Tax time is upon us and the City of West Hollywood wants its share too.
Home businesses, independent contractors and freelancers conducting business activities within the city limits of West Hollywood are required to file for a Business Tax Certificate.
The City of West Hollywood provides reduced tax rates for businesses within their first two years of operations:
- During the first 12 months of business operations — After payment of the initial fee of $29, business operations are exempt from business tax, with the exception of the minimum tax of $24 to $72 per year depending on the business category plus the AB 1379 State of California $4 fee.
- During the second 12 months of business operations — Business operations are taxed at 50% of the normal rate, as long as the tax due is not less than the minimum.
Businesses should register for a Business Tax Certificate within 30 days of the start of business operations. Registration information is available online at: https://blt.weho.org/Apply/GettingStarted/BusinessLicense. Registrants must be certain to have all of the following items available to complete registration:
- Legal business name and fictitious name (DBA)
- Business start date
- Business activity description
- Business contact information — contact name, phone number and email
- Business address and primary mailing address (if different)
- Social Security Number — if a business is a sole proprietorship or a Federal Identification Number (EIN) if a business is a partnership, a corporation, a Limited Liability Company (LLC), or a Trust.
Pursuant to the city’s municipal code, businesses located in or performing work within the city limits of West Hollywood are required to complete a business tax form each year and pay business tax for the prior year. Anyone conducting business in the city must have a Business Tax Certificate. That certificate ensures that businesses receive important City updates and are eligible for future grant programs.
There are certain business activities that are exempt from the city’s business tax, including home occupation businesses that do not employ or retain services of any other person and that are owned and operated by an individual (not a partnership, corporation, or other form of business association). Businesses that are exempt from paying business tax must still submit a Business Tax Exemption Application form to the city in order to be registered as exempt and pay a one-time fee of $29 ($25 City fee and $4 mandatory State fee). Once the business exemption is granted, a business is exempt from needing to pay additional annual taxes, so long as the person claiming the exemption continues to engage in the same business or activity for which the exemption was claimed.
Certain reduced fees for Business Tax Certificates were approved by the City Council at its Feb 16 meeting as part of the city’s efforts to respond to the COVID-19 pandemic and support local businesses. A 50% reduction in Business Tax Certificate fees for fiscal year 2020-21 as applied to calendar year 2020 business tax payments was approved at that time, except for taxes and fees paid by cannabis businesses. In 2020, the city also reduced its Business License Regulatory Fees by 25%.
The city’s website features up-to-date information regarding business tax requirements at www.weho.org/business/operate-your-business/annual-renewal-requirements. In addition, the city’s ‘Open My Business’ portal, https://openmybusiness.weho.org/, provides commercial business (rather than home-based businesses) a breakdown of the permits needed to start a business in the city. The interactive portal curates responses specific to the information that the applicant provides. Businesses that have not applied for a Business Tax Certificate within 30 days of starting a business will not be penalized for delinquent taxes. The program will encourage businesses to submit information for the current year and remain in compliance, going forward.
For more information about applying for and obtaining a Business Tax Certificate, please contact city’s Accounting/Finance Specialist, Laura D’Ambrosia, at (323) 848-6319 or at ldambrosia@weho.org.
