
What's the limit for a business to be exempted from paying tax legally
The small business exemption threshold was adjusted on July 1, 2005 it increased from $5,000 to $50,000 and it increased from $50,000 to $10,000 on July 1, 2006. In order for your business to qualify you must have registered it and that a timely renewal of statement is required. And you must remember that small business exemption only applies for renewing businesses. So in order for you to fill for a legal business tax exemption you must still submit and report all businesses requirements and forms.
http://finance.lacity.org/finA5e.htm

