Los Angeles City Council Gives Internet Businesses A Tax Break

Last year the city put internet businesses in its highest tax bracket, causing 500 percent tax increases and inspiring as many as 1,000 such operations to skip town. On Friday a fix was made: The Los Angeles City Council put website-based businesses back into the lower category.

The move will cost the city $3.4 million in tax revenue, but proponents argued that L.A. was in jeopardy of losing the $6.8 million in tax revenue generated by the companies altogether if they all fled the city.

Mayor Antonio Villaraigosa sounded triumphant in a statement released by his office Friday afternoon: " ... The City is once again proving its commitment to generating jobs and providing a business friendly environment for every business. This ordinance will be instrumental in attracting, retaining, and growing the internet industry in the city of Los Angeles and the good paying jobs that this industry supports."

The council's move applies a new tax classification to about 1,400 online businesses in L.A.


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