Although it’s the health maintenance organizations that have been loudly demanding a lower tax rate, a less-publicized proposal to help another industry is expected to reach the Los Angeles City Council this week.
The measure to cut taxes for the fast-growing multimedia industry is being proposed by two unlikely allies Mayor Richard Riordan and City Councilwoman Jackie Goldberg.
Multimedia businesses, as defined by the ordinance, are those businesses that produce films, disks, tapes, software or other recording devices that combine two or more media, such as computer-generated graphics, film, audio tapes and photographs.
Companies that provide computer programming services, such as software design and digital imaging, would also qualify for the new tax rate, as would companies that develop Internet services and World Wide Web sites.
The definition is “purposely a little broad because multimedia is changing every day and we didn’t want to exclude something multimedia may include somewhere down the road,” said Steve MacDonald, director of L.A.’s Business Team.
The new tax rate would remove multimedia companies from the “Business and Professional” category the highest taxed category in the city to a new category that would have the lowest tax rate in the city.
Multimedia companies currently pay $5.91 per thousand dollars in gross receipts. If the ordinance is passed, their tax rate would drop to $1.18 per thousand dollars in gross receipts.
The new rate, if approved, would be retroactive to Jan. 1 of this year.