If you operate a business or perform work in the City of Los Angeles, you must understand the City’s business tax requirements — including registration, filing, exemptions, and deadlines. This guide explains what Los Angeles expects, how to comply, and key rules every business owner or independent contractor should know.
What Is the LA Business Tax?
The Los Angeles Business Tax is a privilege tax the City imposes on persons or entities conducting business activities within its limits. It is not a regulatory license — it simply funds municipal services such as police, fire, and street maintenance.
Anyone engaged in a trade, profession, or occupation in Los Angeles is generally required to obtain a Tax Registration Certificate (TRC) and pay the applicable business tax. You are considered to be conducting business if you physically perform work in the city for seven (7) or more days per year.
Tax Registration Certificate (TRC)
Who Needs One?
- All businesses and sole proprietors physically working inside Los Angeles.
- Independent contractors (e.g., 1099 workers) performing work in the city.
- Even home-based or platform-based workers (e.g., Airbnb, ride-share) must register if they meet the criteria.
How to Apply
- You can register online through the City’s Office of Finance.
- Temporary printable certificates are often issued immediately; a permanent TRC follows by mail.
- You will use your TRC number for annual tax filings.
How Much Does It Cost?
Business tax amounts depend on the type of activity:
- Many businesses are taxed based on gross receipts — a rate per $1,000 of income.
- Some industries or activities are taxed on a flat rate or based on factors such as:
- number of vehicles
- number of machines or employees,
- square footage,
- seating capacity, etc.
For example, general contractors have a minimum tax of $153 per year.
Filing Deadlines & Renewals
Annual Business Tax
- Due January 1st of each year
- Delinquent after February 28th / March 1st (dates can vary by year)
- Renewal is based on gross receipts from the previous reporting period.
Example: 2026 business tax renewals are timely filed if submitted by March 2, 2026 to avoid penalties.
Quarterly and Monthly Filings
Depending on your business classification, you may need quarterly or even monthly returns.
Note: Occasionally the City may grant deadline extensions — for example, during emergencies; businesses affected by wildfires in 2025 were given extended filing deadlines and relief.
Exemptions and Small Business Rules
Small Business Exemption
- Businesses with $100,000 or less in gross receipts annually may qualify for a Small Business Exemption.
- To receive the exemption, you must file your renewal in a timely manner.
Note on New Business Tax Exemptions
- Special new business tax exemptions previously available no longer apply (they expired in 2017).
Penalties for Non-Compliance
Failing to obtain a TRC or pay required business taxes on time can result in:
- Interest and penalty charges
- Possible misdemeanor or infraction charges under City law
- Potential legal remedies by the City, including fines or collection actions.
Even if you stop doing business, you may still owe tax going back up to eight prior tax years if you never registered.
Important Considerations
- Registration and tax payment do not legalize an illegal business — you must still comply with zoning, safety, health, and other regulations.
- Taxes are generally apportioned fairly if you do business both inside and outside of Los Angeles.
- You can sometimes enter installment agreements if your total liability is $1,000 or more.
Helpful Resources
- Los Angeles Office of Finance – Business Tax Info & FAQ: Official answers from the city.
- Business Tax Registration Certificate Page: Step-by-step registration guidance.
- Key Dates & Deadlines: Annual filing timeline and reminders.
- Tax Education Programs: Tools to help understand obligations.
Summary
In Los Angeles, most businesses must register and file an annual business tax return with the city’s Office of Finance. Understanding the rules — including exemptions, deadlines, and filing requirements — is vital to avoid penalties and remain in good standing. Proper and timely filing protects your business and keeps you compliant with local tax law.