Business License Classifications and Tax Rates

A business license is an annual regulatory permit for the privilege of conducting business within 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 as well as any 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.

Businesses pay business license tax annually based on their assigned classification. Business license tax is assessed on the gross receipts attributable to business conducted in Santa Monica. With a few exceptions, business license taxes are $75 plus a percentage of calendar year gross receipts in excess of $60,000. The exceptions to this formula are:

  • Businesses that qualify for the business tax exemption, defined as a business that earns less than $100,000 in worldwide gross receipts in a calendar year. These businesses can apply for an exemption from paying business license tax. Even if an exemption from the license tax is granted, a business license is still required as well as payment of any associated fees and assessments

NOTE: Businesses that qualify for the business license tax exemption are required to maintain a business license and pay all fees and assessments. Verification of taxable gross receipts may be requested. Failure to apply for or renew the business license by the deadline disqualifies the business from exercising the exemption and imposes both tax and late payment penalties.

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