Mayor James Hahn last week continued to move on his campaign promise for business tax reform, proposing with newly-elected councilman Jack Weiss a business license tax exemption of up to two years for start-up businesses with less than $500,000 in revenues. The move followed measures signed the previous week that among other things granted a business tax amnesty to scofflaws.

On the surface, this latest move seemed to suggest that Hahn regarded as insufficient the one-year start-up exemption measure proposed by former City Councilman Mike Feuer and signed into law earlier this year by former Mayor Richard Riordan.

And to some extent, the Feuer-Riordan measure was insufficient. For, according to Hahn spokeswoman Julie Wong, the Feuer-Riordan exemption really wasn't for one year: it applied only to the calendar year in which the business was started.

"If you started your business in January, then you'd get a full-year exemption," Wong said. "But if you started your business in October or November, you were exempted only for the rest of the year, or just a few weeks. When Jan. 1 rolled around, you'd be paying business taxes."

The Hahn-Weiss measure is designed to correct that, giving every start-up business with under $500,000 a minimum of a one-year exemption. Thus a business started in November wouldn't pay any taxes for its first 13 or 14 months.

If this proposal does pass the council and no real opposition emerged last week then a smart entrepreneur preparing to launch a business later this year might decide to wait until after Jan. 1, when he or she could take full advantage of the two-year tax exemption.

Padilla Makes Committee Assignments

When City Council President Alex Padilla made his committee assignments last week, much of the attention focused on high-profile committees like public safety which will continue to be chaired by Councilwoman Cindy Miscikowski or the new Education and Neighborhoods Committee, to be chaired by Councilwoman Janice Hahn.

But starting Sept. 1, L.A. businesses will have to cultivate other committee chairpeople on less high-profile committees, like Planning & Land Use Commission chairman-designate Ed Reyes and Budget & Finance committee chairman Nick Pacheco. (The budget committee holds the key to further business tax reform.)

At the top of that list is freshman Councilman Eric Garcetti, who will head the newly-created Economic Development and Employment Committee. Garcetti last week outlined his main goals for his chairmanship.


For reprint and licensing requests for this article, CLICK HERE.