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CITY OF

PACIFIC GROVE       

Business Licenses

60-DAY, PENALTY FREE, DEFERRAL OF THE BUSINESS LICENSE TAX AND DOWNTOWN BUSINESS IMPROVEMENT DISTRICT (BID) ASSESSMENT

In response to the economic impact of COVID-19 on local businesses, the City of Pacific Grove has enacted a 60-day, penalty free, deferral of the business license tax (PGMC 7.04) and Downtown Business Improvement District (BID) assessment (PGMC 6.50) as follows:

  • BUSINESS LICENSE TAX: Business license tax is normally due and payable to the City annually by July 31st without any penalties and is subject to incremental delinquency penalties (up to 50% of owed business taxes) if paid after July 31st. The City of Pacific Grove is pleased to extend the business license renewal and tax payment window until September 30, 2020. No penalties will be assessed if business licenses are renewed and taxes are paid by September 30, 2020.
  • BID ASSESSMENT: BID assessment (i.e. 35 percent of annual business license tax) is normally due and payable to the City when the business license tax is paid. The City of Pacific Grove is pleased to extend the deadline for payment of BID fees to September 30, 2020.
Welcome and thank you for choosing Pacific Grove for your business. The City of Pacific Grove requires all businesses, trades, professions, callings, or occupations operating in the City to obtain a Business License and pay an annual business license tax. The process to obtain a Business License varies depending on the type of your business and whether your business is located inside or outside the City of Pacific Grove. Please read the information below carefully to determine application requirements for your business:
 
STEP 1: Obtain Zoning Clearance (required for businesses located inside the City)
Home-based and commercial businesses (with a Pacific Grove business address) are required to obtain Zoning Clearance from the Community Development Department. This step is not requried for businesses which are headquartered outside the City but conduct business in the City of Pacific Grove.
STEP 2: Gather Additional Neccessary Documents
Depending on your business type and your specific situation, the following additional items may also be required to be submitted along with your business license application.
  • Employer Identification Number
  • Seller’s Permit (Resale #)
  • Fictitious Name (dba)
  • Health Permit
  • Liquor License
  • Worker’s Compensation Insurance
  • Storm Water Discharge Compliance
  • Disability Access Compliance

To learn more about these items, please check the "Additional Information" tab below. 

STEP 3: Apply for a Business License
After you have obtained the Zoning Clearance and gathered all necessary documentation, you can then submit your business license application along with required documents either online (strongly encouraged), by email, or by mail to 8839 N. Cedar Ave #212, Fresno, CA 93720-1832.
 
STEP 4: Pay Your Business License Tax and Fees
After your application has been received and approved, you will receive a confirmation email with payment details. For most types of businesses, the applicable fees are as follows:
Administration Fee    $21
SB-1186 Fee  $4
Business Tax  $0.001 of the annual gross receipts (min $15 & max $3000)
BID Assessment Fee    35% of Business Tax (only applies to businesses in the Business Improvement District)

Once you have made the required payment, your Business License will be issued via email or mail depending on your preference.

Who needs a Business License?
A business license is required for any person or business making a physical presence in the City conducting business. Whether the business is headquartered here in a commercial location, out of a home office, or headquartered outside of the City, but coming into our City to conduct business. Any individual, corporation, sole proprietor, partnership or any entity that wishes to conduct a business within the City of Pacific Grove must secure a business license. City law states that no person shall engage in business or transact and carry on an allowable business, trade, profession, calling or occupation in the City without having procured a license from the City to do so or without complying with any and all applicable provisions of Chapter 7 of the Pacific Grove Municipal Code. 

Is a separate Business License required for each brach or location of business?
Yes. A separate license is required for each branch or location of business.

How do I obtain a Business License?
Please refer to the information on the main Business License page above.

What costs are involved in obtaining a Business License?
For most types of businesses, the applicable fees are as follows:

Administration Fee              
 $21

SB-1186 Fee
 $4

Business Tax
 $0.001 of the annual gross receipts (min $15 & max $3000)

How long does It take to obtain a Business License?
It depends on the completeness of your Business License application. Your Business License could be issued in one business day if you submit a complete application along with all the required items including payment for your license.

Are there penalties if I am late paying for my business license?
Any business which operates without first obtaining a Business License or which fails to pay a renewal fee shall pay a penalty of up to 50% of the tax per month.

Do I need to display my business license?
All business licenses must be displayed on the premises in public view. For those businesses not having a fixed place of business in the city, the license must be physically carried on the person while conducting business and presented upon request.

When do I need to renew my business license?
All Business Licenses expire on June 30th annually. A renewal notice will be mailed to the mailing address on record approximately thirty (30) days prior to your expiration date. If you do not receive a renewal notice, please contact the Business License Office at (831) 920-3890. Be aware that the business license renewal notice is a courtesy notice only.  Failure to receive a renewal notice does not relieve the business owner of his/her responsibility to renew the business license and keep it current and valid.

