LA Business Tax

[curleysound]

I know several of you aren't LA locals, but for the ones who are, I have a question. Do you know anything about the Business Tax? I just got a letter asking me to divulge my earnings for the past three years. Have you all been doing this, or are you aware of something that exempts us from this?

Thanks,

Tom

[Jeff Wexler]

Is this a FEE for a Business License? There is no "business tax" that we as freelance workers are subject to that I know of. If you are operating a business, our of a storefront or your home, L.A. County may require that you have a Business License or Permit. This does require answering some questions and stating certain things about the nature of your business but does not require stating earned income (unless this is income earned through commerce on your property or something like that).

-  JW

[curleysound]

I just spoke to a lady at the LA Finance Department's Revenue Management office, and they informed me that any income that was garnered through 1099 forms are eligible for LA City Business Tax. I'll be getting a bill soon. Awesome. You all might want to check into this on your own.

Tom

[FSBELLA]

curley,

thats correct. when you operate as a freelance technician (you get 1099's) you have to pay a business tax. that is why a lot of independent sound mixers have incorparated a LLC. better expsenses to right off etc. and for your kit rental.

[old school]

Wonder how the tax works if one does not live in L A? I never heard of this tax. Hmmmmm.....

CrewC

[Philip Perkins]

The City of Oakland has been doing the same thing w/ freelancers here.  They have access to the CA State IRS records now, and look for 1099 income and fictitious business names with Oakland addresses.  They are charging people a business tax, often retroactive for a few years, and penalties for conducting business w/o a license.  They don't care if the business is done outside of Oakland, if the business address is in the city they come after you.

Philip Perkins

[joecrabb]

Hey Tom

I got this same notice two years ago and when I went in to see what was up, they indeed did want to get paid.

Apparently there is a "Creative Artist Exemption" that includes production jobs, most importantly "Sound Dubbing". To quallify for this exemption you have to file you business tax statement before a certain date every year ( I think it's in Feb.) and make less that $300,000 gross (cause we are all just rolling in dough). In my case, and yours as well, I obviously hadn't filed on time for the previous three years so I had to pony up. It really wasn't all that much after all that though, even including penalties and interest for the three years.

This year though, when the bill came, I promptly sent it back asking for the exemption and they approved it so I was charged nothing.

Joe

[joecrabb]

I found the old forms.

Here's a place to start at LAcity.org

http://www.lacity.org/finance/finA.htm

Look under Business Tax Exemptions and go from there

Joe

[curleysound]

Joe,

  Thanks a bunch! That is a great help!

Tom

PS. Crew: The form i was sent says that there is an exemption for folks whose physical business address is outside of the city of LA, but then again, your local city might want in on the action...

[joecrabb]

The way it was described to me by the person at the Office of Finance is that it matters where you physically perform the work. I pointed out that I work on a stage in Burbank frequently but that my office is located at my house in LA. He said that there is NO tax for all the income on those jobs that are performed outside the city of LA. They seemed to understand the freelancer concept of never being in the same location for very long.

The city of Burbank wants you to pay for that portion of your income earned inside their city limits I would guess. I am a little reluctant to open that can of worms with them though.

Joe