The City of San Jose welcomes your business to our City. Our staff will provide you with information regarding certain Federal, State, County and City requirements. However, this is provided as an information and referral service and does not constitute final or complete interpretation of legal requirements which must be obtained from the appropriate administering agency. In addition, you may wish to consult with an attorney to insure that your business meets all legal requirements. BUSINESS LICENSE TAX All persons or companies conducting business in San Jose must obtain the business license tax, whether or not they have offices located in San Jose. This tax is required prior to the commencement of business in San Jose. Key sections of the San Jose Municipal Code regarding business operations are as follows: 4.76.050 Business. The term "business" shall include all activities engaged in or caused to be engaged in within this city including any commercial or industrial enterprise, trade, profession, occupation, vocation, calling, or livelihood including rental or lease of residential or nonresidential real estate and mobile- home parks, or independent contractors, whether or not carried on for gain or profit, but shall not include the services rendered by an employee to his employer. 4.76.070 Engaged in business. "Engaged in business" means the commencing, conducting, operating, managing or carrying on of a business and the exercise of corporate or franchise powers, whether done as owner, or by means of an officer, agent, manager, employee, servant, or otherwise, whether operating from a fixed location in the city or coming into the city from an outside location to engage in such activities. 4.76.075 Evidence of doing business. Whenever any person shall, by use of signs, circulars, cards or any other advertising media, including the use of telephone solicitation, hold himself out as, or represent that he is, doing business in the city, then these facts may be used as evidence that such person is doing business in the city. 4.76.170 License-Required There are hereby imposed upon all businesses in the city license taxes in the amounts hereinafter in this chapter prescribed. It shall be unlawful for any person, either for himself or for any other person, to commence, transact or carry on any business in the city not excluded by this chapter without first having procured a license from the city to do so, or without complying with any and all provisions contained in this chapter. The carrying on of any business without first having a license under this chapter from said city so to do, or without complying with any and all provisions of this chapter, shall constitute a separate violation of this chapter for each and every day that such business is so carried on. 4.76.220 License-For multiple businesses at one location. If a person engages in two or more separate businesses at the same establishment or location, there shall be a separate license issued for each business. Separate business operations are further defined as involving two or more separate and distinct business entities or names wherein separate sets of accounting records, bank accounts, and the like are maintained. 4.76.225 License-For the same business at multiple locations. Notwithstanding any language in this chapter to the contrary, each branch establishment or location at or from which a person carries on the same business shall not be deemed a separate business, but all such branches and locations shall be treated as one business. 4.76.300A Licenses not transferable Licenses issued pursuant to this chapter are not transferable or assignable by the licensee to any other person, nor shall any tax paid by any person under the provisions of this chapter be applied in whole or in part to the payment of any tax due or to become due from any other person. 4.76.335B Refund-Credit No refund of any tax collected pursuant to this chapter shall be made because of the discontinuation, dissolution or other termination of a business. TAX RATE All businesses pay a basic tax rate of $150. Some businesses pay additional tax increments based on number of owners and employees. Commercial and residential landlords and mobile home parks pay based on square feet, units or lots respectively. The rates are shown below: TAX SCHEDULE   TYPE OF BUSINESS   ANNUAL TAX ADDITIONAL TAX INCREMENTS   NOT TO EXCEED Residential Landlords $150.00 up to 30 units $5.00 per unit over 30 $ 5,000.00* Commercial Landlords $150.00 up to 15,000 sq. ft. $.01 per sq. ft. over15,000 $ 5,000.00 Mobile home Parks $150.00 up to 30 lots $5.00 per lot over 30 $ 5,000.00 All other Businesses $150.00 up to 8 (owners + employees) $18.00 per person over 8 (owners + employees) $25,000.00

BUSINESS TAX ADMINSTRATIVE FEE In addition to the business tax, a non-proratable, non-refundable administrative fee, as set forth in the Schedules of Fees adopted annually by the City Council, shall be required on all business tax accounts, including the renewal of those accounts. EMPLOYEES The San Jose Municipal Code (Section 4.76.060) defines "employee" as "each and every person engaged in the operation or conduct of any business, whether as owner, member of the owner's family, partner, associate, agent, manager or solicitor, and each and every other person employed or working in such business for a wage, salary, commission or room and board." AVERAGE NUMBER OF EMPLOYEES For an established business, the number of employees is computed based on the average number of owners and employees employed in the year (twelve month period) preceding the year for which the certificate (for payment of tax) is issued. For new businesses, an estimate number of employees to be employed is applied. (* Not including Business Tax Administrative Fee) The average number of employees should be computed by adding your weekly, bi-weekly or monthly payroll figures (# of employees) and dividing by 52 (weeks), 26 (two week periods) or 12 (months). For employers reporting to the