The collaborative economy is an economic model in which a host company provides an online-enabled platform to connect consumers with goods and services offered by private individuals or entities (also referred to as shared economy). Any person or entity that utilizes a hosted online platform to obtain payment for goods or services must comply with business tax requirements. Common types of platforms include, but are not limited to:
In the City of Los Angeles, all those participating in home-sharing activities are required to register, collect, and remit the Transient Occupancy Tax. Unless the applicant exclusively lists his or her primary residence on hosting platforms that have a Platform
Agreement with the City of Los Angeles (like AirBnB), the applicant must be registered to pay TOT with the Office of Finance pursuant to LAMC Section 21.7.6. A transient is defined as any person who exercises occupancy or is entitled to occupancy for 30 days or less. In addition, A Transient Occupancy Tax Registration Certificate is required within 30 days of commencing business. Examples of this include:
● Vacation/Short-term Rentals of any kind (i.e. houses, condos, rooms, or spaces) rented directly by the owner/operator, by property management companies, or via internet travel services
● Recreational Vehicle (RV) Parks and Campgrounds
● Secondary operators (managing agent, booking agent, online sellers, agents, etc.)
The Transient Occupancy Tax (TOT) must be remitted monthly. The renewal and payment is due on or before 25th of the following month. For example, TOT for July will be due by August 25th.
New Home-Sharing Regulations
Beginning July 1, 2019, those who rent out their homes on a short-term basis must also register with the city under the Home-Sharing Ordinance. Registration is valid for one year and must be renewed annually. The application and renewal process is administered by the City of Los Angeles, Planning Department.
To register for Home-Sharing, online applications may be completed using the Online Registration Portal (planning.lacity.org/home-sharing).You must register for Home-Sharing before accepting short-term rental reservations. If you were operating before July 1, 2019 you will need to register by October 31, 2019.
Before applying please check that you have all the required documents. Required documents include, the home-sharing address, photo ID, proof of primary residence, and landlord approval (if-applicable). Additional information may be required and can be found at on the Planning Department’s website, planning.lacity.org/HomeSharingOrdinance.
For more information on the new Home-Sharing Ordinance, please click below.
For information on paying the Transient Occupancy Tax, please click below.
Business Registration for Rideshare Drivers
As independent contractors, the City of Los Angeles requires an annual Business Tax Registration Certificate (BTRC) for all rideshare drivers that live in the City of Los Angeles and drove more than 30 days in the prior calendar year. If you do not live in the City of Los Angeles, you are not required to file a BTRC with the city of LA, though you may have obligations to the city you live in.
You can register on-line or by visiting one of our service centers. Please click any of the links below.