Los Angeles Business Tax: BTRC Registration and Tax Rate Guide

October 29, 2026

If you conduct business inside the City of Los Angeles, you need a Business Tax Registration Certificate (BTRC) from the city's Office of Finance. The state filing that creates your LLC or corporation does not cover it, which is why many new owners miss this step. This guide explains who needs a BTRC, how to register at finance.lacity.gov, how the business tax is calculated, which exemptions exist, and when the annual renewal is due.

Disclaimer: This guide is informational content, not legal or tax advice. City rules, rates and deadlines can change. Confirm current figures with the Office of Finance before you file, and consult a qualified attorney or CPA if your situation is complex, such as mixed retail and wholesale sales, work both inside and outside the city, or multiple entities.

The BTRC Is a Tax Certificate, Not a Permit

The Los Angeles BTRC is issued by the Office of Finance. It is a tax registration. It does not approve your location or your business activity. Every person who engages in business within the City of Los Angeles must hold the certificate and pay the business tax, or qualify for an exemption. Regulated activities may require separate permits, which are covered later in this guide.

Who Does Not Need a BTRC

Some business types do not need to register. The following generally do not need a BTRC:

• Airlines
• Bail bond agents
• Notaries
• Real estate agents who are not brokers
• Persons renting three or fewer residential units
• Residential care facilities for six or fewer residents
• Residential family day care
• Businesses with no nexus in the city (six or fewer days a year)
• Taxicabs operating under a city franchise

Qualifying 501(c)(3) organizations are also exempt, but they must apply for the exemption. Confirm your category with the Office of Finance before you assume you are excluded.

How to Register for a BTRC

1. Go to finance.lacity.gov and start the online business tax registration application.
2. Enter your business details, activity classification and gross receipts information.
3. Once the application is complete, the city issues a temporary certificate or number so you can operate while you wait.
4. The permanent certificate is mailed to you, normally in about 4 to 6 weeks.

Keep the temporary certificate or number with your business records. Some customers, banks and licensing agencies ask for proof of registration.

Los Angeles Business Tax Rates

The business tax is charged on gross receipts. The rate is stated per $1,000 of gross receipts, or fractional part of $1,000. A rate of $4.25 per $1,000 equals 0.425 percent, not 4.25 percent. Use the table below to estimate your tax, then confirm your classification on the Office of Finance rate tables.

Classification	Rate per $1,000 of gross receipts	Effective rate
Professions and Occupations	$4.25	0.425%
Auto Parks	$4.25	0.425%
Miscellaneous Services (for example advertising agencies, check cashing, music teachers, public relations, temporary help and travel agencies)	$3.56	0.356%
Commission Merchant or Broker	$3.15	0.315%
Independent Telemarketing Agency	$3.15	0.315%
Personal Property Rental	$2.55	0.255%
Retail Sales	$1.27	0.127%
Rental of Dwelling Units	$1.27	0.127%
Rental of Commercial Property	$1.27	0.127%
Laundry, Cleaning, Dyeing, Linen Supply and Shoe Repair	$1.27	0.127%
Child Care Providers	$1.01	0.101%
Multimedia businesses (films, software, programming and web design)	$1.01	0.101%
Wholesale	$1.01	0.101%
Contractor	$153.00 for the first $60,000 of gross receipts, plus $1.01 per $1,000 above $60,000	See formula

Contractors Working Outside the City

An in-city contractor that performs work on out-of-city projects pays an additional $2.55 per $1,000 of salaries and fees for services performed in the city. Track those amounts separately from your gross receipts.

Mixed Retail and Wholesale Sales

A seller that does both retail and wholesale business must split its receipts and pay the rate for each category.

Service Businesses With Work Inside and Outside the City

A service business with work both inside and outside the city may be able to apportion its receipts under City Clerk's Ruling No. 15. Ask the Office of Finance how the ruling applies to your facts before you file.

Worked Examples

• Consultant in Professions and Occupations with $200,000 in gross receipts: 200 x $4.25 = $850.
• Retail shop with $200,000 in gross receipts: 200 x $1.27 = $254.
• Contractor with $250,000 in gross receipts: $153 + (190 x $1.01) = $153 + $191.90 = $344.90.

The contractor example works because the first $60,000 carries the flat $153 charge, and the remaining $190,000 (the amount above $60,000) is taxed at $1.01 per $1,000.

The Office of Finance publishes separate tables for activities that are not measured by gross receipts and for cannabis businesses. If your activity is not listed in the table above, check those tables before you estimate your tax.

The First Year Is Not Exempt

A new business is not exempt from the business tax in its first year, even if its gross receipts are small. The first year's tax is billed as back tax when the business renews in its second year. Some classifications also charge a minimum amount at registration. Budget for this cost from the start rather than treating the first year as free.

