SERVING LOS ANGELES COUNTY REMOTELY · SINCE 2005
Los Angeles, CA Bookkeeping Services — Gross Receipts, Not Profit
Last Updated: October 6, 2026Los Angeles taxes revenue, not profit — twice over. The city levies a Business Tax on gross receipts, with rates set by what you do rather than what you earn, and the state layers its own gross-receipts LLC fee on top. Neither one cares whether you made money. A production company, agency or e-commerce brand can post a loss and still owe the city, the state, or both. On top of that sits a county sales-tax rate near 9.5% before city districts, and a payroll environment with one of the highest local minimum wages in the country. None of that is hard to handle — but all of it depends on revenue being coded correctly, every month, rather than reconstructed in spring.
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LA owners and their CPAs come to us because two separate gross-receipts regimes mean your revenue classification drives your tax bill directly, and classification is a bookkeeping job. Dedicated bookkeepers, monthly reconciliations, and tax-ready financials — plans from $75/month, extra hours at $15/hour, and wholesale $10/hour rates for CPA firms — backed by a 100% money-back guarantee on your 1st retainer, refundable on the unused balance.
On This Page
- Running the numbers in Los Angeles
- Los Angeles tax cheat sheet
- The city taxes gross receipts — so revenue coding is the tax return
- Two gross-receipts regimes, stacked
- Payroll and contractors in LA
- What we handle for Los Angeles businesses
- Los Angeles FAQs
Running the Numbers in Los Angeles
Los Angeles County is the largest local economy in the United States by employment, and its business mix is unusually weighted toward exactly the structures that make bookkeeping fiddly: entertainment production companies spinning up and winding down per project, creative agencies billing in retainers and pass-through costs, international trade flowing through the ports of Los Angeles and Long Beach, and a very large base of sole proprietors and single-member LLCs.
Three patterns show up again and again in LA books. Pass-through costs booked as revenue — an agency that runs media spend through its own accounts can inflate gross receipts enormously, and in a city that taxes gross receipts that is not a cosmetic error. Project-based entities that are formed, used and abandoned without being formally cancelled, quietly accruing California’s $800 minimum each year. And contractor-heavy payrolls, where classification matters more than most owners expect.
Los Angeles Tax Cheat Sheet
| Item | Rate / Fee | Deadline |
|---|---|---|
| LA City Business Tax | Charged on gross receipts, at a rate set by your business classification — not on profit | Annual renewal, due at the start of the year; registration required when you begin operating in the city |
| California annual franchise tax | $800 minimum per LLC or corporation, owed regardless of income | 15th day of the 4th month — April 15 for calendar-year filers |
| California LLC gross-receipts fee | $900 from $250,000 · $2,500 from $500,000 · $6,000 from $1,000,000 · $11,790 from $5,000,000 | Estimated by the 15th day of the 6th month (Form 3536) |
| Sales and use tax | 7.25% statewide base plus county and district taxes — most of LA County sits near 9.5%, and some cities higher | Monthly, quarterly or annually, by CDTFA assignment |
| Statement of Information | Secretary of State filing — biennial for LLCs, annual for corporations | Six-month window keyed to your formation month |
City of Los Angeles Office of Finance and California Franchise Tax Board, checked 3 October 2026. Business Tax rates vary by classification and city rates and exemptions change — confirm your classification and current rate with the Office of Finance or your CPA.
The City Taxes Gross Receipts — So Revenue Coding Is the Tax Return
Los Angeles charges its Business Tax on gross receipts, with the rate determined by your classification. Two businesses with identical revenue can owe materially different amounts because one is classified as a professional service and the other as a retailer or a creative firm. And because the base is receipts rather than profit, the number that matters is the one at the top of your profit and loss, not the bottom.
That makes two bookkeeping decisions unusually consequential in LA. What counts as your revenue — an agency passing through $2m of client media spend through its own bank account has a very different gross-receipts figure depending on whether that spend is booked as revenue and cost, or as a balance-sheet pass-through. And which classification your activity falls under, which depends on describing what the business actually does.
