The first year of new business activity in the City of Los Angeles is not exempt from taxation. The first year of taxes is paid in the second year when you renew your BTRC. This is referred to as the BACK TAX.
When a new business activity subject to tax is started, it is required that the minimum tax be paid with the application. At the end of the first business tax calendar year it is required that a statement of the entire first calendar year's gross receipts be filed and payment made of any tax due in excess of that paid at the time of the application. This is applicable even if the business activity is terminated during the first calendar year of such activity. The tax for the first and second calendar years are each measured by the gross receipts of the first calendar year. Consequently, the tax for the first and second calendar year is always in the same amount.
If your global gross receipts are under $100,000 and you renew on time, you are eligible for the Small Business Exemption. Please make sure to check the appropriate box on the Renewal Form to be mailed or emailed to you. Learn more here.