Dem Mayor Wants to Drop Tax on Auto Dealers So They'll Move to L.A.

November 11, 2011 - 4:25 PM
LA Car Dealers

This Nov. 10, 2011 photo shows the the Jaguar Galpin Motors car dealership in Los Angeles. Los Angeles Mayor Antonio Villaraigosa wants to lure new car dealers to Los Angeles by eliminating city business taxes for auto dealers. (AP Photo/Damian Dovarganes)

LOS ANGELES (AP) — Mayor Antonio Villaraigosa wants to lure new car dealers to Los Angeles by eliminating city business taxes for auto dealers.

The mayor's business-friendly proposal is designed to reverse the decades-long flight of new car dealerships to other cities.

Villaraigosa unveiled the plan this week at a news conference to announce relocation of Beverly Hills Porsche to Los Angeles. It will be the second dealership in 25 years to open in the city.

City News Service says that during the same quarter-century, 95 car dealers left Los Angeles for cities like Glendale, Burbank and Pasadena that have very low business taxes or none at all.

The mayor says the gross receipts tax is self-defeating because it produces only limited revenue while scaring away auto dealers that would otherwise generate substantial sales tax revenue.