Doing business in Los Angeles: city taxes on top of state filings

The stack

• Register with the Office of Finance for a Business Tax Registration Certificate (BTRC) when you start doing business in the city.
• Renew every year by the end of February; the small business exemption must be claimed on a timely renewal.
• City tax does not replace the $800 FTB tax or the $20 Statement of Information: all three stack.

How the city tax works

Anyone doing business within Los Angeles city limits, including home-based consultants and out-of-state companies with employees there, registers with the Office of Finance and receives a Business Tax Registration Certificate. Each year the business renews, reporting the prior year’s gross receipts. The tax is computed per $1,000 of receipts at a rate set by classification: professional services such as consulting, legal, and architecture, and contractors, pay about $4.25 per $1,000, while retail and wholesale pay about $1.01 per $1,000.

The $100,000 small business exemption

A business whose worldwide gross receipts were $100,000 or less in the prior year owes no city business tax, but only if it files its renewal and claims the exemption by the deadline (March 2, 2026 for 2025 receipts). Miss the deadline and the exemption is lost for that year, with tax and penalties due.

Worked example

A freelance UX consultant in Silver Lake with $150,000 of receipts in the professional classification owes about $150 × $4.25 = $637.50 in city tax, on top of California’s $800 LLC tax if she operates through an LLC. At $90,000 of receipts she owes nothing to the city, provided the renewal is filed on time.

The state layer underneath

City taxes sit on top of state obligations, never instead of them. For the CA side, see Start a California LLC, and check whether a hire or customer in Los Angeles creates a filing duty in the nexus checker.