Cost of Doing Business in Los Angeles County

While it is a major urban area, Los Angeles County is competitive cost-wise for the scope of opportunities in the region. And while the cost of doing business is competitive, the actual business costs vary depending on the following factors:

  • Type of Business
  • Size of Business
  • Number of employees
  • Utility usage
  • City (there are 88 cities in the County of Los Angeles, each one with different tax structures)


The permit process varies depending on the type of business and city where business will be located. CalGOLD Business Permit Made Simple gives some indication of the types of business permits needed by business type and location.

Business Taxes

Business taxes includes business taxes and fees and payroll taxes affecting businesses that typically occupy office, retail, and industrial space, as well as charges for nonresidential and residential landlords. The amount or percentage of business taxes vary depending again on the type of business, size of business, number of employees, utility usage, and city where located (there are 88 cities in the County of Los Angeles).

Business taxes fall under one of these categories, depending on the city.

  • Fees
  • Gross Receipts
  • Employee
  • Payroll
  • Flat Rate/Other

There are eight (8) general business categories:

    1. General Office
    2. Professional Office
    3. Retail
    4. Wholesale
    5. Manufacturing
    6. Personal Service
    7. Commercial Property
    8. Residential Property

Utility User, Property, and Other Taxes (variations are by city)

  • Utility taxes for electric, telephone, cellular, gas, and water billings vary from 0% to 12.5%
  • Ad Valorem Property Tax rates vary from: 1.01% to 1.8%
  • Transient occupancy tax (surcharge on hotel room rates) vary from 0% to 14%
  • Parking tax rates vary from 0% to 10%
  • County Sales Tax 8.25%
  • Documentary (or real property) transfer tax per $1,000 of transaction value: $1.10 to $5.60
  • Development Impact/ Exaction Fees: Entitlement fees vary and may be assessed against certain development projects


For more information on specific business taxes by respective city, please contact the LAEDC’s Business Development Department at 213-236-4839 or see SCAG’s full list.

State of California Tax Chart For Los Angeles County – 2009

Type Measure Rate Administering Agency
Corp. Income & Franchise Tax Net income apportioned to California 9.98% Franchise Tax Board
Sales & Use Tax Receipts from sales or lease of taxable items 7.25 – 8.25% Board of Equalization
Unemployment Insurance Tax (UI) First $7,000 of wages per employee per year 1.5 – 6.2% Employment Development Department EDD
Workers’ Compensation Insurance Per $100 of Payroll Varies based on Job Classification, Workplace, Safety Record & Insurance Carrier Dept. of Industrial Relations
Personal Income Tax Taxable personal income 1 – 10.55% Franchise Tax Board
Property Tax 100% of assessed valuation Avg. 1.1% of taxable value County Government
State Disability Insurance SDI (employee paid) Taxable wage limit withholding is now at $90,669 1.10% Employment Development Department
Finished Good, Raw Material and Inventory Tax None None None