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What is the Business License and Sales Tax Audit?
The San Jose Office of the City Auditor is currently conducting a city-wide search of all businesses who do not have a business license and/or
businesses who are selling merchandise and do not have a seller's permit. If your business
is within the City limits and you are not sure whether you need a business license or
seller's permit, please phone our office at (408) 535-7055. We will be happy to answer any
questions you may have.
Who is required to have a Seller's Permit?
You need a Seller's Permit if you sell merchandise at
retail or wholesale in California. A Seller's Permit grants you the privilege of making
sales in California. For that privilege, you are required to pay sales tax on the sales
price of the merchandise you sell. The law allows you to reimburse yourself for the tax
from your customers. Making sales without a Seller's Permit is a misdemeanor which is
punishable by a fine of not less than $1,000. There is no fee to obtain a Seller's Permit.
Please call (408) 535-7055 for more information or e-mail Tax Revenue.
Who is required to have a business license?
All persons or companies conducting business in the City
of San Jose are required to pay a business license tax whether or not they have offices
located in San Jose. 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 outside San Jose, you may be entitled to an
apportioned tax rate.
When and where am I expected to pay?
You must register with the San Jose Business License Tax
Office, City Hall,
200 East Santa Clara St, San Jose, CA 95113, and pay the
Business License Tax prior to the commencement of business.
What are the tax rates?
The basic annual tax is $150. 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.
What if I do not pay?
Failure to comply with the Business License Tax Ordinance
is a misdemeanor violation. Furthermore, any person who fails to pay the tax prior to the
start of business is liable for a 25% penalty of the total tax due. Should the tax remain
unpaid for a period exceeding one calendar month beyond the start date, an additional 25%
penalty plus interest is assessed.
Who are subject to audit?
The City may audit your records at any time for up to a
three year prior period. Thus, you should maintain adequate records to support the figures
submitted for taxing purposes.
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