Remember when I mentioned that the city had a tax amnesty program for businesses? Well it was pretty successful. The city hoped to make about 10 million in taxes and they made at least 7 (or was it 8 million) which isn’t too shabby. The deadline for fighting the city’s serious budget shortfall was July 31 2009 and Mayor Antonio Villaraigosa urged businesses and residents on Wednesday to pay delinquent taxes before the city’s tax amnesty program ended.
Officials in the city (and state) believe upwards of 80,000 businesses owe the city $280 million in taxes – money either unpaid or underreported by businesses and individuals. Through July 31, 2009, city scofflaws could have paid back taxes without penalties, which normally range up to 40 percent. Now Mayor Villaraigosa said he will have auditors will looking to find those firms which have not paid. Yes, forty percent. That is a huge penalty and I have been telling my clients for years to pay their business tax so they can avoid getting dinged by penalties which can be very stiff – especially if you aren’t making money in the down economy.
To paraphrase Valley Industry and Commerce Association board member Mel Kohn, who has been involved in the city’s business tax reform effort, the boardmember praised the amnesty program that began May 1 as a way to make sure all business pay their share.
“If businesses pay what they owe, it will be less for all of us,” Kohn said.
Veronica Perez Becker of the Central City Association offered a different take on the program:
“This is like a bailout for businesses, to pay their taxes without penalties,” she said. I would agree with her because that was a pretty fair and thoughtful way for the city to let people get caught up, collect money and get back on track. I still don’t get how otherwise sane people decide to not pay business taxes especially if they are working in the same city that they live and do business in. Eh, who knows what lurks in the minds of the small and large business person.
I seriously doubt there will be any more amnesty programs for awhile since state and local governments are facing budget shortfalls and even though there may not be a public statement that there will be no new taxes you can bet that the collection of existing or back taxes will be enforced and strictly.
Just a reminder to that it isn’t that far away for your quarterly taxes and you should be putting aside cash for paying your quarterly taxes for both the Fed and respective state taxing authorities.
Hey, how is everybody adjusting in California to the higher ugh sales tax? I still get sticker shock when I see 9 plus percent for taxes added on for purchases and I really want somebody to do something to get business to get going back in California but I can’t blame people for being gunshy from starting up gigs.
Judging from the amount of restaurants I have seen and for some of the very low end (food trucks) and high end (some restaurants in Encino, Long Beach, and other parts of Southern California) people seem to be still eating out in some moderation and in some cases excess. Got any great recipes? If so, think about if you have the head for running a catering truck or opening a restaurant. You might get some decent leases with the Depression and be able to try and make it a go from three months to a year. Do your own research and be willing to put in killer hours though for the next few years.
Going full circle on this blog entry, please be sure to also take into account your business taxes and be honest on what you can expect to make your first year in making your estimates. The general cycle for new restaurants is at first a small pop to get to see if they like your food, followed by either a growing, hungry base of customers or it levels off to nearly nothing if they hate your cooking until you tweak your prices or change recipes.
What else is new – ah, expect the stock market to pop a bit more, I was shocked it actually rallied at the end of last week. I had expected it to go up just a scootch but it seemed to roar a bit on news about the economy. Personally, I am too much of a realist to hold my breath on things till more people start to get their jobs or hours back.
Talk to you later.
August 03 2009
Also, please don’t quite go anywhere yet. Having some tax issues or tax questions? Any problems with trying to make it through the financial Depression we are in that is making you depressed? Please read on.
I am expanding my practice and taking on new tax clients. If you are interested in having somebody who is a successful businessman and tax professional with integrity review your returns discretely and see if your tax guy or gal is doing a good or goofy job, please drop me an email or post a comment with your contact information and time.
I have experience in international business, small businesses, partnerships, multi-state tax returns (they can get complicated) and anything else you can probably think of.
I also do business consulting and have ran several businesses (still running a few) myself so you are in good hands.
If you are looking for a day job, part time work, suggestions for saving money or investing, please check out my book, Practical Money Making, that is listed right after his paragraph in this very post. There are some great suggestions and ways to survive the Depression we are in.
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Have you read my book, “Bad Tax Idea, Good Tax Idea“? Please order it today. The tips inside can save you hundreds if not thousands of dollars! Tax planning should be done year round and not just two weeks into January or later.
Part of all the proceeds from the sales of that book go to Rett Syndrome research. One girl is born with Rett Syndrome worldwide every fifteen minutes. My daughter Arianna has Rett.
Kim Isaac Greenblatt
Tax amnesty LA Biz Ended