Paying city taxes has been an unmitigated nightmare for Ken DelConte, who owns a bowling alley near Los Angeles International Airport.

The city’s antiquated system of taxing business owners in a multitude of different categories has had Southwest Bowl owner DelConte thoroughly confused for years.

He has to pay around $200 per lane for his 26 lanes, $300 per year for his five arcade machines and $600 for his dance floor plus a bar tax and a percentage of his gross receipts.

“It is very confusing. They tax you for every little thing,” said DelConte. “Things are so silly right now. I wish we just had a straight tax, it would be a lot better.”

DelConte might get his wish if Mayor Richard Riordan has his way. Last week Riordan released a long-awaited reform proposal that will overhaul the current business tax system into a user-friendlier version.

Currently, businesses can be levied in 64 separate categories, and more than 20 percent of the 211,000 businesses in Los Angeles pay taxes in more than one category, according to Beverly Burr, an economic consultant to the city.

The new code would reduce the number of categories to eight, and businesses could only be levied in one category. The new code is also supposed to reduce taxes by anywhere from a few percentage points to up to 80 percent. In limited cases, there would be tax increases.

The current system has been a bookkeeping nightmare for many local companies, making it costly to comply perhaps one reason why as many as 30 percent of the businesses in Los Angeles don’t pay taxes.

There are codes for blind retailers and wholesalers, swap-meet operators, firearm sellers, pornography dealers, Christmas tree lots, strolling musicians, condom machines, Skeeball alleys and visiting circuses.

“If the mayor can get this passed, I will not kiss his feet, but I would want to shake his hand,” said DelConte. “It is so hard to run a business in Los Angeles. This would make things a lot easier.”

In addition to having fewer categories to deal with, businesses would be able to file during their own fiscal year, rather then during the city’s calendar year, which ends June 30. That change has far-reaching implications for hotels, department stores, car dealerships and other businesses that sometimes have to file in eight or nine different categories.

Take the Four Seasons Hotel, for example. It must pay a payroll tax, auto parking tax, commercial rental tax, hotel apartment tax, laundry cleaner tax, retail tax, personal property rental tax and a retail alcohol tax.

“We welcome the mayor’s new tax proposal,” said William Mackay, general manager of the Four Seasons. “We believe this is the first step in simplifying the system. We would be delighted to only pay in only one category. That would mean a great amount of savings for us administratively.”

New-car dealerships currently have to pay in multiple categories for service and parts, retail sales and wholesale sales. The new code would change their status from three categories to one. It would also bring them in line with the federal Standard Industrial Classifications (SIC codes), the classifications used by the IRS to set federal business taxes, making it a lot easier to complete tax returns.

“The current categories cause a great deal of accounting confusion when a dealer files taxes and the city audits them,” said Michael Gagan, a lobbyist from Rose & Kindel who represents the New Car Dealers Association. “Generally speaking, what is attractive about the new package is, in addition to lowering rates, it also simplifies the procedure. It is very hard to quantify the value, but to a small business I expect it will be significant.”

Other provisions are especially geared to ease the burden currently faced by very small or new businesses. There will be a first-year exemption for start-ups and a permanent exemption for businesses making less than $5,000 a year.

The minimum tax rate will be reduced to a flat rate of $75 for all categories, while the top tax rate will be reduced from $5.91 per $1,000 of gross receipts to $5.40. Small independent contractors like gardeners, who are now taxed at the same rate as surgeons, will pay the lowest rate of $1.20 per $1,000 of gross receipts.

The changes would mean an average savings of 14 percent for companies with fewer than five employees and 25 percent for individuals who are self-employed.

The tax reform proposal will now go before the City Council. If approved, as appears likely, it must appear on a citywide ballot, most likely in June 1999. Voter approval is required because the plan involves some tax increases