January 7, 2022
San Francisco and Los Angeles have upcoming business tax filing deadlines
Local California business tax filing deadlines are quickly approaching and are often overlooked. As the upcoming federal and state tax filing season approaches, taxpayers should be aware of the following information on reporting and paying San Francisco and Los Angeles business taxes (as well as those in other localities throughout the state).
The due date for filing the San Francisco 2021 Annual Business Tax (SF ABT) return, which includes reporting and payment of (1) the Gross Receipts Tax (GRT) or Administrative Office Tax (AOT), (2) the Homelessness Tax (HGRT) or the Homelessness Administrative Office Tax (HAOT) and (3) the Commercial Rents Tax (CRT), is February 28, 2022. San Francisco's Payroll Expense Tax (PET), which applied in prior years, has been eliminated starting with the filing of the 2021 SF ABT.
Taxpayers can request a 60-day filing extension by filing the request in writing and paying at least 90% of the San Francisco taxes due by the filing deadline. The SF ABT return and tax payment must be filed electronically using the city's 2021 SF ABT Portal, which is not publicly available as of the date of this Tax Alert.
Additional information regarding the SF ABT is available on the city's website.
In addition to the SF ABT, San Francisco also requires payment of a Business Registration Tax. Taxpayers must annually register or renew their business registration. The due date for this year's business registration or renewal is May 31, 2022.
The due date for filing the Los Angeles 2021 Business Tax return is February 28, 2022. Taxpayers can file their 2021 Los Angeles Business Tax forms either by mail or electronically. Downloadable forms to file by mail and the electronic filing system are accessible through the city's website. To be considered timely filed, a taxpayer's forms must be submitted electronically or postmarked no later than 11:59 PM PST on February 28, 2022.
Taxpayers can apply for a maximum filing extension of 45 days. An extension request must be made in writing, accompanied by the payment of at least 90% of the total tax due, and received or postmarked by February 28, 2022.
Additional information about the Los Angeles Business Tax renewal process is available on the city's website.
Other California local business taxes
California taxpayers should not assume that San Francisco and Los Angeles are the only municipalities that impose local business license taxes or fees. Nearly every California municipality does so but the types of levies, tax bases and filing requirements and deadlines for such tax returns vary widely from locality to locality. For example, like neighboring Los Angeles, the City of Santa Monica imposes a gross receipts tax on businesses operating in the city but the returns and payments are due on August 31 of each year.
Unlike state or local income taxes in other states, California local business taxes generally do not exclude from payment business entities based on organizational form. Thus, partnerships and limited liability companies that are treated as pass-through entities for federal and California state tax purposes (or disregarded altogether) could be directly liable for a variety of California local taxes.
If a business is active in California, especially in the larger municipalities, a best practice is to assume that some form of local business tax applies. Information about these special and unique local taxes can usually be obtained from the relevant locality's webpage. EY California tax professionals are available to assist businesses both in determining which and whether these business taxes apply and then complying with the applicable payment and filing requirements.