It’s a small price to pay. Today.

San José is offering local businesses an opportunity to comply with overdue Business Tax requirements without penalty.

The City of San José Business Tax Amnesty is a one-time Business Tax Amnesty Program (the “Amnesty Program”) intended to educate local businesses, landlords and self-employed persons about the City’s Business Tax as set forth in Chapter 4.76 of the San José Municipal Code (the “Business Tax”).  In addition, the Amnesty Program eases the financial burden by forgiving past due-penalties and interest in connection with the payment of past-due Business Taxes for the current year and up to three prior years.  The four-month Amnesty Program begins December 1, 2012 and ends May 31, 2013 for the tax delinquency period of January 1, 2009 through December 31, 2012.

This one-time Amnesty Program will allow businesses, landlords, and self-employed persons to pay their unpaid and delinquent Business Tax without penalties, interest or criminal prosecution.   

All persons or companies conducting business in the City of San José are required to pay the Business Tax. Included are commercial landlords, residential landlords (renting three (3) or more units), retail outlets, wholesalers, manufacturers, service companies, self-employed persons, independent contractors and home-based businesses.

The Municipal Code establishes the basis for the Business Tax and how the tax is calculated.  Typically, the City’s Business Tax is based on the number of employees. For most businesses the annual tax is $150 for up to eight (8) employees, with an additional tax of $18 per employee over eight employees with a maximum tax of $25,000.  During the Amnesty Program, a business with 8 or fewer employees that owes back taxes, penalties and interest for the current and past three (3) years could save as much as $264 of the total amount owed the City.  Please refer to the chart below.

In addition, every person in the City engaged in the business of renting or leasing any residential or nonresidential real estate or mobile-home parks shall pay a Business Tax based on the number of rental units, square footage of space or lots held for rent as described in Sections 4.76.400 - 470 of the San José Municipal Code.

The Business Tax Hardship Exemption Program is available to sole proprietorships and corporations that are owned by one person, husband/wife or domestic partners that have 1) no employees and 2) annual gross receipts at or below less than twice the poverty level, which changes year to year. The term "poverty level" means the income amount established by the U.S. Department of Health and Human Services as the poverty guideline for a single person multiplied by two (2) for the calendar year in which the Business Tax is due.

For businesses that qualify for the Business Tax Hardship Exemption Program, there is an annual processing fee. The current processing fee is $38. Please refer to the chart below for the amount typically owed by a qualified business or a self-employed individual and the benefit of the Business Tax Amnesty Program.      

Amount Owed by Low-Revenue Generating Businesses1 that Qualify for Hardship Exemption
Categories	Tax	Penalties	Interest	Total Without Amnesty		Total With Amnesty
						Tax	Processing Fee2
Current Year	$150	$75	$27	$252.00		0.00	$38.00
1 Prior Year Current Year	$300	$75	$38.81	$413.81		0.00	$75.00
2 Prior Years Current Year	$450	$75	$106.31	$631.31		0.00	$110.00
3 Prior Years Current Year	$600	$75	$189.00	$864.00		0.00	$148.00

1 Historic poverty levels for the income tax reporting year: 2012: $22,340; 2011: $21,780; 2010: $21,660; 2009: $21,660
 2 FY 12-13: $38; FY 11-12: $37; FY 10-11: $35; FY 09-10: $38 

You will need to complete the Business Tax Registration Form and if applying for the hardship or exemption programs the Business Tax Hardship Exemption forms. The non-refundable exemption processing fee of $38 is due at the time the forms are submitted. You will not be asked to provide any business records for the current year financial hardship exemption. However, the City from time to time will request your business records, including state and/or federal income tax returns and/or other records to verify your eligibility.

The four-month amnesty period will be followed by increased enforcement and tax assessment, which could result in the taxpayer having to pay the full amount, including penalties and interest. The Business Tax Registration form available here. Forms may also be obtained at:

City of San José
City Hall, Customer Service Center
200 East Santa Clara Street, 1st Floor
San José, CA 95113

Or call (408) 535-7055 to speak to a City of San José Business Tax Customer Service Representative.