What is a business tax certificate?
A business tax certificate is an annual tax for doing business within the incorporated area of the City of Santa Rosa. The City’s Municipal code requires that you obtain a business tax certificate when you conduct business activity within the City of Santa Rosa – even if your business is located OUTSIDE the city limits or you have a business license from another city.
Who is required to have a City of Santa Rosa business tax certificate?
Any person whose business is located in Santa Rosa or conducts business in Santa Rosa must apply for a business tax certificate within 30-days of the date the business commences. Conducting business in Santa Rosa without a business tax certificate can result in penalties, violation notices, citations and court action.
Where do the tax funds go?
Business taxes help pay for City services such as fire, public works, police, senior and children’s programs as well as other community services. These services benefit businesses, business owners, property owners and the general public.
How is the business tax calculated?
The tax is based on your estimate of annual gross receipts. At the end of each calendar year MuniServices will send the necessary forms for renewal. Any taxes that were overpaid will be adjusted at that time. In addition, any amount still owed must be paid at the time of renewal. Those businesses located outside of Santa Rosa should only use the gross receipts earned within the city limits of Santa Rosa to calculate their tax due.
What are gross receipts?
“Gross receipts” includes the total of amounts actually received or receivable from sales and the total amounts actually received or receivable for the performance of any act or service, of whatever nature it may be, for which charge is made or credit allowed, whether or not such act or service is done as a part of or in connection with the sale of materials, goods, wares or merchandise. Included in “gross receipts” shall be all receipts, cash, credits, and property of any kind or nature, without any deduction there from on account of the cost of the property sold, the cost of materials used, labor or service costs, interest paid or payable, or losses or other expenses whatsoever.
How long is the tax certificate good for?
All business tax certificates are valid until December 31st of each year. Each January you will receive a renewal notice in the mail with a return envelope for payment, due by the last day of February.
Do I need zoning clearance?
A Zoning Clearance should be obtained by all new businesses located within the City of Santa Rosa, as well as businesses relocating within the city limits. Prior to obtaining a Zoning Clearance it may be necessary to apply for a Conditional Use Permit, depending upon the type of business and the proposed location. If a Conditional Use Permit is required, the processing time may vary from “over the counter” to several weeks or longer. If zoning allows the proposed use without additional planning approvals, a Zoning Clearance may be issued immediately upon request from Community Development (Rm. 3 at City Hall). For additional information about Zoning Clearances, and/or requirements, including applicable fees please contact our Community Development department.
Do I need a business tax certificate if I work out of my home?
Yes. Businesses operated out of the home require a business tax certificate and must comply with the City’s Zoning Ordinance. The Zoning Ordinance regulates types of home-based businesses and the manner in which they may operate. For further information please contact our Community Development department
I do some minor consulting on a part-time basis. Do I have to get a Business Tax Certificate?
Yes, businesses both large and small are required to obtain a Business Tax Certificate to be in compliance with the City Code. If the consulting work is performed as an independent contractor and attributable to a location within the City limits, such as your residence, a tax liabilty exists.
What is the City's Franchise Tax Board (FTB) business tax enforcement program?
As a result of state legislation, the California State Franchise Tax Board (FTB) is authorized to disclose certain records related to business activities of residents, corporations, and other entities within the City.
Why did I receive a FTB notification?
Our records from the Franchise Tax Board show that you, or a spouse, or the named entity is reporting some type of business activity to the Franchise Tax Board using a City of Santa Rosa address. This indicates you may be operating a business in the City that has not yet obtained a Business Tax Certificate.
How long do I have to respond to the notification?
We are requesting a response no later than 15 days from the date of the notification. Please be aware that if you have a City of Santa Rosa business tax liability and do not respond, interest and penalties on the tax liability will continue to accrue. To file in a timely manner and avoid interest and penalties, City of Santa Rosa Business Tax should have been paid prior to doing business within the City.
All I have is rental property in Santa Rosa; do I still need a business tax certificate?
Owners of any commercial rental property or more than three units of residential rental property are required to pay a business tax based upon gross receipts (rents) resulting from rental activities within city limits of Santa Rosa.
What if I have more than one business or more than one location?
If you own more than one business, a separate business tax certificate is required for each type of business and for each location in Santa Rosa.
I live in Santa Rosa, but my business is located outside the city limits. What are my liabilities for the City of Santa Rosa?
As long as all business activity is conducted outside the City of Santa Rosa, there is no need to obtain a City of Santa Rosa Business Tax Certificate. If this business location is primarily for clerical purposes and the actual business location is elsewhere you will need to file your Business Tax Certificate under the Corporate Headquarters category. Please note: the receipt of business mail at a PO Box in Santa Rosa, is considered doing business in the City.
My business entity (Corporation, LLC, Partnership, etc) is entirely passive and/or dormant and it is just paying a minimum fee to the Secetary of State. Is it required to get a City Business Tax Certificate?
