LOS ANGELES, CA –Councilwoman Monica Rodriguez issued the following statement and provided remarks following the City Council unanimously adopting her suite of motions to modernize Los Angeles’ 20-year-old business tax structure and preserve its culinary heritage:
“Our small businesses are the backbone of Los Angeles’ economy, yet we are asking them to compete under a tax structure from nearly 20 years ago.
“The $100,000 exemption threshold has not been updated since 2006, even as costs have risen dramatically. My motion takes a responsible approach by analyzing the fiscal impact of raising that threshold and comparing our policies to other cities so we can remain competitive.
“This long-overdue action will protect our City’s fiscal health and support small businesses so they can open, grow, and stay open.”
BACKGROUND:
Councilwoman Rodriguez’s motion updates financial incentives to help restaurants and small businesses stay economically viable and encourages programs that support growth, including brick-and-mortar expansion for street vendors, food trucks, and catering businesses.
The Small Business Exemption, last updated in 2006, applies to businesses with gross receipts under $100,000. Under the City’s Business Tax ordinance, most businesses pay taxes based on gross receipts or factors like employees, square footage, or equipment. The motion directs the Office of Finance, with the City Administrative Officer and Chief Legislative Analyst, to evaluate raising the exemption threshold and to benchmark Los Angeles’ tax practices against other cities.
This modernization is further enhanced by Councilwoman Rodriguez’s motion addressing the need to preserve Los Angeles’ unique culinary heritage by seeking new support systems for legacy restaurants which have been in operation for at least 20 years.
This complementary motion instructs the Chief Legislative Analyst and the Economic and Workforce Development Department to report on existing City programs that provide regular and emergency assistance to Los Angeles’s iconic restaurants and to provide recommendations for additional programs that could support legacy restaurants in financial crisis.