What is a business license?
A business license is an annual regulatory permit for the privilege of conducting business within the City. This license is issued after a business has complied with applicable local, state and federal requirements and has paid the annual gross receipts tax, applicable fees and assessments. Business license taxes, applicable fees and assessments are due and payable prior to commencing business within the City of Santa Monica.
Who is required to get a business license?
Any person or entity who conducts business in or whose business is based in Santa Monica, must obtain a Santa Monica business license. Conducting business without a license can result in penalties, notices of violation, citation and possible criminal prosecution.
What do I need to know to open a business in Santa Monica?
Santa Monica is a vibrant business community and one of the most popular tourist destinations in California. For helpful information on opening a new business or expanding your existing business, visit Santa Monica Economic Development.
What is my business license tax based on?
Business license taxes are based on the tax rate associated with your assigned business classification (see Classifications & Tax Rates). With only a few exceptions, business license taxes are $75 plus a percentage of your Santa Monica gross receipts in excess of $60,000 for the calendar year.
How is my tax rate determined?
Tax rates are based on the business activity. For a detailed listing of the tax rate groups, see the Classifications & Tax Rates summary.
How do I know how much I'll have to pay?
While almost every business in Santa Monica is subject to business license tax, other fees may apply to your application and renewal. Open the Business License Tax Calculator (coming soon) to assist you in calculating your business license tax liability. For more specific information on the City's various fees, see the Business License Classification & Tax Rates summary and the City's interactive Fees Database (coming soon).
What is the State CASp $4 fee I have to pay each year?
On September 19, 2012, Governor Brown signed into law Senate Bill (SB) 1186 which adds a state fee of $1 on any applicant for a local business license, similar instrument or permit, or renewal. The purpose of this fee is to increase disability access and compliance with construction-related accessibility requirements and to develop education resources for business in order to facilitate compliance with federal and state disability laws, as specified.
On October 11, 2017, Governor Brown signed into law Assembly Bill (AB) 1379, which changed the State CASp fee starting January 1, 2018. This bill accomplishes the following:
- Removes the sunset provision for the CASp fee, establishing it as a permanent fee.
LEGISLATIVE UPDATE - Please be advised that effective January 1, 2024, the SB 1186 Fees will remain $4.00, with local jurisdictions retaining 90% of the fees indefinitely. Assembly Bill 2164 (Lee, 2022) removed the sunset provision for the fee, enabling local governments to collect the $4.00 and 90% retention indefinitely.
Under federal and state law, compliance with disability access is a serious and significant responsibility that applies to all California building owners and tenants with buildings open to the public. You may obtain information about your legal obligation to comply with the disability access laws at the following agencies:
How do I know if my business is allowed where I want to locate it?
Please check with the City's Planning Division to determine if your business’ use is permitted in a particular zone. The City of Santa Monica has various land uses or zones that are defined in the City's Municipal Code that allow for various types of business uses.
I conduct business in several cities. Can I get just one license to do business in ALL of them?
No, there is no universal business license. If you are conducting business in multiple jurisdictions, you will need to contact each jurisdiction to determine if a business license is required. It is important to know that most California cities and counties have a Business License tax ordinance. However, each city has its own tax rate, structure, and requirements. Check with the appropriate city or county for theirs.
Is my information confidential?
The City's Municipal Code guarantees the confidentiality of gross receipts information and prohibits revealing the information to anyone not charged with the administration and enforcement of the ordinance. Business name, location, phone number, and owner's name are subject to the California Public Record Act.
May I register my business from a PO Box or PMB located within Santa Monica?
A post office (PO) box or private postal mailbox (PMB) address may be used as the mailing address of record for receiving information regarding a Santa Monica business license; however, a PO Box or PMB address does not constitute a business location for business licensing purposes. A PO Box or PMB address cannot be substituted as the business location address for any business, whether physically located within the City of Santa Monica or located outside of the City.
