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Mayor Villaraigosa Signs Ordinance to Return New Car Sales to L.A.

The new ordinance exempts auto dealers from the city's business tax and could be a boon to Downtown L.A.'s "Auto Row" and local workers. It is retroactive to January 1.

Mayor Antonio Villaraigosa and other officials headed to Downtown L.A.'s "Auto Row" Monday morning to sign off on a new ordinance.

At a new KIA dealership just off Figueroa Boulevard near USC, the mayor made final a new exemption from the city's gross receipts tax for new auto dealerships opening in Los Angeles,

The Mayor and others hope it will bring such retailers--and sales tax revenues and jobs--back to the city.

Many had fled to smaller communities like Glendale and Beverly Hills to avoid the tax.

According to the mayor's office, Los Angeles has lost 95 deaderships in the last 25 years.

The KIA dealership is the second to open in Downtown L.A. in the last 18 months.

Beverly Hills BMW and Beverly Hills Porsche have also recently returned to Los Angeles.

The mayor's office says KIA will add about $400,000 in sales tax per year to the City’s general fund--as much as six times what would be lost in gross receipts taxation.

KIA currently employs 50 people and is expected to hire another 15 for its expanding business.

Villaraigosa worked with council members Eric Garcetti and Mitch Englander to move the ordinance through the approval process.

The ordinance will be retroactive to the start of this year and will expire at the end of the 2020 tax year.

By that time, the gross receipts tax for all companies in the city may be eliminated, if the City Council approves a plan this fall for a phased scrapping of the tax.

Brett S July 09, 2012 at 09:34 PM
Only an 8 year temporary fix ? STUPID ! WHO is going to spend MILLIONS on building and or opening a dealership only to get slapped with MORE taxes in 8 years ? Los Angeles City Council will NEVER get it. The more you tax business, the more businesses LEAVE the City. Not ONE Councilperson has EVER owned a business. L.A. is BEYOND business-UNFRIENDLY. TRUST me, I know, I own one here, the Council does NOTHING to encourage business, they only demonize us.
Julie Walmsley September 16, 2012 at 02:47 AM
How did Villaraigosa work with CC to advance the ordinance? It was born of a motion co-presented by Englander and Garcetti and seconded by Koretz. The stats are not from the Mayor's (or any of his staffers') research. The 95 dealers lost and the rest of the background were prepped by council staff for submission in the text of the motion. I don't like to be critical of another reporter (especially another Patcher), but I think this gives the Mayor too much credit. It wasn't his idea and all ordinances require a certain process. And if he does have the power/initiative to advance an ordinance, why doesn't he take up one of the many other ordinances of vital public interest which have been years in the making?
Julie Walmsley September 16, 2012 at 02:50 AM
Can you share some examples of pending business-unfriendly legislation, existing laws, or de facto policy which are damaging to the private sector? I'm a reporter and I'd be interested to write on this topic if you could point me in the right direction.

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