Los Angeles, CA — The city of Los Angeles has recently billed about 33,000 individuals, partnerships and corporations for $4,363.81 for missing a Feb. 28 deadline to register their businesses with the city’s tax and permit division.
Those who may owe payments to the city’s Office of Finance, which collects a tax on home-based businesses may include photographers, freelance journalists, accountants, website designers and more.
Those with home-based income of less than $100,000 per year are exempt from taxes, but still must file the paperwork. The businesses who failed to file were assessed fees calculated as if they made $200,000 in gross income for each of the past three years, the annual average for city business taxes.
The city then added interest and late penalties and came up with the $4,363.81 demand. Some of the bill recipients may have incomes less than the taxes requested.
Recipients of the tax bills can follow the instructions in the letters, contact Office of Finance representatives and calculate their actual tax debt, which is usually much lower.
City Finance Director Antoinette Christovale told the Daily News that the letters stem from a program begun in 2002 to identify unregistered businesses, using records disclosed to the city by the California Franchise Tax Board. The action added about 100,000 businesses to the city tax rolls, and $107 million in revenue has been collected.
An individual is considered doing business in the city if they receive a 1099 tax form or earn independent contractor income.
