Business Licenses and Permits

In California it’s all about location. Businesses will almost always have business license fee obligations, but to which jurisdiction they are obliged to pay taxes to will depend on their business address.

Most communities and counties in California impose a business license tax that is often based on gross receipts. However, whether a business pays taxes to a city or to a county usually depends on if the business is an incorporated city or in an unincorporated city or area of the county.

If a business is in city limits or does business within a town’s city limits, the business will fall under the town’s jurisdiction. However, if the business is located in an unincorporated area, like Castro Valley of Alameda County, the business will fall under the county’s jurisdiction.

There are, however, always exceptions to the rule. In Santa Clara County, businesses located in city have to pay taxes to that city. But the county itself does not issue business licenses. Thus, businesses in unincorporated areas of Santa Clara County do not face any local business license fee obligations.

If you ever decide to open a business in California, Santa Clara County is an obvious place to keep in mind.

Ryan Julson, Business License Research Analyst, Corporation Service Company

Tags: California, Corporation Service Company, Incorporated, unincorporated