I am a bookkeeper in Montana. I don't know about any other
states. I'm sure it varies significantly. But I also know
that the cities here will often bill you for licenses and
you have to point out to them that you are exempt.

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- quote -

We are talking here about the Los Angeles city business
license tax, which is imposed on all businesses conducted
within the city limits and is measured by gross receipts.

It has nothing to do with state licensing of various
professions -- real estate brokers, agents, beauticians,
etc., etc. All of those businesses are subject to it, but
so are others that do not require state licenses.

No question the OP is subject to it. His question is why he is and
others of whom he is aware appear not to be paying it. I think the
answer probably is either (1) they are paying it through some
mechanism that is not apparent to him, or (2) they are getting away
with noncompliance.

Katie in San Diego

The foregoing is intended for educational purposes only and does not
constitute legal or professional advice.

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mkey[at]msn.com (cmkey) wrote:

- quote -

cmkey - in which state do you practice (that waives city tax
on state licensed pros)? Are there others?

I am registered at State level, and have always paid local
licensing (city) tax also. Never thought about it. Hmm...

-HW "Skip" Weldon
Columbia, SC

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- quote -

In our state if your profession is licensed by the state,
the cities, counties, etc are prohibited by law from
assessing a business licensing tax on you. I don't know
if that is the case there, but it is a possibility.

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JeffP wrote:

- quote -

Only way to get an answer is to ask the city.
there are several scenarios I see in this LA:

1. city occupational tax assessed annually on all businesses
with a fixed location.

2. city occupational tax assessed at maybe 1% on all
employees, and which in effect serves as a city income tax.

3. a true city business license, based either wholly or in
part on gross receipts from the business.

Cheer$,
Harlan Lunsford, EA n LA

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"JeffP" <JPgmtNoSpam[at]sbcglobal.net> wrote:

- quote -

See my response to this question on misc.taxes.

Katie in San Diego

The foregoing is intended for educational purposes only and does not
constitute legal or professional advice.

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- quote -

Most realtors have LA city tax withheld by their broker and
paid directly from their commisions, which eliminates the
need for a separate filing.

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JeffP wrote:

- quote -

"Business tax" = ???
1. Business license fee.
2. Wage surcharge.
3. City income tax (I don't THINK there is one.)

Assuming the first, possibilities include:

There's no tax on THAT type of business.
They're "statuatory non-employees", so they're 1099'd,
but are employees for other tax purposes.
Although they live in "The City", they don't work
in the city. (Or, for that matter, the other way
around. A business usually pays license fees where its
offices are, regardless of where the work is done.)

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- quote -

Perhaps the statutory employee status that some of them may
have??

Carol
What can one expect of a day that begins with getting out of bed.

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City: Lost Angeles

It has recently come to my attention that there are many
people in the city that are paid 1099 that are not required
to register and pay a business tax.

Most of the people I know work in either real estate or
insurance.

My main work involves insurance, but I do not receive commision for my work.

Can anyone shed some light on why one activity is NOT
considered a business and others ARE?

Are there some conditions that test to see if one is in
business and should register with the city?

TIA

JeffP.....

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