Los Angeles officials issued a final reminder Thursday to delinquent business taxpayers, asking them to come forward and pay up--or in some cases promise to pay up--before the city's offer of tax amnesty expires on Tuesday, three working days away.
By Monday, the city had collected $2.1 million in overdue taxes and interest since the amnesty period began Oct. 1, City Controller Rick Tuttle said. With that much in hand, city officials said they were confident that collections would exceed the $2.3-million target amount.
"Amnesty is a one-time chance for businesses to pay back taxes with no penalties, no questions asked," said Tuttle, flanked at a City Hall press conference by Los Angeles Area Chamber of Commerce President Ray Remy and Councilman Howard Finn, author of the amnesty ordinance.
"But when amnesty ends, the crackdown begins," Tuttle warned.
Pay in Full
To qualify for amnesty, taxpayers must appear before 5 p.m. Tuesday at City Hall or at four satellite municipal offices in Van Nuys, San Pedro, West Los Angeles and South-Central Los Angeles. If they owe up to $750, they will be required to pay in full before the deadline. For those who owe more than $750, installment payments may be arranged.
Those who fail to meet the deadline will face not only a 40% civil penalty but also will be subject to criminal prosecution and a sentence upon conviction of up to six months in jail, Tuttle said.
The city attorney's office, which until now has declined to criminally prosecute business tax delinquents, has promised that it will in the future, Tuttle said. Finn said he plans to ask the council to divert part of the money obtained from delinquent taxpayers to the city attorney's office to help pay for prosecutions.
In addition, the city clerk's office, which collects business taxes, will increase its field investigator force by 18 in January, bringing to 60 the number of city employees charged with tracking down non-paying businesses. Don DeBord, chief of the city clerk's tax and permit division, said another 15 people will begin a six-week training program for investigators in January.
"There's going to be more enforcement by tax and permits than there has been in the past," DeBord said.
The tax amnesty, approved by the City Council in August, covered all business and payroll expense taxes. Under the program, delinquent taxpayers were required to pay the tax principal and interest, but penalties were forgiven and prosecutions were waived.
Since amnesty began, more than 8,700 delinquent business entities have paid up, DeBord said. Although the average tax amount paid by procrastinating business owners was $243, amounts as small as 1 cent and as much as $102,500 have been received, city officials said.
Operate in City
Overall, Los Angeles collects $183 million in taxes from 220,000 businesses operating within the city.
Although the amnesty program appeared to have hit its monetary target, city officials acknowledged that the $2.1 million collected is only a small portion of the $10 million in business taxes known to be owed the city, Tuttle said. Another $20 million to $100 million may be owed by businesses that the city has yet to track down, he estimated.
City officials said they do not plan to monitor future tax payments by businesses that paid under the amnesty program.
"They should be treated like everybody else. That's the whole spirit of this program," Tuttle said.