LA Mayor Villaraigosa wants to lure car dealers by dropping tax

Toyota Prius hybrid model cars wait for

Mark Ralston/AFP/Getty Images

Toyota Prius hybrid model cars wait for customers at a Toyota dealer in Hollywood, California on March 10, 2010.

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.

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