Spearheaded by the Ad Hoc Committee on Business Tax Reform Council members Wendy Greuel and Eric Garcetti, and strongly supported by Committee Chair Tony Cardenas, the guiding principal behind the reform package is to create a tax system that works to attract business, create jobs and invest in Los Angeles' economy-the 11th largest economy in the world. The overall goal is to reduce substantial tax burdens and simplify the city's tax system, making it more equitable and business friendly. The reform also invests in the economy by further targeting tax relief for small and medium sized businesses.
The Greuel-Garcetti Tax Reform Package will:
- eliminate the business tax for small businesses providing tax relief for 61% of all businesses currently paying the city's business tax
- give a 15% across the board tax cut for the remaining businesses and eliminate the tax on "bad debts"
- reduce the tax burden on small and medium sized production companies by adjusting the scale at which companies pay taxes
- eliminate the home business tax on individual artists earning up to $300,000 in gross receipts
- simplify the system by reducing the total number of tax fund classes from 75 to 7
- simplify the system giving taxpayers the option of paying cash or an accrual basis
The package provides a total of $92 million in tax relief, and pays for itself by using a combination of Tax Reform Trust Fund monies, increased compliance, and growth in business tax revenues. "Coupled with our superior, skilled workforce," said Councilmember Greuel, "these tax incentives will combat runaway production, bringing filming back home to Los Angeles."
Over the past few years, the DGA along with other guilds and unions worked hard for the elimination of the home business tax, which impacted our individual members, and strongly supported reducing the tax burden on small and medium sized production companies, which had a particularly large impact on commercial production houses.
DGA issued a statement along with the Writers Guild of America, west; Screen Actors Guild; American Federation of Television and Radio Artists; Professional Musicians, Local 47, AFM; Art Directors Guild, IATSE, Local 800; Association of Independent Commercial Producers; Affiliated Property Craftpersons, Local 44, IATSE; Recording Musicians Association of Los Angeles; and the Film Musicians Secondary Market Fund regarding the November 17, 2004 unanimous vote for tax reform by the Los Angeles City Council:
"...We applaud Councilmembers Wendy Greuel, Tony Cardenas, Eric Garcetti, and Tom LaBonge for their leadership, and the Mayor and the entire City Council for their commitment to the people of Los Angeles. We also commend the Business Tax Advisory Committee and Citizens for Business Tax Reform Now, which both worked to make this reform a reality."
The business tax reform package was signed into law by Mayor Hahn on December 6 and will go into effect January 1, 2005.
