Tax and Penalty Assessment

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 Small Business Exemption
  • Non-profit or tax exempt businesses
  • Businesses that pay flat tax
  • Corporate or Administrative Headquarters

ESTIMATE your potential business license tax.

Classifications & Tax Rates

The following tables summarize Santa Monica business license classifications and tax rates.

Business Types Taxed on Gross Receipts

Business Type

Tax Rate Classification

Business License Tax Rate per $1,000 in Gross Receipts ¹

Corporate or Administrative Headquarters ²
Manufacturer / Retail / Wholesaler
Recreation and Entertainment
Rental of Residential or Non-Residential Property
Utilities
Group I $1.25 (0.00125 x Gross Receipts)

Auto Dealer ³

Group II $1.25 (0.00125 x Gross Receipts)
Agent / Broker
Contractor / Specialty Contractor
Service
Group III $3.00 (0.003 x Gross Receipts)

Professions

Group IV $5.00 (0.005 x Gross Receipts)

Business Types Taxed on Flat Rates

Business Type

Tax Rate Classification

Business License Tax Rate

Delivery Group V $50 per vehicle
Planners and Promoters for Special or Community Events Group VI $150 per day
Vendor Permit SMMC §6.36 $50 flat rate
Taxi Group VII $250 per vehicle

¹ Gross receipts should be rounded up to the nearest thousandth (ex. $95,432 should be rounded to $96,000). The tax rate applies only to those gross receipts in excess of $60,000. The minimum tax of $75 is due for all gross receipts up to $60,000.

² Corporate or Administrative Headquarters are taxed on the basis of the cost of operation in Santa Monica, where the cost of operation is equal to the sum of the annual rental value of the property, its payroll, and all utility costs.

³ Auto Dealers - Maximum business license tax due is $25,000 per fiscal year.

NOTE: Businesses located in Santa Monica that qualify for the SBE 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.

New Application Penalty Schedule

For business license applications and payments received more than 30 days after the start of operations in Santa Monica, the following table outlines the penalty schedule for the outstanding taxes and assessments due:

Number of Days After Start Date Payment is Received

Penalty

31 days 20%
2 months 30%
3 months 40%
4 months 50%
5 months 60%
6 months 70%
7 months 80%
8 months 90%
9 months or more 100%

Renewal Penalty Schedule

For business license renewal forms and payments received after the August 31st penalty deadline, the following table outlines the penalty schedule for the outstanding taxes and assessments due:

Date Payment is Received

Penalty

September 1st 20%
October 1st 30%
November 1st 40%
December 1st 50%
January 1st 60%
February 1st 70%
March 1st 80%
April 1st 90%
May 1st & later 100%

Renewal Reporting Periods

The following table outlines the renewal reporting periods:

Renewal Type

Reporting Period

Licensing Period

Due Date

Regular Renewal
Prior Calendar Year
(January 1 - December 31)
Fiscal Year
(July 1 - June 30)
July 1st
1st Year Renewal
(Start date between January 1 - June 30)
Start Date - June 30
Fiscal Year
(July 1 - June 30)
July 1st
1st Year Renewal
(Start date between July 1 - December 31)
Start Date - December 31
Fiscal Year
(July 1 - June 30)
July 1st