Starting a Business in West Hollywood - Q&A:
Are you starting a business? Here are some first steps and guidelines that you should know. After you've established your business and are ready to start networking and plugging into the West Hollywood community come to the West Hollywood Chamber and sign up for a Membership today!
Q. What types of businesses operating within West Hollywood city limits are required to have a Business Tax Certificate and pay an annual Business Tax?
a. If your business began operating within West Hollywood prior to January 1, 2004 you are required to have a Business Tax Certificate.. Additional forms may be forwarded to you as needed, to request forms you may call the Business Tax Hotline: 323-848-6554.
Q. Are there any tax benefits for new businesses?
a. The City of West Hollywood has provided for reduced tax rates for new businesses within their first two years of operation. You must pay the initial fee of $25, but the first year of operations are exempted from the Business Tax with the exception of the minimum tax. The second year of operations are taxed at 50% of the normal rate. If a business that qualifies for a new businesses sold during its first two years, any unused months of new Business Tax credits are transferable to new business owners only if the prior owner filed a final Business Tax form and paid all Business Tax liabilities when disposing of the business.
Q. Are certain businesses exempt from the Business Tax?
A. Yes, the following types of businesses are exempt:
1. Home occupations that do not employ or retain services of any other person(s). To qualify for the home occupation exemption the following conditions must be met:
a. The business must be owned and operated by an individual. Partnerships and other corporations do not qualify.
b.The business must be operated in (not based out of) the personal residence of the person claiming the exemption.
c. The business activities must be permissible under the zoning ordinance and land use regulations.
d. The business may not involve the services of any other person other than the person that claims the exemption.
2. Charitable organizations
3. Entertainment events for Non-Profit organizations
4. Employee services to his/her employer
5. Management of self-owned residential real estate property
6. Public utilities for telecommunications services.
7. Anyone whose payment of taxes would be in violation of the laws of California or the Constitution.
Q. How do I file for an exemption?
a. Any businesses claiming an exemption from the Business Tax must file a statement of exemption form which is $25 from the City Finance Department.
Q. I have multiple business locations and activities, how does the Business Tax certificate effect me?
a. A separate tax certificate is required for each type of business conducted at a single location or for each branch.
b. A combined tax certificate can be filed if two or more business activities at a single location are taxed at the same rate.
Effective Dates, Due Dates & Late Penalties
Are you starting a business? Here are some first steps and guidelines that you should know. After you've established your business and are ready to start networking and plugging into the West Hollywood community come to the West Hollywood Chamber and sign up for a Membership today!
Q. What types of businesses operating within West Hollywood city limits are required to have a Business Tax Certificate and pay an annual Business Tax?
a. If your business began operating within West Hollywood prior to January 1, 2004 you are required to have a Business Tax Certificate.. Additional forms may be forwarded to you as needed, to request forms you may call the Business Tax Hotline: 323-848-6554.
Q. Are there any tax benefits for new businesses?
a. The City of West Hollywood has provided for reduced tax rates for new businesses within their first two years of operation. You must pay the initial fee of $25, but the first year of operations are exempted from the Business Tax with the exception of the minimum tax. The second year of operations are taxed at 50% of the normal rate. If a business that qualifies for a new businesses sold during its first two years, any unused months of new Business Tax credits are transferable to new business owners only if the prior owner filed a final Business Tax form and paid all Business Tax liabilities when disposing of the business.
Q. Are certain businesses exempt from the Business Tax?
A. Yes, the following types of businesses are exempt:
1. Home occupations that do not employ or retain services of any other person(s). To qualify for the home occupation exemption the following conditions must be met:
a. The business must be owned and operated by an individual. Partnerships and other corporations do not qualify.
b.The business must be operated in (not based out of) the personal residence of the person claiming the exemption.
c. The business activities must be permissible under the zoning ordinance and land use regulations.
d. The business may not involve the services of any other person other than the person that claims the exemption.
2. Charitable organizations
3. Entertainment events for Non-Profit organizations
4. Employee services to his/her employer
5. Management of self-owned residential real estate property
6. Public utilities for telecommunications services.
7. Anyone whose payment of taxes would be in violation of the laws of California or the Constitution.
Q. How do I file for an exemption?
a. Any businesses claiming an exemption from the Business Tax must file a statement of exemption form which is $25 from the City Finance Department.
Q. I have multiple business locations and activities, how does the Business Tax certificate effect me?
a. A separate tax certificate is required for each type of business conducted at a single location or for each branch.
b. A combined tax certificate can be filed if two or more business activities at a single location are taxed at the same rate.
Effective Dates, Due Dates & Late Penalties
- Business Tax Year
The Business Tax is based upon business conducted within the City of West Hollywood during a calendar year (January 1 - December 31). - New Businesses
Initial business tax applications should be filed within 30 days of the start of business operations. - Due Dates for Renewals
The Business Tax may be paid as early as February 1 of the year the taxes are due. Payment is due no later than May 1 of the year the taxes are due. Payments received after this date are delinquent and are subject to penalties as follows:
| From | To | Penalty | Interest |
|---|---|---|---|
| May 2, 2016 | June 1, 2016 | 15% of tax | None |
| June 2, 2016 | July 1, 2016 | 30% of tax | None |
| July 4, 2016 | July 29, 2016 | 45% of tax | None |
| August 1, 2016 | After | 50% of tax | 1/2% per month |
If payment is made after August 1, interest is assessed (IN ADDITION TO PENALTIES) as follows: one-half of one percent (1/2%) per month or portion of a month, until the tax is paid.
Payment Receipt Date.
If payments are mailed, the U.S. Postal Service postmark on the envelope in which payment is received will be considered the date of receipt. All other payments will be issued dated receipts.
To apply for your business license with the City of West Hollywood please click here or call the Business License Office at (323) 848-6375
To view the City's Info Map for the different development going on in the City please click the image below.
Payment Receipt Date.
If payments are mailed, the U.S. Postal Service postmark on the envelope in which payment is received will be considered the date of receipt. All other payments will be issued dated receipts.
To apply for your business license with the City of West Hollywood please click here or call the Business License Office at (323) 848-6375
To view the City's Info Map for the different development going on in the City please click the image below.
