The dozen or so fund firms based in Los Angeles now have something more than sunny weather to celebrate: the are now exempt from the city's business tax.
The Los Angeles City Council voted 13-0 Wednesday to exempt mutual fund firms from the local levy. The tax break will be phased in over three years, reports the Los Angeles Times. The paper added that the cut will cost the city $7.5 million (and presumably save mutual fund firms the same amount).
Los Angeles is currently the only city in California to tax mutual funds. The current tax rate is $5.07 for every $1,000 in revenue.
That hit "creates a disincentive for mutual funds to locate in Los Angeles, and could force funds and fund managers currently located here to move to an adjacent jurisdiction," the city's chief legislative analyst wrote in a report.
Of the more than 700 mutual fund advisors, only 15 are based in Los Angeles. Those with more than $1 billion in assets are Capital Group's American Funds, Transamerica, DoubleLine, TCW, First Pacific Advisors (FPA Funds), Payden & Rygel, Hotchkiss & Wiley, and Causeway Capital.
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