Keeping High Tech Businesses in LA
Last week, the LA Times ran an article detailing an ambiguity in our tax code that has had the ironic result of increasing taxes on some of the very types business the City of Los Angeles has been hoping to attract and keep. In 1997, the City adopted a tax code revision that provided relief from the business tax to multimedia companies. Perhaps because of the rapidly changing technology landscape (or just an inability to predict the future), the code was silent on definitions for certain internet-based companies, which allowed our Office of Finance the freedom to interpret the code in way that has increased the tax burden unexpectedly on some of our high-tech companies.
While the job of our city tax collectors is to collect tax revenue, it’s the job of elected representatives to assess the whole picture and make sure that the City isn’t being penny-wise, but pound foolish in our policies. That’s exactly what’s happening here, and in tough economic times, it makes no sense to be driving employers like these across city borders to places like Santa Monica, which denies L.A. any revenues from their successful business operations.
Fortunately, this is something we can fix. I, along with Councilmembers Rosendahl and Smith have already introduced a motion asking the City Attorney and the Office of Finance to create a new ordinance to amend the tax code so that tech businesses that represent the future of well-paying industry in our city will choose to open and maintain operations in L.A.
Tags: business tax relief, Eric Garcetti