State Department of Employment, the monthly reports to the State should be used as the basis for computation. OUT-OF-TOWN BUSINESSES If you conduct business in San Jose from an office based outside San Jose, you may be entitled to an apportioned tax rate (Section 4.76.760). NOT A LICENSE TO OPERATE When you pay your business tax, you will receive a certificate (sometimes called business license) which is an official receipt for payment of tax. This certificate must be displayed conspicuously in your place of business. This certificate does not indicate clearance for zoning, fire code, occupancy, or any other City, County, State or Federal permit or license which may be required for your type of business. TAXES DUE/QUARTERLY RENEWAL PERIOD Taxes are due and payable once a year in advance. All businesses are placed on a staggered (quarterly) billing system. Certificates are assigned expiration dates as follows: January through March December 31 April through June March 31 July through September June 30 October through December September 30 PAYMENT - NO NOTICE REQUIRED Although the City does issue renewal notices as a courtesy to businesses, the law specifically provides that notification is not required (Code Section 4.76.281). It is your responsibility to pay the tax on the due date whether or not you have received a renewal notice. You may pay by mail using check or money order, or you may come in person in the Treasury Office and pay by check, money order, cash, Master Card or Visa. The Treasury Office is located in City Hall, 200 East Santa Clara Street, San Jose, Ca 95113. (Corner of 4th and Santa Clara.) PENALTIES Failure to comply with the Business Tax Ordinance is a misdemeanor violation. Furthermore, any person who fails to pay the tax prior to the start of business is liable for a 25% penalty of the total tax due plus interest. Should the tax remain unpaid for a period exceeding one calendar month beyond the start date, an additional 25% penalty plus interest is assessed. The interest rate is 1.5% a month on the unpaid tax. PAYMENT MUST BE RECEIVED OR POSTMARKED ON OR BEFORE THE DUE DATE OR PENALTIES/INTEREST WILL BE APPLIED CERTIFICATE EXPIRATION DATE BUSINESS TAX DUE DATE FIRST PENALTY 25% INTEREST 1.5% SECOND PENALTY 25% INTEREST 1.5% December 31 January 1 January 2 February 2 March 31 April 1 April 2 May 2 June 30 July 1 July 2 August 2 September 30 October 1 October 2 November 2 FINANCIAL HARDSHIP The Financial Hardship Exemption Program is for sole proprietors, husband, and wife ownership or domestic partner ownerships that have no employees and gross less than twice the poverty level for a business year. A corporation owned by one person, husband and wife or domestic partnership; domestic partnership will also qualify for this program. If eligible, you will need to complete a “Hardship Exemption” form and pay the exemption fee of $33.00 at the time of application. You will not be asked to provide any business records for the Financial Hardship Exemption Program. However, the City can at any time request business records (Federal tax return 1040 and all schedule C’s or E’s) after the closure of the federal tax year, to confirm eligibility. Click here for more information on Financial Hardship AUDIT The City may audit your records at any time for up to a three year prior period. Thus, you should maintain adequate records to support the figures reported for taxing purposes. EXCLUSIONS AND EXEMPTIONS Certain businesses are excluded or exempted from payment of the tax. Exclusions (Section 4.76.600) include banks, insurance companies and associations to the extent provided in the State Constitution and any person exempt from City tax by State or Federal law. Exemptions include, but are not limited to, the following: Section 4.76.640 Certain organizations - Entertainment or activities sponsored by fraternal, religious, educational or public association.   Section 4.76.650 Charitable entertainment.   Section 4.76.660 Charitable organizations.   Section 4.76.710 Peddling wares produced by seller.   Section 4.76.715 Sale of hand-produced goods. Artists and craft persons who sell only their own designed, hand-produced goods and wares shall be exempt from payment of any business tax under the provisions of this Chapter if the following is established by the person claiming the exemption to the satisfaction of the Director of Finance: A. Sale of goods and wares in the artists or craftsperson's dwelling under San Jose Municipal Code Section 20.08.101 for a period of no more than four consecutive days twice in any calendar year; or B. Continuous sale of goods and wares on an annual basis at only one (retail) location so long as the retail value of inventory at such location does not exceed two thousand dollars ($2,000.00). Section 4.76.720 Senior citizens earning less than social security earnings caps. Section 4.76.735 Transient marketers at public markets conducting business without a "reserved space." Section 4.76.741 Participation in special events conducted by a charitable or nonprofit organization; exemption is for the duration of the event only. OTHER GENERAL REQUIREMENTS All businesses must obtain a fictitious name clearance "approval" for the business name from the County Clerks Office. The business location, whether owned or leased, must be properly zoned by the Planning Department and the building must meet fire code and hazardous materials standards by the Fire Department. The appropriate permits from the departments must be secured before the start of business. Residential Landlords must obtain the required Occupancy Permit and pay a Rent Dispute Mediation Fee by the Neighborhood Preservation Department. Certain businesses, such as peddlers and taxi drivers must obtain a Regulatory Permit by the Police Department prior to obtaining business tax. OTHER CITY REQUIREMENT Depending on the nature of your business, you may need other permits or clearances from various city departments. The Treasury Department accepts applications and fees