Los Angeles City Councilman Mitch Englander this month introduced a motion to lay the groundwork for synchronizing the payment of business taxes with federal and state taxes.
Business taxes in Los Angeles are due on Jan. 1 and are considered delinquent if not paid by the last day of February under current policy.
This requires bookkeepers to review receipts twice: once in December for the city’s business tax and again a few months later in time for the federal and state tax filing deadlines, which fall around April 15.
“This places an unnecessary burden on businesses because the city deadline does not align with the state and federal April deadlines,” Englander said in his motion.
The councilman cited statistics from the city’s Office of Finance that only 69 percent of businesses file their gross receipts taxes on time and an additional 15 percent to 20 percent file upon receiving a hearing notice.
Englander’s motion calls for city staff to analyze the impacts of aligning the L.A.’s business tax deadline with the federal and state tax deadlines.
“Extending the business tax filing deadline should cause an increase in the percentage of businesses filing on time,” he said. “More businesses filing on time will save the city in costs associated with pursuing businesses that failed to file … by the deadline.”
Speaking of Business Taxes
Business groups across the state normally would cheer the on-time passage of a state budget. But not this year, thanks to one small part of the $187 billion budget: an overhaul of the state Board of Equalization.
That’s the agency that collects sales taxes as well as hears appeals from businesses and others who pay sales and use tax.
The overhaul was prompted by various audits and reports about the board’s five elected members intervening in operations of the agency and receiving controversial campaign donations.
The budget act strips the Board of Equalization of most of its powers and sets up two new agencies: a Department of Tax and Fee Administration to run the sales tax and other programs, and a tax court of administrative law judges to hear appeals from taxpayers. The board would still set some tax rates and oversee property tax assessments.
Business groups are most concerned about the proposed tax court, which would turn appeals over to unelected bureaucrats.
“This is an attack on taxpayers’ rights, including the right to meet with elected officials and the right to appeal taxes without the expense of going to court,” Teresa Casazza, president of the California Taxpayers Association, said in a statement before the Legislature passed the budget.
The association has major corporations on its board and was one of 30 business groups – including the California Chamber of Commerce, the National Federation of Independent Business and the Los Angeles County Business Federation – that sent a letter this month to Gov. Jerry Brown and legislative leaders asking them to remove the proposals from the budget package and extend the time line for consideration.
The Legislature passed the proposals anyway.
Brown is expected to approve the proposals.
Permit Streamlining Redux
Los Angeles Mayor Eric Garcetti has proposed putting parallel processing of planning approvals and building permits in place for smaller projects.
Such simultaneous processing is common in larger development projects right now, such as a hotel or mixed-use high-rise. But many smaller projects still require sequential processing: the developer/property owner first gets a zoning variance if necessary, then gets a building permit, then gets a Fire Department permit, and so on.
Garcetti wants to change this. Appearing on KABC-TV’s “Ask the Mayor” program this month, Garcetti said he wants to allow developers of smaller projects to apply simultaneously for permits and approvals from all of the relevant agencies.
“The goal is no more sequential permit processing,” said Garcetti, adding that such a move would reduce the wait time and the money spent on entitlements and permit approvals.
This is hardly the first time an L.A. mayor has proposed speeding up the permitting process.
Former Mayor Antonio Villaraigosa had a plan – later scrapped – to cut the number of agencies weighing in on planning and permit approvals from 12 to two. He also implemented an expedited permitting process for major development projects and an express permitting process for restaurants.
These proposals have had a mixed track record: Some have never been implemented, while others have had less impact than hoped as developers still say it takes too long to get projects approved. Some of that is inevitable in a city where almost any significant project draws some opposition from neighbors.
The question for Garcetti’s proposal – assuming implementation – is whether it would actually save developers time and money or whether it just would shift the same amount of work around.
Staff reporter Howard Fine can be reached at [email protected] or (323) 549-5225, ext. 227.