Yes. If your business is registered as active with the Secretary of State and reporting on a business return with the FTB and IRS, it will need a Business Tax Certificate. By maintaining a business entity within the City, whether transacting public business or not, it is considered operating a business under the City Code.
I just purchased this business. Can I use the business tax certificate from the previous owner?
No. A business tax certificate cannot be transferred or re-assigned. As a new owner, you need to apply for a new business tax certificate in your name.
What if I close or sell the business?
Business tax certificates are NOT automatically canceled. We need to hear from you. You may send written notification, or email us at email@example.com. Please be prepared to provide the date the business closed or was sold, the gross receipts up to that point and the name of the new owner if applicable.
What if I receive this notification and I no longer have a business?
Please note that there is a business tax liability for each of the prior three calendar years of operation within the City, but none for calendar years when the business was not operated. If you previously conducted business in the City of Santa Rosa and never registered for the Business Tax Certificate, please provide gross receipts for the applicable years of business, closed business date and the information asked for on the application.
I am not doing "business". What does the City of Santa Rosa consider to be a business and why do they think I am operating one?
Most activities conducted within the City on a continuing and regular basis are considered engaging in business and subject to business tax. Specifically, City code 6-04.010 defines business as:
As used in this chapter, "business" includes professions, trades, and occupations and all and every kind of calling carried on with or without the intent of making a profit.
State Law (Business and Professions §16300) allows cities to use the manner which a taxpayer reported income to the IRS and Francise Tax Board to determine whether the taxpayer performed services for an employer as an employee or operated a business entity. A person who is an employee and whose compensation is reported on a Federal W-2 in not a business and is not subject to the business tax.
What happens if I pay late?
There is a penalty of 15% of the tax amount due and interest of .84% for each month you are late.
What if I do not respond?
If you do not respond, you may be in violation of the Santa Rosa City Code and collection action will be initiated against you. You may have a City of Santa Rosa business tax liability and if you do not respond, interest and penalties on the tax liability will continue to accrue. The amount of any tax and penalty imposed shall be deemed a debt owed to the City.
What if I want to move the business?
Always check with the City’s Community Development Department to verify that the new location is zoned properly for the intended use and whether a “Use Permit” or another type of approval is required. You must notify MuniServices whenever you change your address, phone number, business activity or ownership information.
How can I apply?
You may apply online, by mail or fax. However, if you use the mail, double check your business classification and your rate fee calculation prior to sending in your application and payment. Errors may delay the process. To print a Business Tax Certificate Application form click here.
If you are not sure of your calculations, please contact MuniServices:
1007B West College Ave 305
Santa Rosa, CA 95401
Phone: (855) 219-4339
Fax: (855) 219-4338
Do state-licensed contractors also need a City of Santa Rosa business tax certificate?
Any person licensed as a contractor by the State Contractor’s Board must obtain a business tax certificate if they are, (1) conducting business in the City; or (2) based in the City, whether conducting business in or outside of the City.
Do I need a seller’s permit?
Every business intending to sell tangible goods, wholesale or retail, commercial or home-based, sales or repairs – requires a California seller’s Permit. For more information contact the State Board of Equalization.
I am paid on a “1099” basis with my employer (not as an employee); do I need a business tax certificate?
Yes. If you are not an employee, you are considered an independent contractor. Providing services to, or on behalf of, a business may constitute an employee/employer relationship or an independent contractor relationship, depending on the nature of work and the degree of control involved.
Where do I go for a Massage Therapist Permit?
Starting August 1, 2009 Applications for CAMTC (California Massage Therapy Council) certificates became available. The Santa Rosa Police Department will no longer issue massage therapist, massage business or massage therapist/business permits. However, all Massage business/therapists still need to obtain a business tax certificate and zoning clearance when applicable.
For guidelines, requirements and information to the statewide certification, contact the California Massage Therapy Council at (916)669-5336 or www.camtc.org/
All permits issued by the SRPD are valid until the expiration date noted on their permit.
I operate a Child Care service; do I have to pay City of Santa Rosa Business tax?
Any person conductiong a business as a child day care provider for more than 8 children is required to obtain a City of Santa Rosa Business Tax Certificate.
I operate a Residential Care facility/center; do I have to pay the City of Santa Rosa Business tax?
A residential care facility which serves 7 or more is subject to Santa Rosa Business Tax.
What is the new $1 fee I see on your forms and do I have to pay it?
On September 19, 2012 Governor Brown signed into law SB-1186 which adds a state fee of $1 on any applicant for a local business license or similar instrument or permit, or renewal thereof. This new law will take effect on January 1st, 2013. The purpose is to increase disability access and compliance with construction-related accessibility requirements and to develop educational resources for businesses in order to facilitate compliance with federal and state disability laws, as specified. You may obtain information about your legal obligations and how to comply with disability access laws at the following agencies:
The Division of the State Architect at www.dgs.ca.gov/dsa/Home.aspx
The Department of Rehabilitation at www.rehab.cahwnet.gov
The California Commission on Disability Access at www.ccda.ca.gov