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I first published this blog post in 2018, and it’s been one of our most popular each year.
TL;DR: Your guide to the City of Los Angeles Business Tax
Not in LA? If you did business here, you have taxes
- If your place of business or freelance work is physically located in Los Angeles, including in your home, you must register with the Office of Finance annually by February 28
- For 2025 only, due to January wildfires, the city is EXEMPTING business owners in 3 ZIP codes and allowing extension filings for everyone else
- Your business license is tied to this registration; there is no registration fee, only a business tax
- Even if you didn’t earn any money, you have to register
- You may owe gross receipt taxes even if you operated at a loss
- You may owe gross receipt taxes if your business is located outside Los Angeles but you did business here for at least six days
- Yes, the city really can slap you with a misdemeanor and a fine if you don’t register
I started my Los Angeles-based company in 2017. In April 2018, I got a scary letter levying a $4,000 penalty against the $28,000 I had earned in freelance income. I vowed from there that I would annually assist my fellow LA business owners and freelancers in 1) avoiding this stupidity and 2) making the case for small-business policies rooted in a teeny bit of reality.
- If you are in ZIP codes 90402, 90272, or 90049, you get an automatic extension to April 14 and potential waiver of tax liability.
- If your business was interrupted due to the fires, until February 28, you can request an extension at this link.
Even if you’re in Burbank, Boise, or Baltimore, this might still apply to you. If you earned revenue while physically in the City of Los Angeles on six or more days, your earnings activities within the city proper are subject to the gross receipts tax and business filing requirement, regardless of where your business is located.
What every LA business and freelancer needs to know about local business taxes
Even if you did not get a 1099 or did a small job under $600, you still have to self-report.
With that in mind, did you earn money as a self-employed person or business in the City of Los Angeles in 2024? Even if it’s a side hustle, a one-day gig, or just helping out a friend, if you got paid, you need a Business Tax Registration Certificate. Registering will let you know how frequently you need to renew. However, if you’re filing retroactively for 2024, you’ll immediately be prompted to pay the amount due to maintain a business license.
If you live in the City of Los Angeles and did ANY freelancing last year, or you set up a business that’s run from a Los Angeles address, you need to do this IMMEDIATELY.
Before you stress over how you’re going to pay the bill: the City provides a few exemptions. If you are a new business in your first or second year, a small business with less than $100,000 in global gross receipts, or a Creative Artist individual or business with less than $300,000 in revenue, you should be exempt.
If you’re not one of those categories, you’ll be assigned a tax rate per $1,000 of revenue based on your business activities.
A comprehensive guide to filing your LA Business Tax for the first time
If it’s your first time, start here. If you’ve filed before, use the Business Tax Renewal page. You will need to know:
- Your filing number or EIN or Social Security number
- Your total gross revenue for 2024
- What amount you earned while physically located in the City of LA
- How much you earned NOT in the City of LA (including Burbank, West Hollywood, Santa Monica, and the 23 other independent cities inside of LA County).
- How much you earned from “creative arts exemption” activities.
- If you’re a cannabis business, how much state excise tax you owe.
Once you complete the form, you will instantly be provided with a tax bill and options to pay by online check, ACH transfer, or credit card.
If you’ve been taken by surprise and need more time to pay, you can request installment options by calling the city or stopping by an office with the required information. If your tax and interest is current but you’ve received a penalty letter, you can request a waiver of penalty here.
If you qualify for the Creative Arts or small business exemption, as long as you register on time each year, you won’t have to pay.
However, if you’re not in entertainment and you make even $1 more than $100,000, you’ll have taxes due to keep your business license.
The gross receipts tax is controlled by the City Council. The mayor can make a recommendation, but ultimately, 14 people have control of this policy. Find your council representative and their social media handles to share your opinion.
Until then, there’s always Glendale.
