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City Business Gross Receipts Tax / Virtually All Businesses Operating in the City / Ordinance Initiative Petition / Certification of Sufficiency

Council File 26-1100-S7

Introduced
2026-03-25
Last changed
2026-05-21
Status
open
Expires
2028-05-21
Initiated by
City Clerk
References
City Attorney Report: R26-0188; R26-0289City Administrative Officer Report: 0220-06397-0000

Brief

On March 25, 2026, the City Clerk received an ordinance initiative petition proposing to tax gross receipts from nearly all businesses operating in Los Angeles. After review by the City Attorney and City Administrative Officer, Council voted 15-0 on April 15 to certify the petition as sufficient, and again 15-0 on May 13 to adopt related motions by Harris-Dawson and others. The file was transmitted to the Mayor on May 15. The initiative petition process is now substantially complete pending mayoral action.

Full summary

This file tracks a citizen-sponsored initiative petition seeking to repeal the City of Los Angeles Gross Receipts Tax on virtually all businesses except cannabis operations. If enacted, the measure would eliminate what the City Administrative Officer estimated as approximately $860 million in annual tax revenue. Initiative petitions of this kind require the City Clerk to certify that enough valid signatures were gathered, after which Council must either adopt the measure outright, refer it to voters, or take no action and let it qualify for the ballot independently. After the petition was certified as sufficient in late March 2026, the City Attorney submitted legal analysis and the City Administrative Officer prepared a fiscal impact report. On April 15, Councilmember Marqueece Harris-Dawson moved to refer the measure to the CAO for a fuller report on fiscal and other impacts, with the understanding that Council would take a final ballot-placement vote within 30 days. That motion, seconded by Katy Yaroslavsky, was adopted by Council. On May 13, Council voted 15-0 to adopt Motion 19A, presented by Harris-Dawson and seconded by Bob Blumenfield, directing that an election ordinance and ballot resolution be adopted to place the initiative on the November 3, 2026 General Municipal Election ballot without alteration. The same motion amended the ballot question language to specify the estimated annual revenue decrease as 'approximately $860M.' A companion motion by Harris-Dawson and Tim McOsker adopted a revised ordinance to implement that language change. The situation shifted sharply on May 21, 2026, when the initiative's proponents filed a withdrawal request with the City Clerk. Their stated reason was a negotiated arrangement: the withdrawal is contingent on the City Council's final adoption of the ordinance revising wage and health benefit provisions for airport employees and hotel workers in Los Angeles (Council File 25-0466). Under the City Charter and City Election Code Section 711(d), a ballot initiative can only be withdrawn with both proponent consent and City Council approval, and the deadline to do so is August 7, 2026, which is 88 days before the election. The City Clerk transmitted a resolution to Council on May 21 recommending approval of the withdrawal and directing the City Attorney to prepare an ordinance repealing the May 13 election-calling ordinance. The file remains open and is now awaiting Council action on that withdrawal resolution. If Council approves and the wage ordinance is finalized, the business tax repeal measure will not appear on the November ballot.

Activity (18)

  • 2026-05-21 City Clerk document(s) referred to Council.
  • 2026-05-21 Document submitted by City Clerk, dated May 21, 2026.
  • 2026-05-15 City Clerk transmitted file to Mayor. Last day for Mayor to act is May 26, 2026.
  • 2026-05-13 Council adopted Motion 19A (Harris-Dawson - Blumenfield) and Motion (Harris-Dawson - McOsker), subject to reconsideration, pursuant to Council Rule 51.
  • 2026-05-13 City Attorney document(s) referred to Council.
  • 2026-05-13 Document submitted by City Attorney, dated May 13, 2026.
  • 2026-05-08 City Clerk scheduled item for Council on May 13, 2026.
  • 2026-05-07 City Administrative Officer document(s) referred to Council.
  • 2026-05-06 Document submitted by City Administrative Officer, dated May 6, 2026.
  • 2026-04-20 Council action final.
  • 2026-04-15 Council adopted item, subject to reconsideration, pursuant to Council Rule 51.
  • 2026-04-10 City Clerk scheduled item for Council on April 15, 2026.
  • 2026-04-10 Rules, Elections and Intergovernmental Relations Committee waived consideration of item .
  • 2026-04-09 City Attorney document(s) referred to Rules, Elections and Intergovernmental Relations Committee.
  • 2026-04-09 Document submitted by City Attorney, dated April 9, 2026.
  • 2026-03-27 Rules, Elections and Intergovernmental Relations Committee waived consideration of item .
  • 2026-03-27 City Clerk document(s) referred to Rules, Elections and Intergovernmental Relations Committee.
  • 2026-03-26 Document submitted by City Clerk, dated March 26, 2026.

Documents (19)

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