The Good News: Low Income Free Lancers Don't have to Pay Business Tax; The Bad News: You Have to Apply for the Exemption Every Year or You Do

"But people exempted from the freelancer tax are getting nicked anyway, some for thousands of dollars. This is thanks to a 'penalty fee,' exacted by L.A. Mayor Eric Garcetti's administration under Section 21.03 of the L.A. Municipal Code. The penalty is exacted if a freelancer fails to respond to a mailed 'Tax Discovery Program' notice requiring them to exempt themselves — from a tax they have never heard of and don't owe."