I am proud to report that City Council has just unanimously passed the Business Tax Holiday and other tax-friendly reforms! This action will without a doubt create jobs in Los Angeles, and lay the foundation for future economic growth.
The Business Tax Holiday, developed by my office, is a simple idea. To encourage businesses to start up or relocate to LA, we will exempt all new Los Angeles enterprises from any gross receipts tax for three years.
The effectiveness of this tax reform has already been proven. My office commissioned a study at USC Marshall School of Business that suggested the Business Tax Holiday would yield NO loss in tax revenue. In fact, it would spur enough job growth to create more tax revenue. USC Professor Swenson expects that the Business Tax Holiday will create an estimated 55,000 new jobs and that each new company will generate a net revenue increase of more than $8,000 to the City.
The Business Tax Holiday is just the latest effort by our office to help attract, retain and grow businesses in Los Angeles. Our office has already worked to create the Internet Business Tax to provide tax relief to existing, highly mobile companies, and expanded the State Enterprise Zone so more companies could take advantage of various state and local taxes and power rate incentives.
I would like to especially thank Councilmembers Parks, Alarcon, and Smith for their strong leadership in pushing this through Council. Each has been a critical partner in shepherding this important tax reform towards approval.
Together, with the City Council, we sent the message loud and clear that Los Angeles is committed to leveraging every resource it has to attract businesses and put Angelenos back to work.
To access the USC study view the press release here.