Anyone having to get a business license for renting out a room in their LA home? Also, would this then trigger inspections by the city on the basis of being a rooming house or apartment rental business?
I would also like to know this if any LA hosts can weigh in
Spoke with business and commercial affairs as well as directly to a residential code inspector. Something to keep in mind, this was specifically for renting a room in a house where the owner resides and stays there while renting that room.
Business and commercial affairs said a person could rent out a room in a private house, and revenue earned would be considered a business and as such would have to get a business license. Potentially this would fall under the threshold of gross revenue needed to mandate tax (ie. you might not have to pay tax). There might also be a Transient Occupancy Tax, but the 2 people I spoke with at that office weren’t certain and were waiting for greater clarity from city legislation and action.
The residential code inspector said that he would only come out if there was a complaint from a neighbor. If he did come out, a $438 fine would be levied for operating a non-permitted hotel. Again, he also noted this was a gray area, but as far as he was concerned, it was not allowed. And he’s the guy who would knock on your door.
It also bears mention that if you have earned income that generates a 1099 from a short term rental site (generated when 20K and 200 plus transactions are made), that information is automatically received by the city of LA, which would potentially generate the necessity of a business license, which in turn could notify the city Building and Safety Residential code desk that you were operating a hotel, which would stop you from renting (and red flag your home for future transactions).
Needless to say, I wasn’t happy with what I had found. Most of all because of the conflict of allowability between the Business and Code desks.
If anyone has any other information, I’d love to hear.
I’ve had a rental house on my property for years, that we converted to airbnb status. The big change was that it is now furnished and available for short term rentals at higher prices. As such we have had it listed, and paid taxes, with he LA Housing Department for years. That tax is nominal. I just renewed for 2016, and could not find anything on the renewal form that referred to hotel tax or that made a distinction between hose rentals and shorter rentals, or hotels.
I would like advice on where I would look for this status or how I would sit it, and who collects hotel tax.
Any help out there?
I have units in LA. I don’t have a business license, but I am incorporated as a LLC. I would love to receive more information about this and make sure I’m doing everything legally.
i’ve been down to city hall in DTLA and asked them what i need in order to operate with AirBnB, first they looked at me blank…had no idea what AirBnB was… so i told her i was renting a space to guests. She said i needed to pay transient occupancy tax and that was all. So i’m paying transient occupancy tax when guests stay less than 30 days. I too am not sure if this makes me legal. Does anyone have a contact in order to clear this up ?
when you say you pay taxes with the LA housing Dept…what does this mean ? Who do you pay the tax to ? A certain dept ? Thanks.
What is a 1099 ? And where would one obtain a business licence ? I’ve tried searching but all i can come up with is an L.A county business licence. City Hall told me all i have to pay is transient occupancy tax. Thanks
The city of LA is still in the process of figuring out what they want to do - either fully allow, fully disallow or somehow partially permit short term rental of a home (or part thereof). If you earn money through a business in LA, the business affairs dept will tell you that a business license is needed. I spoke to the Residential Code Supervisor in building and safety and from their perspective it is currently considered a hotel operation and not allowed. If a neighbor calls to complain, they’d be obliged to fine you something like 430 dollars. So, there is a disconnect between various departments. A 1099 is what a payroll service will send out to show ‘other income’. That info is shared with state and city levels of government so (as an LA times article pointed out happened to one guy) that could trigger building and safety to be aware of your rental. Does anyone else have varying information with regard to revenue info triggering a code inspection?
Thanks… so do you currently have a business license ? Or are you still researching ? I’m wondering whether to just give up AirBnB and just craigslist it longer term. And googling L.A city business affairs dept…only brings up the county again:
I think an ordinance is set to be released soon and we’ll be able to know better what is/isn’t allowed and what fees and taxes we may have to pay.
It may be a while. I went to one of the city of LA ‘information gathering meetings’ a few months back - which was just a venue for the city to get input from various residents. The room was packed, hot and tempers were high - on one side were homeowners and renters, on the other - hotel workers. The city has yet to hold public, council information gathering sessions which will form part of the legislative basis for whatever they might do. The wheels of bureaucracy tend not to spin too fast. That said, leave a note here if you here of anything specific.
Well there are artist exemptions for the business license necessity (Section ii.2 http://finance.lacity.org/form/Form%201000A.pdf)
(I know as I am one and have gotten that exemption). But the issue is less on the business affairs end of the city and more to do with Building and Safety’s Residential Code office. Business affairs will tax and allow it, but LADBS still considers short term rental a hotel service.
That’s what I’m waiting for and to see what the city does.
Oh PS. Artists area that area exempted are (from the city doc) " An individual who may be eligible for this exemption is: actor/announcer; art director ,costume designer, production designer, scenery/set designer; choreographer; cinematographer; musical conductor; director; motion picture editor, sound dubbing, special effects, or titling artist; creative writing; music/lyrics arranger,composer or writer; author; cartoon artist; lithographer/painter/sculptor of visual fine arts; drawing, graphic, illustration or sketch artist; performing artist; and photographer (if primarily artistic and not journalistic or commercial). I believe it’s up to a max of 300K revenue generated in any of these fields
Sounds good. Anyways, we’re still waiting on an Airbnb thing from the city. Hopefully soon!
A 1099 is a Income Tax Reporting Form used for income from which no deductions were taken. FOR instance, if you invoiced for your work you would receive a 1099 form to turn into the iIRS with yournTax return. IF you had deductions taken out you would get a W-4 form.