Council wises up on Internet

Internet companies are not the same as professional services companies, a distinction that seems obvious to most everyone except city of L.A. tax collectors. LegalZoom.com, Shopzilla.com and other Los Angeles-based Internet companies threatened to leave when their business tax category was reclassified to professional services. That's a hike of almost $5 per $1,000 of gross receipts - and for companies that the city is supposedly trying to retain. The council voted today to create a new, lower business tax category specifically for Internet companies. Of course, establishing a lower tax category will result in the loss of several million dollars in tax revenue. (Business Journal)