BUSINESS TAXES LOW IN SOUTHLAND, BUT HIGH IN L.A. : COST OF DOING BUSINESS.

Byline: Deborah Adamson Daily News Staff Writer

If you have a business in Southern California, chances are you're paying less in business license fees and local and utility taxes than folks up north.

Unless you operate in the city of Los Angeles.

That's because the nation's second-most populous city has the highest levels of fees and taxes of more than 200 California communities and a handful of cities in four other Western states, according to a survey released this week by Kosmont & Associates.

``It's a clarion call to the city of Los Angeles,'' said Jack Kyser, chief economist at the Economic Development Corp. in Los Angeles, a group that works to attract businesses to the area. ``They have to rethink the way they operate.''

In Los Angeles County, the highest business taxes are charged by Los Angeles, Beverly Hills, Santa Monica, El Segundo, Culver City and Inglewood.

For example, the yearly business license, utility and property taxes for a law firm in a 30,000-square-foot office comes to $116,650 in Los Angeles, while it's $120 in Lancaster and $8,520 in Calabasas.

By contrast, the city of Santa Clarita and the unincorporated parts of Riverside County don't charge any of these fees.

The top Southland communities in which to do business - for businesses who don't want to pay those fees, that is - are the City of Industry, Mission Viejo, Santa Clarita and Westlake Village.

While taxes are not the only consideration for choosing a business address, it's an important factor.

``Business fees and taxes are not always the primary issue when companies are evaluating a relocation,'' said Larry Kosmont, president of the Los Angeles real estate consulting firm that conducted the study.

Business officials also consider the availability of a skilled work force, proximity to the distribution supply and clients, transportation access and quality-of-life issues such as education and crime, he said.

But ``these taxes can be a tie-breaker when companies come down to selecting among two to three sites,'' Kosmont said.

The report also showed that smaller cities tend to charge smaller business license fees, while fast-growing cities in rural areas often offer great relocation and tax benefits.

The median business license tax in cities with fewer than 50,000 people is half of what's charged by cities over 100,000 in population.

In a double whammy, communities that charge high business license fees tend to charge high utility taxes as well.

But there are exceptions. Some urban areas are good deals, like Glendale.

In Northern California, the most expensive city is Berkeley, followed by Oakland and Fresno.

While taxes are generally higher up north, Southern California still charges much higher electricity taxes, the survey said.

In addition, out-of-state cities don't always have the best deals.

For example, Reno, Las Vegas and Phoenix are more expensive than many Northern California communities, Kosmont said.

The five best areas in Southern California with no business license and utility user taxes:

1. City of Industry

2. Mission Viejo

3. Santa Clarita

4. Westlake Village

5. Orange County unincorporated area

The five least-expensive areas in Southern California for professionals:

1. Burbank

2. Costa Mesa

3. Glendale

4. Huntington Beach

5. Irvine

The five least-expensive areas in Southern California for manufacturers:

1. Anaheim

2. Chula Vista

3. Fullerton

4. Long Beach

5. Oxnard

SOURCE: Kosmont & Associates

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