Tax Incentives and Exemptions

The City of Los Angeles provides a number of tax exemptions and programs that can eliminate or reduce your tax liability.  These tax exemptions are detailed below.

Business Tax Exemptions


Entertainment Creative Talent

Applies to "creative artists" who generate up to $300,000 in total taxable and non-taxable in-City and out-of-the-City gross receipts attributable to their qualifying "creative activities."

Important Notes:

  • The creative artist exemption requires that businesses file a timely renewal form.
  • If the total taxable and nontaxable gross receipts from in and out-of-the-City that are attributable only to "creative activities" exceed $300,000, the exemption does not apply.
  • The creative activities exemption is only available to registered businesses and not new businesses.
  • This exemption applies strictly, only to individual "creative artists" (individual, individual acting as a loan-out corporation, or individual acting through a limited liability company), when performing "creative activities" for "entertainment or aesthetic purposes."
  • It only applies to those receipts the creative artists earn from their creative activities and does not include income from any other source.

FAQ

Municipal Code 

Non-Profit, Charitable, or Religious Organization Exemptions

Applies to Charitable, Non Profit or Religious Institutions where these institutions are entitled to an exemption as a matter of State or Federal Law.

Important Notes:

  • If your organization is recognized as Non-Profit or Charitable under IRS Section 501 or State Tax Section 23701d, you may apply for an exemption.
  • If you have been paying business taxes and your organization meets the above criteria, you may be eligible to apply for a refund.

FAQ

 Apply for Exemption 

Apply for Refund 

Small Business Exemption

Applies to registered small business that do not have taxable and nontaxable gross receipts exceeding $100,000 from within and out of the City of Los Angeles (worldwide).

Important Notes:

  • Please note that the small business exemption is provided only for registered businesses.
  • the $100,000 small business exemption requires that businesses file a timely renewal statement.  No qualifying small business is required to pay tax if the annual business tax renewal is filed on time.

FAQ

Municipal Code 


EXEMPTIONS NO LONGER VALID

New Business Exemption

Expired December 31, 2017.  Applies to brand new businesses that are started in the City of Los Angeles or an existing business from outside the City of Los Angeles that relocates into the City.

Important Notes:

A brand new business or a business that relocates from outside the City is exempt from paying the first year business tax provided the business obtains the Tax Registration Certificate from the City by the end of the second calendar month of the business start date.  Additionally:

  • A business that does not obtain the Tax Registration Certificate by this deadline cannot take the first year exemption and will be liable for the first year tax and any interest and penalties for late filing.
  • The City has an exemption for the second year of business provided the first year taxable gross receipts are less than $500,000 and the Business Tax Registration renewal is filed on or before the end of the February deadline of the 2nd calendar year of business.