Local California municipal tax filing deadlines are quickly approaching and are commonly overlooked. While preparing for the upcoming federal and state filing season, taxpayers should keep in mind the following business tax filing obligations in San Francisco and Los Angeles.

San Francisco

San Francisco's 2018 gross receipts tax and payroll expense tax are due on or before February 28, 2019. A taxpayer may request a 60-day extension in writing provided the taxpayer files the request in writing and pays at least 90% of the tax due by the filing deadline.

In addition to the gross receipts tax, San Francisco also requires payment of a business registration fee. Taxpayers must register or renew their business registration every year. The due date for registration or renewal is May 31, 2019. The business registration fee may be filed online on the San Francisco Treasurer's website.

Los Angeles

The Los Angeles business tax is due on or before February 28, 2019. A taxpayer can file its 2018 Business Tax Renewal Form either by mail or electronically. The city provides both copies of its forms for download and completion as well as access to an electronic filing system (with applicable instructions) on its website. To be considered timely filed, a taxpayer must postmark or electronically file the forms no later than 11:59 pm PST on February 28, 2019. Interest and penalties will be assessed starting March 1, 2019.

Taxpayers can apply for a maximum filing extension of 45 days. An extension request must be made in writing, accompanied by at least 90% of the total tax due, and received or postmarked by the February 28, 2019 filing deadline.

Additional information about the Los Angeles business tax renewal process is available here.

Implications

By no means should taxpayers assume that only San Francisco and Los Angeles are the only California municipalities that impose local business license taxes. Nearly every California municipality does and the variety of these levies varies widely from locality to locality. As an example, the City of Santa Monica also imposes gross receipts tax but unlike the San Francisco or Los Angeles levies, returns and payments are due August 31. Moreover, unlike state or local income taxes in other states, business entities are not exempt from these taxes based on their form. That is, partnerships and even limited liability companies that are treated as pass-through entities for federal, and even California state, tax purposes (or even disregarded altogether) could be directly liable for the myriad of California local taxes.

It's a best practice for companies, especially those in larger municipalities, to assume that some type of business license tax applies. Usually, information about these special and unique city taxes can be obtained from the relevant municipality's webpage.

EY California tax professionals stand ready to assist businesses with obtaining information about the business license taxes and in complying with the applicable payment and filing requirements.

———————————————