Business Tax Exemptions

• Small Business Exemption: Available to a registered business whose worldwide gross receipts are not above $100,000. You must renew on time each year to keep the exemption.
• Creative Talent Exemption: Covers up to $300,000 of receipts from creative activity for an individual creative artist or a loan-out company. You must be registered and renew on time.
• Nonprofits: Nonprofit organizations must apply for an exemption. Approval is not automatic.

An exemption still requires you to register. Missing the renewal deadline can cost you the exemption.

BTRC Renewal Deadline

The business tax renews every year. Renewal is due by the end of February, which means February 28, or February 29 in a leap year (2028 is the next leap year). You must renew even if your business had no revenue during the year. Check the Office of Finance each year for the exact renewal date and any changes to the process.

Other City Permits, Health Permits and Fees

Police, fire, alarm and tobacco retailer permits are separate from the BTRC. The online application shows which of these apply to your business. Each permit renews on its own cycle, and several renew on December 31, so track them separately from the February business tax deadline.

Every California local business license carries a $4 state fee, so add it to the local amount.

The Los Angeles County business license does not apply inside city limits. If you operate in the city, you register with the city, not the county. Food businesses need health permits from Los Angeles County Public Health, not from the city's Office of Finance.

If you have employees, check the city's current minimum wage and paid sick leave rules directly with the city. These requirements change, so confirm the current figure with the city before you rely on it.

State Requirements That Run Alongside the BTRC

The BTRC is one part of a larger setup. Most businesses also need the following:

• Entity filing with the Secretary of State: Articles of Organization (Form LLC-1) cost $70. Articles of Incorporation cost $100. You can file online through bizfile Online. Online filings are normally processed within about 5 business days or less. An LLC name can be reserved for $10 for 60 days.
• Statement of Information: An LLC files Form LLC-12 for $20 every two years. A corporation files Form SI-550 for $25 every year. The first report is due within 90 days of filing the articles. A missed LLC report can lead to a $250 penalty assessed by the Franchise Tax Board after a Secretary of State notice.
• LLC franchise tax: An LLC organized or registered in 2024 through 2026 owes the $800 minimum annual franchise tax starting in its first year. An LLC whose first taxable year begins in 2027, 2028 or 2029 pays $400 in year one under RTC 17941(g)(2), so confirm the first-year amount with the Franchise Tax Board. The LLC fee is $900, $2,500, $6,000 or $11,790 once California-source total income reaches $250,000, $500,000, $1,000,000 or $5,000,000.
• Fictitious business name: If you operate under a name other than your legal name, file a Fictitious Business Name Statement with the county clerk-recorder within 40 days of starting, publish it in a newspaper once a week for four weeks, and renew it before it expires after five years. The statutory fee is $10 plus $2 per additional name or owner, but counties charge more, so confirm the local fee.
• Seller's permit: If you sell taxable goods, register with the California Department of Tax and Fee Administration (cdtfa.ca.gov). The seller's permit is free. The statewide base sales tax is 7.25%, and city district taxes raise rates to between 7.25% and 11.75%. A resale certificate has no required form. The seller's permit is not a business license.
• Employer registration: If you have employees, register with the Employment Development Department.
• Licensed trades and professions: Contractors need a license from the Contractors State License Board for work with a total cost of $1,000 or more. Other regulated professions are licensed by state boards under the Department of Consumer Affairs. An LLC cannot render a licensed professional service, so licensed professionals generally use a professional corporation instead. California also does not allow a domestic series LLC.

California has no general statewide business license. The Secretary of State issues none, and the seller's permit is not a business license. Your LA BTRC is the city's registration, and your state filings are separate.

Next Steps Checklist

1. Confirm whether your activity needs a BTRC or falls under a no-registration category.
2. Find your classification and estimate the tax using the rate table, remembering that rates are per $1,000.
3. Check whether an exemption applies, and calendar the renewal deadline in late February.
4. Register your entity with the Secretary of State and file any required name or fictitious business name statements.
5. Check for a seller's permit, EDD registration, industry licenses and city or county permits for your activity.
6. Set aside funds for the first year's back tax, which is billed when you renew in your second year.

For free help with the state side of your plan, the California Small Business Development Center network at californiasbdc.org offers advising. The U.S. Small Business Administration's Los Angeles district office is listed at sba.gov/district/los-angeles.

Disclaimer: This guide is informational only and is not legal or tax advice. Verify all fees, rates and deadlines with the Office of Finance, the Secretary of State, the CDTFA or the Franchise Tax Board before you act, and consult a qualified professional for your specific situation.