I am a masters student living in LA and recd 1099 fr a small business I worked as a software developer a couple of years ago, and recd less than $5000 for the same. I filed all my taxes and all, bt recently recd a City of Los Angeles business tax application [tax enforcement (AB63 )notice] (final) mentioning that I don't have a business tax registration certificate and I need to pay whtever I owe to the City of LA's finance office and need to get a registration for my business. I am a little worried as I am on F1 and this might be a concern on the long run, if anyone know what to do, please let me know...

Thanks in advance

R

Call this LA tax office. What you did was consulting work, not a true business with a storefront. Once you explain that, they should back off.

Let us know what happens.

Thanks AtlantaTaxExpert,

I called up the LA tax office and they mentioned that if any person working on a 1099 for more than 7 business days within LA limits, need to file for a business certificate. Doesn't matter if its store front or a consultant. It has registration fee of approx $100 and needs to be renewed every year. Now since I'll be working as a contractor in 2008 (for approx 6months), I still need to renew for 2008 after I pay my dues and get that certificate... again, would the INS know about this when I file for my H1 in April 2009?

Much appreciated..

Raj

Raj:

I got the same argument from my county tax office about my tax consulting business. I bought the business license for ONE year, then moved, and have not bought another business license since. It's been ten years and I have heard a peep.

As for the INS, no, the LA tax office has NO WAY of knowing what your visa is, so they have no reason to notify the INS unless you tell them too much.

Since they know you exists and have a name, address and phone number on you, you need to pay the past due amount and drive on from there.

Getting business license is not a tough job. It will take only around 10 minutes. Go to the city office. They will give you a form, and take your credit card.

Thank you for the prompt replies, I am taking an appointment on Wednesday and will let everyone know more about it...
Thanks again

Regards


Raj

Glad to help!

So, fully clarified, this is what happened. The LA (or any other city) do a scan for people who filled out schedule C every year and cross check whether they have a tax registration. It doesn't matter what you make, and also, the city tax is different than state and fed tax.

The business tax registration needs to be renewed every year before feb 30th and anything later would be penalized (but penalty can be waived off by providing a valid reason) (in my case, it was waived since I never got a notice until now, for year 2006). Now after renewing, I can work on a 1099 as a consultant for the entire year and need to report my earnings at the end of the year. I don't know what percentage or tax bracket they have (I think it depends on each city)

After filling out an application, they give a registration copy and mail the original document in 6weeks. Now, this is legal under circumstances like CPT/OPT ( hardship? ), and is totally a tax issue, not immigration. If anyone on CPT is on a 1099 and while asked during H1, make sure you have copies of the work permit given by the international offices as a proof of approval, and also all tax documents, herein..

Rest assured...

Thanks again :)

Raj

Yes, it is legal. Most states and cities do NOT recognize your non-resident alien status. You live and work in their jurisdiction, you pay their taxes, PERIOD!