Many cities (and a few states) in the United States have business and professions taxes. The tax rate usually depends on what occupation you’re in. The taxes can be low, or high.
I used to run West Coast operations for two different telecommunications companies. When I joined the first business, I urged the ownership to move from Sherman Oaks (part of Los Angeles) to Burbank. The business would face a flat $150 license fee rather than spending thousands on taxes. It was a no brainer. The second company was, at one point, looking at acquiring a business in Los Angeles and moving into that office. But the city’s high taxes kept us out.
Creators Syndicate is a Los Angeles based distributor of content; they syndicate newspaper columns, comic strips, and similar material. Its owner isn’t happy with the City of Angels.
As the column I’ve linked to notes, several years ago Creators fought a battle with Los Angeles as to which occupation they should be considered to be in. They won. Now, years later, bureaucrats in Los Angeles have changed their mind. Creators has filed a lawsuit against the city and will likely end up moving if the lawsuit is unsuccessful.
The whole article deserves your reading. Here are two quotes from it:
We work with hundreds of outside agents, consultants, independent contractors and support services — many of whom pay taxes to the city of Los Angeles. This spurs a job-creating ripple effect on the city’s economy. Yet I suspect many companies like ours already have quietly left town in the face of the city’s taxes and regulations. This would help explain the erosion of jobs….
As long as City Hall operates like a banana republic, why is anyone surprised that jobs have left the city in droves and Los Angeles is teetering on the brink of bankruptcy?
When I counsel entrepreneurs about where to locate their businesses, I stress that you have to investigate local taxes. It can mean the difference between success and failure.
Tags: LosAngeles