Nonprofit
How Nonprofits Can Stay Aligned and Adapt as Conditions Change
Stronger alignment and shorter planning cycles help organizations stay focused on what matters most while adjusting more effectively to changing conditions.
While most taxpayers are focused on federal and state tax obligations, city taxes can often slip under the radar, leading to potential oversights. AAFCPAs would like to make clients aware that two California city taxes affecting businesses in Los Angeles and San Francisco are due February 29, 2024.
Los Angeles City Tax
This is a gross receipts-based tax levied on companies that are engaged in business in the city of Los Angeles. “Engaged in business” is defined as: having physical presence in the city including remote employees, regularly soliciting business in the city, performing work/providing services for seven or more days or having four or more transactions. Tax rates range from 0.1 to 6.0 percent depending on the activity. The annual return for the 2023 tax year is due February 29, 2024. While taxpayers may request a 45-day extension, 90 percent of their tax due must be paid with the extension to avoid late filing penalties.
San Francisco City Tax
This is also a gross receipts-based tax levied on companies doing business in San Francisco. “Doing business” is defined as: maintaining a fixed place of business within the city, performing any work (including remote work and solicitation) within the city for seven days during the calendar year, or generating more than $500,000 in San Francisco-sourced gross receipts during the calendar year. Tax rates range from 0.053 to 0.975 percent depending on the taxpayer’s NAICS business classification. The annual return for the 2023 tax year is due February 29, 2024. While taxpayers may request an extension to file their return as far out as April 30, the tax must be paid on the due date.
AAFCPAs works with clients to simplify tax compliance for businesses faced with multistate tax obligations. This includes assistance with administration and compliance along with nexus analyses, sales and use tax registration, Canadian Provincial Sales Tax (PST) and Goods and Services Tax (GST) registration and compliance, voluntary disclosures, and multistate income tax return filings for corporate, partnerships, individuals, and trusts.
If you have questions, please contact Kelly Zack, MST, Director, State & Local Tax at 774.512.4001 or kzack@aafcpa.com—or your AAFCPAs Partner.
