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The City of San Jose welcomes your business to our City.   This guideline was developed by the Revenue Management Division of the City of San Jose to provide the business community with information regarding the Business Tax.

TAX RATE SCHEDULE

TYPE OF BUSINESS
ANNUAL TAX
ADDITIONAL TAX INCREMENTS
NOT TO EXCEED
San Jose Business $150.00 up to 8 employees (owners plus employees)
$18.00 per person over 8
$25,000.00
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
$0.01 per sq ft over 15,000
$5,000.00
Mobilehome Parks $150.00 up to 30 lots
$5.00 per lot over 30
$5,000.00

OUT OF TOWN BUSINESS TAX RATE SCHEDULE

Average number of days in San Jose during the year, with an average of 8 or fewer employees. The fee for any number of employees above 8 is $18.00 per employee.

Calendar Days
Tax
5 or less
 
No Fee
6 - 29
 
$37.50
30 - 89
 
$56.25
90 - 119
 
$75.00
120+
 
$150.00
 


BUSINESS TAX RENEWAL PAYMENT SCHEDULE

Each subsequent annual Business Tax payment is due and payable on the fifteenth (15th) day of the calendar month in which the business began.  Should the tax remain unpaid by the due date, a penalty of 25% is assessed. Should the tax remain unpaid for a period exceeding one calendar month beyond the due date, an additional 25% penalty is assessed.  The interest rate of 1.5% a month will also be assessed on unpaid tax and penalties.

WHO IS EXPECTED TO PAY

All persons or companies conducting business in the City of San Jose are required to pay the Business Tax.  Included are commercial landlords, residential landlords (renting 3 or more units), retail outlets, wholesalers, manufacturers, service companies, self employed professionals, independent contractors and home businesses.  If you conduct business in San Jose from an office located out of San Jose, you may be entitled to an apportioned tax rate.

WHEN AM I EXPECTED TO PAY

You must register and pay the Business Tax PRIOR to the commencement of business.

HOW OFTEN AM I EXPECTED TO PAY?

The Business Tax must be paid annualy.  Although the City does send renewal notices as a courtesy to the business community, San Jose Municipal Code 4.76.281 states that the City is not required to send notification to any person who is liable for the tax.  It is the responsibility of the individual business owner to be aware of their business tax due date and remit payment in a timely manner.  Refer to the Tax Renewal Payment Schedule at the top of this page.

WHAT ARE THE TAX RATES

The basic annual tax is $150.00.  Most businesses pay additional tax increments based on the number of employees.   Commercial and residential landlords pay additional taxes based on total square footage and number of units, respectively.  Refer to the Tax Rate schedule on the top of this page.

WHAT IF I DON'T PAY?

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 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 and penalty/ies.

HOW FAR BACK MUST I PAY

If you have been actively engaged in business without having paid the Business Tax, you may be liable for prior taxes, penalties and interest up to three (3) years in addition to your current tax.

TAX CERTIFICATES NOT TRANSFERABLE

Business Tax certificates are not transferable or assignable to any other person, nor shall any tax paid by any person be applied to the payment of any tax due from any other person.  When purchasing a business, new owners must register and pay the Business Tax.

FINANCIAL HARDSHIP

A sole proprietorship shall be exempt from the payment of any business tax imposed under the provisions of this chapter, SJMC 4.76.345, where the gross receipts of the sole proprietorship do not exceed the poverty level for the calendar year in which the business tax is due.

AUDIT

The City may audit your records at any time for up to a three-year period. Thus, you should maintain adequate records to support the figures submitted for taxing purposes.

WHERE DO I REGISTER?

City Hall, First floor, Customer Service Center 200 East Santa Clara Street San Jose, CA 95113.

If sending payment by mail, please make check payable to "City of San Jose"

For further information, call (408) 535-7055.  This information does not constitute final or complete interpretation of all legal requirements which may apply to your particular type of business.

 

 

 

Last Modified Date: 7/6/2011

 
 

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