in the City of Los Angeles or an existing business from outside the City of Los Angeles that relocates into the City.