Committee approves wildfire business tax relief ordinance with tighter eligibility and April application deadline

Los Angeles City Council Budget and Finance Committee members voted to approve an ordinance to provide business tax relief for companies destroyed or severely disrupted by wildfires that began on Jan. 7, 2025.

The ordinance, approved as amended, directs the Office of Finance to implement rules and guidelines on eligibility, verification and an application process that will allow affected businesses to request relief through an April 14, 2025 deadline. The committee amended the originally drafted language that used “interrupted 60 continuous days” to instead cover businesses that have “experienced severe economic disruption,” and further shortened the qualifying threshold during committee discussion to a 45-day cumulative measure (as reflected in the committee amendment adopted at the meeting).

Charles Hong, assistant city attorney, said, “As submitted, the ordinance was, by motion from council was provide business tax relief for those businesses that were destroyed or interrupted 60 continuous days on account of the fires that began 01/07/2025.” He described the draft as modeled after relief adopted after the 1994 Northridge earthquake.

An Office of Finance representative told the committee that businesses destroyed by the fires would be relieved of business tax obligations for 2025 if approved, and that businesses that experience severe economic disruption may apply for relief and must provide proof for Finance to review. The representative said applicants would be “tagged” in Finance’s system so staff can follow up and notify taxpayers to re-register if they resume operations later in the year.

Office of Finance provided a geographic and revenue estimate for the area hardest hit by the fires: roughly 9,700 registered businesses in the three zip codes that most closely mirror the affected area paid a little more than $8 million in business tax last year. Staff said they cannot yet estimate how many additional businesses outside that geography will qualify under the “severe disruption” standard.

The committee discussed operational steps: the Office of Finance will prepare a one-page FAQ, targeted outreach through disaster recovery centers, mass email to registered businesses and web guidance. Staff advised applicants to also request the standard tax renewal extension when applying so Finance has an additional 45 days to process claims before penalties and auto-invoices take effect.

Council members pressed staff on the definition of “severe economic disruption,” and Finance said it will apply discretionary, evidence-based judgments and expects to refine objective guidance as applications arrive. Staff warned that processing workload could require overtime or temporary staffing depending on application volume.

The committee approved the ordinance as amended (final motion adopted by roll call; Yaroslavsky, Blumenfield, McCosker and Hernandez voting yes; Hutt absent). The committee also requested a report back on application results and implementation within 30 days of issuance of guidelines.

Why this matters: the ordinance pauses business-tax liability for eligible businesses for 2025 and creates an outreach and verification process meant to balance revenue protection with relief for firms damaged or economically disrupted by the fires. The committee emphasized that relief is not a blanket exemption and urged clear public communications so ineligible taxpayers do not mistakenly forgo required payments.

Ending: The committee directed the Office of Finance to draft implementation rules, produce public-facing FAQs and begin targeted outreach; Finance will provide a status update to the committee in the coming month.