How much does it cost to renew my Business License?
For most types of businesses, the applicable fees are as follows:

Administration Fee           
 $21 (or $46 if paid on or after August 2nd)

SB-1186 Fee
 $4

Business Tax
 $0.001 of the annual gross receipts (min $15 & max $3000)

What if my business address or name changes?
In case of the business name change only, please complete the Business License Change Form and submit to the Business License Division. In case of both name and address change, you will need to complete and submit both the Zoning Clearance form as well as the Business License Change form.  Processing fees will be due at the time the change is made.

What if I sell my business? Is my business license transferable?
A business license is not transferable. The license is terminated when business ownership changes. Advise the Business License Division should you sell your business. The new owner will be responsible for obtaining his/her own business license.

Do I need a Business License as a landlord receiving rents from the rental, leasing, subleasing or subletting of residential property located in the City of Pacific Grove?
If you become a landlord and rent, lease, sublease or sublet residential property for three or more units within the City, you are required to secure a business license.

Does a commercial or home-based nonprofit business, organization, or institution need a Business License?
Certain commercial or home-based nonprofit business, organization, or institution maybe exempt from obtaining a business license tax. An exemption letter from the Internal Revenue Service showing your 501(c)3 status will be required. 

Can I register to do business from a Post Office Box or Personal Mailbox (PMB) located within the City of Pacific Grove?
A post office box or personal mailbox (PMB) address may be used as the mailing address for your business.  A post office box or PMB address does not constitute a business location for business licensing purposes. A post office box or PMB address cannot be substituted as the business location address for any business, whether or not it is physically located within the City of Pacific Grove.

What type of ownership do I have?

  • Sole Proprietorship - A sole proprietorship is an unincorporated business that is owned by one person or by a husband and wife. You include the income expenses of the business on your own tax return. We must have the owner's name, home address, social security number or tax ID number, and driver's license number.
  • Partnership - A partnership is the relationship existing between two or more persons who join to carry on a trade or business. Each person contributes money, property, labor or skill and is expected to share in the profits and losses of the business. A partnership is not taxable on the income of the entity. Each partner includes his or her share of the partnerships income or loss on his or her tax return. Except for husband-wife partnerships, when there are two or more applicants on a business license application, who state they are partners in business, a Federal Tax ID number (EIN) is required.
  • Limited Liability Company - A Limited Liability Company ("LLC") combines traditional corporate and partnership characteristics.
  • Corporation - In forming a corporation, prospective shareholders transfer money, property, or both for the corporation's capital stock. The profit of a corporation is taxed to both the corporation and the shareholders when the profit is distributed as dividends. In California, the Secretary of State stamps the number only on the original articles of Incorporation.
  • Other Types - It is possible that the entity you formed is something other than what is documented above, such as a trust.

Fictitious Business Name Statements or Doing Business As (DBA)
You must file a Fictitious Business Name Statement with the Monterey County Clerk's office if you choose a business name that does not include your own last name. Contact the County Clerk’s office at (831) 755-5041 or visit their website.

State Sales and Use Tax Permit
If you sell tangible personal property, retail or wholesale, you are required to obtain a Seller's Permit (Retail Sales Tax Number) from the State Board of Equalization (SBE) for the purpose of collecting and reporting sales tax to the State of California. This seller's permit is required before your business license will be released. To obtain a Sellers' Permit, contact the SBE at (831) 754-4500 or visit their website.

Federal Employer Identification Number
If your business is organized as a corporation or partnership, or if you engage or plan to engage employees, you will need a Federal Employer Identification Number (FEIN) for the purpose of withholding FICA taxes and Social Security taxes. A FEIN is required even if your business has no employees. To obtain a FEIN, contact the Internal Revenue Service (IRS) at (800) 829-1040 or visit their website

State Employer Identification Number
If your business is organized as a corporation or partnership in the State of California, or if you engage or plan to engage employees in the State of California, you will need a State Employer Identification Number (SEIN) for the purpose of withholding State Income Tax, Disability and Unemployment Insurance. To contact the State Employment Development Department - Division of Audits, call (888) 745-3886 or visit their website.

State Franchise Tax Board
If you intend to have employees within the State of California or to obtain a Form 540 to estimate State Withholding Tax for yourself, contact the Franchise Tax Board (FTB) at (800) 852-5711 or visit their website.

Alcoholic Beverage Control Licenses
If your business will be selling or serving alcoholic beverages, contact the Alcoholic Beverage Control Board  by phone at (831) 755-1990 or visits their website.

Health Permit
A Health Permit is required for food handling including cottage foods, permanent make-up, tattooing or body piercing. Contact the Monterey County Health Department at (831) 755-4500 or visit their website.

Liability and Workers' Compensation Insurance
To obtain information regarding Liability and Workers' Compensation Insurance requirements, contact your local insurance agenda or the California Department of Insurance(800) 927-4357 or visit their website.

Storm Water Discharge Compliance
Senate Bill 205 which went into effect on January 1, 2020 requires certain new and existing businesses to comply with the State Water Discharge regulations. Contact the State water Board at 1-(866)-563-3107 or visit their website.

Disability Access Compliance
Federal and state law which applies to California building owners and tenants with buildings open to the public. Please contact the City’s Building Official at (831) 648-3191 or any of the following agencies: