Location for LLC

[Thomas Richter]

Does anyone have a LLC (for rentals) in Los Angeles City? I assume you are required to pay City Business Tax?

My rentals are not in Los Angeles and I'm wondering if it makes sense to locate LLC outside of L.A.

Thoughts?

[Thomas Richter]

Mark,

I wish that were an option, but since the properties are in CA it won't matter in which State I incorporate. The LLC would essentially be treated like one started in CA, except there is even more paperwork because it's a foreign entity. As long as you have nexus in a State you have to file there, no matter where you incorporate. For us it's cheaper to only inc in CA and be treated as a SMLLC - even with the gross receipts fee (which is acceptable, cuz it's not a %).

I'm trying to avoid paying City Business Tax based on gross receipts, which is a % in Los Angeles. Burbank i.e. has a flat fee plus a formula based on the number of employees you have. That looks much nicer. L.A. does have a new business exemption so for the first three years there's no tax...

Thanks

Thomas