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I created a legal entity (such as a family partnership, investment partnership) as an administrative convenience and file as a business entity with the IRS and Franchise because they require it. Since this entity does no "business", is it required to pay business tax?

Yes. Any entity that holds itself out as a trade or a business in the City needs to register for and pay business tax. City code does not permit us to consider the reason for the formation of a business entity in applying the business tax requirement. Additionally, state law directs all cities to use the manner in which a taxpayer reported income to determine whether that taxpayer acted as a business.