Business & Economy

LA Mayor Villaraigosa wants to lure car dealers by dropping tax

Toyota Prius hybrid model cars wait for customers at a Toyota dealer in Hollywood, California on March 10, 2010.
Toyota Prius hybrid model cars wait for customers at a Toyota dealer in Hollywood, California on March 10, 2010.
Mark Ralston/AFP/Getty Images

Los Angeles Mayor Antonio Villaraigosa wants to lure new car dealers to Los Angeles by eliminating city business taxes for auto dealers.

The mayor's business-friendly proposal is designed to reverse the decades-long flight of new car dealerships to other cities.

Villaraigosa plans to unveil the plan during a Tuesday news conference to announce relocation of Beverly Hills Porsche to Los Angeles, the second dealership in 25 years to open in the city.

A local wire service says that during the same quarter-century, 95 car dealers left Los Angeles for cities like Glendale, Burbank and Pasadena that have very low business taxes or none at all.

The mayor says the business tax is self-defeating because it produces only limited revenue while scaring away auto dealers that would otherwise generate substantial sales tax revenue.