The Office of Finance was created in 2000 as a result of Charter reform efforts. On an annual basis, the Office of Finance collects over $2 billion in revenue from various sources including taxes, licenses, fees, and permits which pay for numerous essential municipal services to City residents and businesses. Our primary responsibility is to collect revenues, outstanding delinquencies and claims on behalf of other City departments. The Office of Finance also assists other revenue producing departments in the City by recommending standardized billing and collection procedures based on best practices in an effort to improve the City’s collection of outstanding debt. We carry out the mission statement through the efforts of 342 employees and a budget of $23.4 million. The Office of Finance also provides information to businesses and individuals regarding the City’s tax and fee collection program. This website presents summaries of many of the City’s current tax and fee requirements.
“To provide efficient, effective and responsible revenue collection services through a customer focused environment to taxpayers and City departments through management, assessment and application of best practices.”
Public information is available at eight locations throughout the City, over the telephone, and via e-mail. On-line filing is available for annual business tax renewal. We have staff working in the field directly with the City’s taxpayers through audit and enforcement activities. Employees in our Department include specialized classifications such as Tax Compliance Officer, Tax Auditor, and Collection Investigator.
Under state legislation, the City has access to basic tax information provided on State income tax returns filed with the Franchise Tax Board. This information is used to identify businesses that owe City business taxes to help pay for critical City services, establish a fairer business tax system and fund future business tax reform and affordable housing. The AB63 Program has resulted in significant revenue for the City of Los Angeles with more than 76,000 new business tax accounts and over $76 million in revenue since inception in 2002. Under state legislation, the local sharing program sunsets in 2011.
The Assessment Review Officer provides an impartial review of tax audit appeals for a more expeditious and “business friendly” means of appealing the findings of an audit in-lieu of an appeal to a formal Board of Review.
The office of Finance generated approximately $464 million from Business Tax collections in 2007. There are approximately 368,000 businesses on the City’s tax rolls. The annual renewal season will commences on the first day of January with timely payments due to the City by the close of business on the last day of February or postmarked no later than 11:59 p.m. of that day. Taxpayers with multiple classifications whose rates are based on annual gross receipts may exercise the option of Single Category Filing, provided that the selected classification accounts for 80% or more of the entire gross receipts after any apportionments. Businesses can prepare and submit renewals electronically over the Internet in a streamlined and intuitive fashion including calculation of the liability and any penalty and interest, with payment accepted via credit card.
The Citywide Program is responsible for maximizing the City’s revenue, evaluating methods for improving the City’s billing, accounts receivable, and collection efforts, establishing measurable revenue collection goals, and evaluating progress toward fulfillment of these responsibilities. The Citywide Revenue Billing and Collection Program largely affects these efforts through enforcement of established citywide guidelines for collection activities.
The Citywide Collections Unit assists City departments with delinquent accounts. The unit refers delinquent accounts valued up to $1,000 to any of three contracted collection agencies for further action. The unit refers delinquent accounts greater than $1,000 to a Finance Collection Investigator. The Investigators process and initiate action to recover damages to City property, DUI emergency response costs, court costs, and restitution for vandalism. The Citywide Collections Unit returns all collections from this group to the respective City departments.
Business auditors and field investigators carry out the enforcement activities. Tax Auditors perform audits on site at the taxpayers business or as a desk audit, where the taxpayers bring their business tax records to our office for audit review. An audit may involve out-of-state travel. The department’s goal is to increase audit penetration by 300 percent. Tax Compliance Officers perform approximately 85,000 on-site investigations of businesses annually to ensure compliance with the Los Angeles Municipal Code. Staff receives training to ensure uniform application of the Tax Code encompassing policy and ordinance compliance.
As part of the Citywide Program, the Revenue Manager chairs a Citywide committee composed of revenue generating departments. Their goal is to maximize the City’s revenue, evaluating methods for improving the City’s billing, accounts receivable, and collection efforts, establishing measurable revenue collection goals, and evaluating progress toward fulfillment of these responsibilities.
The Taxpayer Advocate serves as a liaison and advisor to taxpayers and provides assistance with complex business tax problems. The Advocate can be reached through fax, e-mail to Finance.Advocate@lacity.org, U.S. mail or referral by any Office of Finance employee.
We conduct annually more than 75,000 public office interviews at our offices throughout the City. We receive and handle 53,000 annual customer service requests by telephone. Branch and District Offices are located in the Los Angeles Civic Center, Van Nuys, West Los Angeles, Hollywood, Watts, San Pedro, and Westchester. We also have Taxpayer Advocates and Assessment Review Officers available to address more complex issues.
The State of California imposes a Use Tax on businesses for out-of-state vendor purchases and for leased equipment from California and/or out-of-state vendors. The State encourages businesses to obtain a Direct Payment Permit from the State Board of Equalization. This Permit changes the way the State distributes the tax paid, allowing the City to receive increased tax benefits. The City in return offers businesses that obtain the Direct Payment Permit a 20% rebate if they join the City’s Use Tax Rebate Program.
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