LOS ANGELES, CA - Los Angeles County Assessor Jeff Prang’s proposal to modernize the County’s Low Value Ordinance by increasing the threshold at which business personal property is subject to taxation from $5,000 to $10,000 has been approved.
The Los Angeles County Board of Supervisors adopted the ordinance during its Tuesday’s meeting and the change will now take effect the next assessment cycle.
The Low Value Ordinance establishes the minimum value at which small businesses are required to report and pay property taxes on items such as machinery, equipment, fixtures, and furniture. The current $5,000 threshold has remained unchanged for years, despite rising administrative costs and evolving economic conditions.
“Small businesses are the backbone of our local economy,” said Assessor Prang. “This proposal reduces unnecessary burdens on entrepreneurs while allowing our office to focus resources where they generate the greatest return for taxpayers.”
A recent internal study conducted by the Assessor’s Office found that it costs approximately $174 in staff time and administrative resources to process and assess a $5,000 business property account. By comparison, that assessment generates only about $50 in annual property tax revenue. This imbalance results in a net loss to the County and diverts resources away from higher-value assessments that more significantly support public services.
The study also estimates that approximately 43,000 small businesses across Los Angeles County would benefit from raising the threshold to $10,000, reducing compliance requirements and easing administrative burdens for a significant segment of the local business community.
“This is a common-sense reform,” Prang added. “We should not be asking small businesses to shoulder paperwork and tax obligations that cost more to administer than they return in public benefit.”
By raising the threshold, the Assessor’s Office would eliminate a category of assessments that cost more to administer than they produce in revenue, allowing staff to focus on higher-value properties that more effectively support essential public services.
The proposed update aligns with state law, which permits counties to set the Low Value Ordinance threshold up to $10,000.
In addition to easing the burden on small businesses, the proposal is expected to allow the Assessor’s Office to redirect staff and resources toward higher-value property assessments, improving overall efficiency and helping to strengthen the County’s property tax base.
The Assessor’s Office has shared its analysis with the Treasurer and Tax Collector and the Auditor-Controller to review and comment as part of the standard policy development process.