Influencers & creators guide to business licenses: LA edition
In the infamous words of Shawn Carter, “you’re not a businessman; you’re a Business, man.”
As a business, you need all your ducks in a row when it comes to taxes. I know this can seem daunting, but that's why we are here to help. We’ve combined a couple of FAQs that business owners wonder about or may have regarding their business. Hopefully, we can ease some of your stress!
Do I need to register for a Business Tax Registration Certificate?
The City of LA requires that anyone doing business within the city obtains a Business Tax Registration Certificate. There is a limited group of those who are not required to obtain a certificate. They are specifically listed out, and the list can be found here: No Registration Certificate Required
Is this a tax or a business license?
The Business Tax Registration Certificate is LA’s form of a business license. You are required to pay a fee to obtain the certificate.
Is there a fee for the Business Tax Registration Certificate?
There is a fee associated with obtaining and renewing your Business Tax Registration Certificate. Unless you are exempt, you will need to pay this fee in order to receive your certificate.
How do I qualify for a Business Tax Registration Certificate Exemption?
There are a few special exemptions for small businesses that the LA Office of Finance offers. There are two popular exemptions you should know:
- The exemption for small businesses - Small businesses with less than $100,000 in receipts per year do not need to pay business taxes for their first two years.
- The exemption for Creative Artists - Creative artists who participate in certain creative activities with qualified gross receipts of $300,000 or less per year do not need to pay this tax.
Who are creative artists?
The City of LA defines a creative artist as “only a person who operates either (1) as an individual, (2) through a corporation with one individual as the only shareholder and the only employee (commonly referred to as a "loan-out"), or (3) through a limited liability company with one individual as the only member and the only employee.” If there is more than one person in your business, you will not be considered a creative artist.
What do creative activities mean?
Creative activities are defined by the City of LA here: Creative Activities Exemption Statute. In short, creative activities are acts of entertainment, art making, photography, etc. If you are a lifestyle or beauty influencer, you will likely not qualify for this exemption.
I’m a creator, and I have a small business that made under $100,000. Can I use both exemptions at once?
No. You are only allowed to apply for one exemption at a time.
Is the small business exemption or creative artist exemption automatic?
No. You have to apply for each exemption. You can apply for the exemption through the Business Tax Registration Certificate renewal system: https://finance.lacity.org/online-taxpayer-services
To learn if you qualify for the small business exemption or the creative artist exemption, you should contact a tax professional to evaluate your specific situation.