Legal Question in Business Law in California
According to the City of Los Angeles Office of Finance, you are considered to be engaged in business in the City of Los Angeles when you physically perform work within the City of Los Angeles for seven (7) or more days per year. If you have a sole proprietorship and only got paid twice in a year consulting (2 days) does the mean you don't have to register and pay the city tax? Or are you considered "being engaged in business" even on days that you don't get paid but are working on the business?
3 Answers from Attorneys
In my opinion, your obligation to get a business license depends upon the number of days you work, not your billing and collection cycle. As you yourself recognize, the law says something about "physically perform work" (although this doesn't sound like the language of an ordinance, it's probably pretty accurate as to how the City would interpret it). In my opinion, you must register.
Bryan is right in my humble, but extremely intelligent opinion.
Being so called �engaged in business� refers to the actual work or the performance of work or operation of business, regardless of the manner and/or dates of payment or compensation. Even if you are paid only twice a year, if you have rendered actual work amounting to seven (7) days or more, as mandated by law, then you are obligated to register and pay taxes.
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