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Currently, a 50% tax credit based on sales tax generated in one year is available.
This credit may be used to offset up to 100% of the business license tax liability in any given year.
Utility User Tax Comparison
El Segundo boasts one of the region's lowest utility user tax rates; another of the many advantages to operating a business here.
The following chart illustrates comparable utility user taxes among notable ccommunities within 20 minutes of El Segundo.
| Burbank |
7% |
| Culver City |
11% |
| El Segundo |
3%
phone (2%) |
| Long Beach |
10% |
| Los Angeles |
10% |
| Redondo Beach |
4.75% |
| Santa Monica |
10% |
| Torrance |
6.5% |
Transient Occupancy Tax Rates
The Transient Occupancy Tax (TOT), or hotel bed tax, is remitted by hotel operators to the City of El Segundo as part of room payments.
El Segundo boasts a significantly lower TOT than a number of major cities.
Here are the comparisons:
| Burbank |
10% |
| Culver City |
12% |
| El Segundo |
8% |
| Beverly Hills |
14% |
| Long Beach |
12% |
| Los Angeles |
14% |
| Manhattan Beach |
10% |
| Santa Monica |
14% |
No Property or Parking Taxes
As a no/low property tax city, El Segundo does not and has never levied its own municipal property tax.
El Segundo's allocation from the County is 6.4% of $1.00 per $100.00 of assessed valuation.
The City has also never levied any parking taxes.
Business Taxes
El Segundo not only standardly features some of the lowest business taxes in the region, but also offers exceptional tax credit incentives that can reduce those fees even further.
The following are Business Taxes by category:
$88.00 base tax (includes first 10 employees and first 5,000 sq. ft.)
+ $109.00 per each additional employee over 10
+ $0.21 per each additional enclosed sq. ft. over 5,000
+ $9.00 per each additional location
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$88.00 base tax (If no vacant square footage available for rent or lease)
-- or --
$88.00 base tax (includes first 5,000 vacant sq. ft. available for rent or lease)
+ $0.09 per each additional enclosed vacant sq. ft. over 5,000 avail. for rent or lease
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El Segundo grants a 50% sales/use tax credit for those businesses that generate sales/use tax that is allocated to the City.
The amount of the credit given may not exceed 100% of the business tax liability.
In addition, a 50% penalty credit is granted for penalties paid by September 30th for the prior calendar year.
Therefore, a business that generates a high sales tax amount may not have any business taxes due because of these credits.
Any commercial landlord who has paid for vacant square footage may be entitled to a 100% refund of leased or rented square footage over the first 5,000 square feet.
When a new tenant pays its business license tax no later than June 30th of the calendar year, the commercial landlord is entitled to a 100% refund or is entitled to a 50% refund if paid no later than December 31st.
Competitive Taxes and Fees
Effective January 1, 1994, the City eliminated the indexing based on the consumer price index (CPI) of the business license tax.
Effective January 1, 1996, the City reduced the business license tax 10% and an additional 5% reduction in the remainder of the business license tax as an incentive to retain and attract businesses in the City.
In addition, the number of employees covered by the base tax was increased from 5 employees to 10 employees.
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