We are bookkeepers, not tax advisers, and we do not pick your classification for you. What we do is keep revenue recorded cleanly and consistently so that you and your CPA are deciding from accurate numbers, and so the figure on the renewal is one you can defend.
Two Gross-Receipts Regimes, Stacked
An LA business can face the city’s gross-receipts Business Tax and California’s LLC gross-receipts fee in the same year, measured on overlapping but not identical bases, on different deadlines, filed with different agencies.
The practical effect is that a profitable-looking year and an expensive year are not the same thing. A business doing $600,000 in receipts owes California $800 plus a $2,500 fee before the city is considered, and owes it whether the year ended in profit or loss.
This is where monthly bookkeeping earns its fee. If revenue is reconciled every month, the June LLC-fee estimate and the city renewal are both straightforward. If the books are reconstructed in March, both become guesses — and one of them carries penalties.
Payroll and Contractors in LA
Los Angeles carries one of the higher local minimum wages in the country, with separate rates applying to certain sectors and locations within the county, plus city and state paid-sick-leave rules. For bookkeeping, the consequence is that payroll cost cannot be assumed from a headcount — it has to be recorded from what actually ran.
The bigger issue in LA is the sheer density of contractor relationships, particularly in production and creative work. Worker classification is a legal question we do not answer, but the bookkeeping side is ours: 1099 payees tracked correctly through the year, so that January filing is a report rather than a scramble, and so that payments are not sitting miscoded in an expense account nobody reviews.
Our payroll processing is $50 per run plus $10 per employee, and 1099 filing is $50 plus $30 per form.
What We Handle for Los Angeles Businesses
- Monthly reconciliation of every bank, card and merchant account — including Stripe, Square and PayPal settlement, with fees separated from gross
- Revenue coded gross and classified consistently, so city Business Tax and the California LLC fee are both calculated from real figures
- Sales tax captured per transaction with the district component preserved, then reconciled to what was remitted
- Contractor payments tracked through the year for clean 1099 filing
- Catch-up bookkeeping at $75 per month behind, with no limit on how far back we go
- Monthly financial statements your CPA can file from without rework
Los Angeles Bookkeeping FAQs
What is the LA City Business Tax based on?
Gross receipts, at a rate set by your business classification rather than by your profit. That means a loss-making year can still produce a bill, and it means how your revenue is recorded — particularly whether client pass-through costs run through your revenue line — directly affects what you owe. Confirm your classification and current rate with the City of Los Angeles Office of Finance or your CPA.
What sales tax rate do I charge in Los Angeles?
California’s base is 7.25%, and Los Angeles County sits around 9.5% once county and district taxes are added, with some cities within the county higher still. Because district taxes vary by address, the correct rate for a delivery depends on where it goes. That is why we capture sales tax per transaction rather than calculating it from a revenue total at quarter end.
Do I owe the $800 California franchise tax on a small LA business?
If you operate through an LLC or corporation, generally yes — it applies regardless of income and keeps accruing until the entity is formally cancelled. Sole proprietors without a registered entity do not pay it. Narrow exemptions exist; check your position with the Franchise Tax Board or your CPA.
We run a production company with project entities. Can you handle multiple LLCs?
Yes. Our wholesale plan is $300/month for 30 hours covering unlimited entities, then $10 an hour, which is usually the right structure when several project entities need keeping straight. It also means dormant entities stay visible rather than quietly accruing the $800 minimum for years.
Do you have a Los Angeles office?
No. We are a fully virtual bookkeeping company — founded in Vienna, Virginia on May 25, 2005 and headquartered in San Juan, Puerto Rico today, US-registered with delivery centers in India, which we disclose on our About page. We are not going to imply a Los Angeles storefront we do not have. What we do have is Los Angeles clients served remotely since 2005, a dedicated bookkeeper on plans from $75/month, and a 100% money-back guarantee on your 1st retainer, refundable on the unused balance.
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Dedicated Los Angeles bookkeeping from $75/month — with a 100% money-back guarantee on your 1st retainer, refundable on the unused balance.