This is the Valley Industry & Commerce Association’s (VICA) monthly column for the Business Journal. VICA is a business advocacy group representing the San Fernando Valley and surrounding areas. Business taxes are an ongoing issue of contention between the City of Los Angeles and the business community. The city’s taxes on businesses are some of the highest in the country, and in the current economic environment reforming the city’s burdensome tax system is necessary to keep companies viable. As part of a comprehensive tax reform proposal, the Valley Industry and Commerce Association (VICA) recommended a new Business Tax Advisory Committee (BTAC) be formed. While VICA is pleased that the city is moving forward with this plan, there are concerns that, if not selected carefully, the panel could become ineffective. To ensure competent and qualified members of the community are selected for the committee, VICA joined with two other influential business groups (Los Angeles Area Chamber of Commerce and Central City Association of Los Angeles (CCA)) to develop criteria for selecting BTAC members. Without the proposed criteria, BTAC could fall victim to the same problems as the city’s many ineffective commissions that are filled with political appointees who have no actual experience in the matters they oversee. It is important for the economic health of the city that this committee is informed and empowered to make the right decisions. According to VICA, the L.A. Chamber and CCA, committee members must represent a range of business sizes and diverse industries that are crucial to the local economy. In a letter to the Mayor and city councilmembers, the coalition specifically mentioned the entertainment, green technology, travel and tourism, financial services, and goods movement industries as those that should be represented on the committee. Those that serve on the panel should also be key decision makers within their organizations and have a background in business finance and accounting. To assist the city in its search to fill the committee, the group of business organizations sent a second letter including a list (with resumes) of highly-qualified individuals ready and willing to serve on the panel. To date, city leaders have shown few signs that they are considering the business community’s advice regarding the composition of BTAC. It is feared that, despite the list of exceptional resumes submitted, the city may revert to its common practice of rewarding political favors with commission appointments. The stakes are too high for businesses and the community as a whole to leave this important task in the hands of unqualified individuals. The conclusions reached by BTAC will have major economic consequences and should create jobs and business opportunities across the city. Streamlining and reducing the city’s business tax is vital to economic recovery and long-term job creation. The members of BTAC must understand how businesses operate and the impact of business taxes, because they will be tasked with examining complex financial items with sweeping implications. In addition to recommending a new BTAC, VICA brought up several other important tax reforms that are worthy of careful consideration. The group proposed a reduction of gross receipts tax rates by 25 percent and dropping the city sales tax by one-half cent for one year. The sales tax reduction is easily done under the Bradley-Burns Agreement. In its tax reform proposals VICA looked for ways to help businesses who are struggling and aid recovery. The group found that extending the small business tax exemption for all businesses with less than $250,000 income through the end of fiscal year 2010 and increasing business tax exemptions for new businesses would help meet those goals. Eliminating all fees for applications submitted to city enterprise zone offices was another way the group hoped to speed recovery. All city committees and commissions should be filled with the most qualified and competent members and BTAC is no exception. VICA and other business groups are working to ensure this happens, and that the business community in the City of Los Angeles is given support to recover and room to thrive. Do you support VICA’s tax reform proposals? Who would you recommend for BTAC? Do you think the common practice of putting inexperienced political appointees on commissions is hurting the city? Email your responses or thoughts about the column to [email protected].