BUSINESS TAX REFORM IDEAS LISTED.

Byline: Rick Orlov Staff Writer

A new effort to streamline the convoluted Los Angeles business tax system was released Monday with an emphasis on getting more companies to pay their share.

The Business Tax Advisory Committee, composed of business leaders and city officials, released its 18 recommendations, including another tax amnesty program.

``When you see the thriving business communities in Glendale, El Segundo or Alhambra, that's all the result of our screwy tax system,'' said Jack Walker, an attorney and vice chairman of the BTAC. ``What we're talking about when we talk about tax relief is jobs.''

Deputy Mayor Rocky Delagadillo, who co-chaired the panel with Councilman Mike Feuer, said the reforms are long overdue ``if Los Angeles is to continue to be a city where dreamers can succeed.''

Feuer said the changes are needed to capitalize on the city's assets and keep businesses in the city.

``Everywhere I speak to business groups, the one thing I hear about is our business tax structure,'' Feuer said.

Added Cathy Maguire, chairwoman of the Valley Industry and Commerce Association: ``What we were looking for was simplicity and fairness and we think this takes us on the road to that. This is an issue that affects all business in the city, but we think it will have particular benefit for the Valley.''

Wilson said the main recommendations of the package are aimed at getting more businesses to pay their taxes. Officials estimate that one-third of Los Angeles-based businesses are not paying taxes, placing an unfair burden on those who comply, he said.

The panel favors reintroduction of legislation to require the state Franchise Tax Board to provide information to Los Angeles about businesses within the city that file taxes with the state.

With that information, the city can compare its list of tax-paying businesses vs. the state's list. City officials estimate nearly one-third of businesses within the city don't pay taxes because of the size of the state's list.

A similar proposal in the Legislature was defeated last year.

Wilson said the legislation would include provisions that 75 percent of any new revenue collected would go for business tax relief to ease the concerns of conservative legislators.

Reforms are long overdue, said Larry Kosmont, an economic analyst who conducts annual surveys comparing the cost of doing business.

``Los Angeles has to bring its fees more in line with neighboring cities,'' Kosmont said. ``Secondly, business taxpayers should not be paying a penalty because compliance is so poor.''

Other changes are needed, involving the utility users tax and processing of permits, he said.

Jack Kyser, chief economist at the Los Angeles Economic Development Corp., voiced doubt about finding business tax scofflaws.

``What we have found is that even the state doesn't have a good idea of all the business out there,'' Kyser said. ``There is a tremendous underground economy going on in this city.''

AT A GLANCE

Here are some of the major recommendations by the Business Tax Advisory Committee on needed changes in the Los Angeles business tax system:

--Increase funding for the tax and permit system to make the city more business friendly and to identify businesses not paying their taxes.

--Develop a Web-based filing and compliance system to allow businesses to file taxes electronically and allow use of credit cards for payments.

--Seek legislation allowing the Franchise Tax Board to provide information to the city. Assemblyman Gil Cedillo, D-Los Angeles, has said he will introduce the measure.

--Develop direct-pay tax systems.

--Create a tax amnesty program for 2001 to bring in an estimated $20 million.

--Create a one-category tax filing system for businesses.

--Fill an ombudsman office to help taxpayers.

--Allow firms to have intercompany transfers or pass-throughs without having to pay a tax.

--Examine tax rates to correspond to the present economic situation.

--Examine the city's tax appeal system to make it more fair to businesses.

--Establish a settlement bureau to work outside the appeals system to resolve complaints.

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Box: AT A GLANCE (See text)