Tax Holidays: Are You Taking Advantage of Yours?
Sometimes, there are benefits to a downtrodden economy! If you are thinking about starting a new business, or have recently stated a business, you may be may be eligible for a local tax holiday. Tax holidays are a temporary reduction or elimination of a tax, and are also referred to as tax abatements, tax subsidies, or tax reduction programs. They are usually created by government entities as incentives for business investment. Two examples of local tax holidays are provided below.
LOS ANGELES: the Mayor’s Office of Economic and Business Policy (OEBP) created the Business Tax Holiday, which exempts any new business from the City of Los Angeles’s gross receipts tax for three years when it is opened or located in Los Angeles.
A new business is one that has not previously paid business tax receipts and is not currently operating in the City of Los Angeles
To qualify for the Business Tax Holiday, a company needs to apply for a business tax registration certification (BTRC) and renew each year before March 1
Businesses are eligible for a full three years of exemption provided they open or locate in Los Angeles between January 2010 and December 2012. *In order to qualify, you must open your business by December 2012.
WEST HOLLYWOOD: The City of West Hollywood has provided for reduced tax rates for new businesses within their first two years of operation.
The Owner must pay the initial fee of $25, but the first year of operations are exempted from the Business Tax with the exception of the minimum tax.
The second year of operations are taxed at 50% of the normal rate. If a qualified “new business” is sold during its first two years, any unused months of new Business Tax credits are transferable to new business owners only if the prior owner filed a final Business Tax form and paid all Business Tax liabilities when disposing of the business.
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This article is for informational purposes only, and does not constitute legal advice or create an attorney-client relationship. This article does not make any guarantees as to the outcome of a particular matter, as each matter has its own set of circumstances and must be evaluated individually by a licensed attorney.