MAYOR VILLARAIGOSA’S PROPOSED “BUSINESS TAX HOLIDAY” FOR NEW BUSINESSES IN LOS ANGELES SHOULD HELP ECONOMIC DEVELOPMENT AT NATION’S LARGEST CONTAINERPORT
Sends message that businesses can prosper and create jobs in Los Angeles
LOS ANGELES – June 15, 2010 – Mayor Villaraigosa and Council Members Richard Alarcon and Greig Smith today proposed a “Business Tax Holiday” for new businesses opening in Los Angeles. The Business Tax Holiday, proposed by OEBP, exempts any new business from gross receipts tax by the City of Los Angeles for three years when they open or locate in Los Angeles. A new business is one that has not previously paid business tax receipts and not currently operating in the City of Los Angeles.
"Today we are bearing the fruit from an aggressive strategy by the Mayor’s Office of Economic and Business Policy (OEBP), led by Austin Beutner, that is working to attract businesses and create the good paying jobs Angelenos need to see them through these tough economic times," said Mayor Villaraigosa.
“I applaud Mayor Villaraigosa and the City of Los Angeles on their continuing efforts to bring companies and jobs to the Los Angeles area. For our economy to recover we need the private sector to add jobs, and the proposed Business Tax Holiday and recent expansion of the East Los Angeles Enterprise Zone are two surefire ways to do exactly that,” said Governor Arnold Schwarzenegger. I look forward to celebrating the passage of the Business Tax Holiday and the new businesses it will bring to California.”
“We continue to work to develop and implement policies to help retain the employers who are located in Los Angeles and to attract new businesses providing good paying jobs” said First Deputy Mayor and Chief Executive for Economic and Business Policy Austin Beutner. “Our creation of this Business Tax Holiday will lead to many new businesses opening in Los Angeles.”
“This is good news for the Port and LA Harbor community,” added Port of Los Angeles Executive Director Geraldine Knatz, Ph.D. “It’s another way to attract the next generation of companies serving the maritime and goods movement industries here at the nation’s largest trade gateway. In particular, the proposed business tax moratorium should provide a shot in the arm to PortTechLA, a San Pedro-based technology incubator that is working to bring new “green collar” businesses and jobs to the Harbor Area.”
According to independent analysis from the Marshall School of Business at the University of Southern California, the tax holiday will create revenue for the City and will serve as an incentive for businesses to locate in the City of Los Angeles. “The new policy will lead to the creation of up to 55,000 jobs and generate additional revenue for the City of Los Angeles,” stated USC Professor Charles Swenson, PhD, who conducted research specifically for the Business Tax Holiday. “In addition, the multiplier effect of additional economic activity in the City nets a positive revenue impact.”
Specifically, new local businesses and their employees will purchase goods and services from other local businesses which will, in turn, pay business tax receipts to the City on their incremental revenues. New businesses and their employees pay sales tax, and the City will capture its share of these revenues.
Frank Gilliam, Dean of the UCLA Public Policy School, added “This Policy is sound and a very effective way for Los Angeles to demonstrate it wants to support business.”