While the California corporate income tax garners substantial attention from taxpayers doing business in California, municipalities also impose entity-level taxes on businesses that deserve close consideration. These local business taxes may involve more opportunities and traps for the unwary than one would initially perceive. The California city business taxes require an analysis of numerous variables, including industry classification, payroll size, gross receipts, and apportionment rules for in-city and out-of-city activities. In this Alert, we focus on the municipal-level tax imposed by the most populous city in California, the Los Angeles Business Tax.
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