Taxpayers conducting business in the City of Los Angeles, as well as in neighboring cities, may be subject to the annual Los Angeles City Business Tax (LACBT) with a filing deadline of March 1. Companies unknowingly may be subject to the LACBT due to broad nexus standards that include regularly soliciting business in Los Angeles.
As a result of the COVID-19 pandemic, with many employees working remotely, taxpayers unexpectedly may find themselves triggering a filing obligation or increasing/decreasing their level of business activity in Los Angeles. For companies subject to the tax but not yet registered, a voluntary disclosure program is available.
In light of the unique and complex rules relating to the LACBT, businesses should give
careful consideration to whether a filing obligation exists, what gross receipts are subject to apportionment, and how such gross receipts should be apportioned to Los Angeles. Los Angeles is anticipated to intensify its tax enforcement efforts.