for certain regulatory permits issued by the Police Department. Following is an overview of city requirements. FINANCE DEPARTMENT Revenue Collection Division - Business Tax and Permits 200 East Santa Clara Street, 1st Floor Tower, Customer Service San Jose 95113 535-7055 www.csjfinance.org Enforces the business tax ordinance, issues business tax certificates, and accepts applications for the following regulatory permits: Amusement devices, carnivals/circuses, Christmas tree lots, flower vendors, handbills, peddlers (e.g. catering trucks/ ice cream trucks), pawnbrokers, pool and billiard rooms, pumpkin patches and second hand dealers. Risk Management 4th Floor Tower 200 East Santa Clara Street San Jose 95113 408-535-7060 Certificates of Insurance required by City Ordinances and Workers Compensation when contracting with the City of San Jose are filed in this office. FIRE DEPARTMENT Fire Prevention Bureau 170 W. San Carlos St San Jose 95113-2005 277-4444 www.sjfd.com Business locations must meet Fire Department fire prevention standards. Businesses storing hazardous materials must obtain required Fire Department permits. The following types of businesses should obtain Fire Department clearance prior to commencing operations from any location: Auto body and paint shops, auto brake and tire shops, auto wrecking, car rentals, chemical recycling and recovery, chemical warehouse and manufacturing, contractor and construction companies, dry cleaning establishments, electronics, fertilizer storage, food processing, furniture manufacturing and refurbishing, general warehouse, hospital laboratories, medical centers, metal fabrication and welding, new car dealers, wholesale paint, pest control, plating, pool service and supply, printing, publishing and newsprint, retail gasoline stations, semiconductor manufacturing, towing/trucking/moving or delivery companies. PLANNING, BUILDING & CODE ENFORCEMENT Planning Department 200 East Santa Clara San Jose 95113 535-3500 www.ci.san-jose.ca.us/planning/sjplan All business locations must be in a zone suited to the type of business that is being conducted. You may also need a development or use permit depending upon your location which could be more limited than the applicable zoning requirements. The Planning Department will determine which of these apply to your particular case. Signs Permits should be obtained before contracting for construction or installation. Dimensions and other sign requirements are governed by the zoning and street footage. You will be asked for property address, location sketch showing major cross streets, measurements of the outside dimensions of the building and a photo of the building if possible. Home Occupation If you operate your business from your home, you should be aware of the restrictions outlined in the attached definition of "home occupation." Parking Depending on the nature and location of your business, you may be required to provide certain off-street parking spaces for business traffic. Building Division 200 East Santa Clara Street Room 200, 2nd Floor, City Hall San Jose 95113 535-3500 www.sanjoseca.gov/building Issues permits for new buildings and alterations or additions to existing structures; issues certificate of occupancy permits for new buildings or change of occupancy of existing buildings. Complaints for construction in process without proper permits. Electrical Division Issues permits for installation or modification of electrical systems. Authorizes meter release after inspection of work. Investigates complaints regarding installations regulated by Electrical Code. Plumbing/Mechanical Division Issues permits for installation or modification of plumbing systems, HVAC systems and restaurant hoods. Authorizes gas meter release after inspection of work. CODE ENFORCEMENT DIVISION 170 W. San Carlos St San Jose 95113 277-4528 www.ci.san-jose.ca.us/code Enforces property blight ordinances, weed abatement, multiple housing regulations, neglected vacant house ordinance, smoking ordinance, City zoning ordinances, sign regulations, abandoned vehicles, State of California landfill and recycling facilities regulations. The Division also issues permits or collects fees for the following: - Animal and fowl permits - Bee Keeping permits - Kennel permits - Neglected/Vacant House Registration - Weed Abatement Fees - 333 W. Santa Clara Street, (408) 277-5453 CODE ENFORCEMENT DIVISION (MULTIPLE HOUSING) 170 W. San Carlos St San Jose 95113 277-4528 Issues occupancy permits. Regulates multiple unit housing such as apartment houses, lodging houses and hotels, and conducts inspection for compliance. POLICE DEPARTMENT Permit Unit 201 West Mission Street San Jose 95110 277-4452 www.sjpd.org Certain businesses require a police regulatory permit. In some cases, Treasury will accept the application and fees, and Police Permits will approve and issue the permits. Certain permits require additional clearances from the following departments: Planning; Neighborhood Preservation, Code Compliance; and Risk Management for insurance. Treasury accepts applications and upon approval by the Police Department issues permits for: Amusement devices (pinball, electronic games, coin-operated devices); circuses and carnivals, flower vendors, pawnbrokers and secondhand dealers. The Police Department accepts applications fees and issues permits for: bingo, going out of business sales, canvassers of periodicals, massage parlors, masseuses, masseurs, public dance halls, taxicabs/limousine service regulations, tow-car business, regulation of display of reading material and peep show establishments, peddlers, pawnbrokers, pool and billiards. City Clerk www.sanjoseca.gov/clerk/ Municipal Code OTHER GOVERNMENT AGENCIES Depending on the nature of your business, you may require additional government permits and clearances. The following is a referral listing to assist you in locating other agencies and services. However, Treasury does not guarantee that this information is complete or current. COUNTY OF SANTA CLARA