Mayor Antonio Villaraigosa on Tuesday praised a local business for not leaving L.A. and, at the same time, backed a proposed three-year “tax holiday” for out-of-town businesses that locate in the city. Nothing says your city leader is confident in its economy like a press conference touting a company's decision not to head for the hills. The biotech firm in question, Baxter International, stated its decision was inspired by the city's expansion of a business-friendly East Los Angeles State Enterprise Zone.
The three-year break on city “gross receipts tax” would expand the deal that used to cover relocated businesses that were worth less than $500,000 a year in revenue for only two years.
The expanded tax holiday is being proposed by councilmen Richard Alarcon and Greig Smith. USC's Marshall School of Business looked at the plan and liked it, according to Villaraigosa's office:
“The new policy will lead to the creation of up to 55,000 jobs and generate additional revenue for the City of Los Angeles,” stated USC Professor Charles Swenson. “In addition, the multiplier effect of additional economic activity in the City nets a positive revenue impact.”
The mayor's office also states that the L.A. Department of Water and Power is considering offering a 25 percent utilities discount to businesses that relocate to the city.