City accounting officers warn against eliminating LA business tax

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File photo: Los Angeles City Hall

In an effort to become more business friendly, the mayor of Los Angeles and some members of the city council want to lower or eliminate the city’s gross receipts tax on businesses. On Wednesday, the folks who manage the city’s budget warned against that idea.

John Wickham with the City’s Chief Legislative Analyst’s office spoke Wednesday to the City Council’s Jobs and Economic Development Committee. He said the gross receipts tax on businesses is one of the few sources of tax revenue the city controls.

"We’re not subject to the state or the federal government in how we manage this tax," said Wickham. "There are other cities, major important cities in our region that are collecting a business tax that are not eliminating their business tax. It’s an important revenue source that municipal governments use."

For their part, Mayor Villaraigosa and City Council President Eric Garcetti argue the tax chases businesses out of L.A. and slows down job creation.

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