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City councils

Mayor Villaraigosa Calls for Permanent Business Tax Holiday

Strategic Insights

— 1 min read

Mayor Antonio Villaraigosa is advocating for the business tax holiday implemented in 2010 to remain permanent, as it has proven to be a successful tool for bringing businesses to Los Angeles and generating jobs. He has called on the City Council to make the three-year tax holiday for new businesses permanent, rather than allowing it to expire in 2012. The policy has already attracted major companies such as Google and Costco, who have relocated to the city due to the tax holiday. Mayor Villaraigosa's goal is to create a healthy environment for job creation in Los Angeles while maintaining the city's services and reducing the structural deficit.

Key Takeaways:

  • The business tax holiday implemented in 2010 is currently set to expire in 2012, but Mayor Villaraigosa is advocating for it to remain permanent.
  • The policy has been a successful tool for bringing businesses to Los Angeles and generating jobs, with companies such as Google, Costco, and Farmer's Insurance relocating to the city.
  • The business tax holiday has resulted in a significant increase in economic development and stability for the city, with no negative impact on the city's budget.
  • The city's business tax is a gross receipt tax, but the policy is to make it more competitive with other cities in the region by reducing the tax burden.
  • Mayor Villaraigosa's job-creation strategy involves five key components, including reforming the city's business tax, reducing red tape, and modernizing LAX and the Port of Los Angeles.

Statistics:

  • 100% - The business tax holiday has resulted in a 100% increase in businesses relocating to Los Angeles.
  • $1 million - The revenue of two companies with different profit margins would be taxed equally under Los Angeles' business tax system.
  • 9 - The number of classifications in Los Angeles' business tax system range from 1.01 to 5.07 per $1,000 of gross receipt.
  • 5.07 - The highest tax rate in Los Angeles, which is the highest in the region and considered a disincentive for businesses to locate in the city.

Sources:

  • Office of the Mayor, City of Los Angeles
  • United Chamber of Commerce Annual Mayor's Luncheon
  • Remarks by Mayor Antonio Villaraigosa, as quoted by Teddy Davis, Contact: 213-978-0741

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