SEC. 21.03. IMPOSITION OF TAX.

(a) Subject to the provisions of this Article, a business tax registration certificate must be obtained and a business tax must be paid by every person engaged in any of the businesses or occupations specified in this Article; and a business tax is hereby imposed in the amount prescribed in the applicable section. No person shall engage in any business or occupation subject to tax under the provisions of this Article without obtaining a registration certificate and paying the tax required. (Amended by Ord. No. 181,696, Eff. 6/ 18/11.)

(b) The business tax registration certificate required to be obtained and the tax required to be paid are hereby declared to be required pursuant to the taxing power of the City of Los Angeles solely for the purpose of obtaining revenue. Compliance with such requirements shall not be construed to be a condition precedent to engaging in any business or occupation within the City of Los Angeles where the imposition of such a condition precedent would be contrary to law.

(c) Commencing on January 1, 1981 the Director of Finance is directed not to enforce the Business Tax Ordinance against financial corporations for the tax years beginning January 1, 1981 until directed to do otherwise by the City Council by resolution. (Added by Ord. No. 154,914, Eff. 4/2/81.)

(Title and Section Amended by Ord No. 176,324, Eff. 1/16/05, Oper. 1/1/06.)

Commencing with the tax year 2006, the tax rates contained in this Article which are based upon gross receipts shall be reduced by up to 4% per year. The maximum total rate reduction shall be 15% from the rates imposed as of December 31, 2005. The yearly tax rate reduction shall be calculated by the Director of Finance on a percentage basis rounded to the nearest one-tenth percent (1/10%) from the net increase in business tax revenue above a baseline. Net business tax revenue shall be the amount credited as Business Tax in the Statement of Receipts published in the annual Controller’s Preliminary Financial Report. The baseline shall be the revenue forecast for business tax receipts prepared in conjunction with the 2004-2005 City budget set forth as follows:

Fiscal Year Revenue Forecast

2004-2005 $384,815,000 2005-2006 $400,977,000 2006-2007 $417,016,000 2007-2008 $433,697,000 2008-2009 $451,045,000 2009-2010 $469,087,000

The baseline revenue forecast for each year beyond the 2009-2010 shall be calculated based upon a 4% per annum increase from the previous year.

There shall be no tax reduction in any year in which the net revenue increase is less than one percent (1%). Any percentage increase below one percent (1%) shall be carried over and added to the next year percentage increase for purposes of calculating the rate reduction for that year.

The Director of Finance shall issue a detailed annual report on the net business tax revenue received each fiscal year and the basis for all calculations and carryovers and shall publish or otherwise publicize the revised rates for each year.