How to File For a City Business License (Video)

by Joshua Botello

If you are looking to open a business in a particular city, a city business license is a must when it comes to operating legally. The purpose of the license is for cities to regulate what businesses are in the city and collect local taxes for all businesses operating within the city limits. I’ll cover all the things you will need to look out for and what information you are going to need for filling out the application. The first thing you want to know is where your business is going to be: a home business or a storefront? There are few differences, So let’s hop on to the internet and get to that application.

Ok, so I’m in my web browser and starting on google.com. I am going to use our city as an example to go to cityoflaverne.org. Here I am on the webpage. What we need to do is navigate to the business department. Luckily it’s right here and we can just click on “business licenses” to head over. For the city of La Verne they only do printed applications, but we need to do 3 things: fill out the application, determine our fees, and see what zoning regulations there are.

But first let's get that application.

Fill Out The Application

Once we click it, we navigate to another page where we get some more information. The application is pretty standard for most cities. What you are going to need is a: DBA, EIN if you have one, and a Driver's license. If you are applying for the first time, mark “new application”.

Then we put our business name and business contact information or primary contact if a home business. Next, we add our business description. I’m going to be consulting business so I can put that there.

This Federal ID is the EIN number you would have applied for. If you don’t have one you can apply for one using my video here. I will put a dummy number to show what it looks like.

The resale number is your seller’s permit. I also have a video on how to get in the card above. If you think you need one, check out that video first then come back. I do go in deeper to what instances you need this permit but if you’re not gonna be selling a physical product, that is going to be taxed, don't worry about this.

This is the state license number. This varies from city to city, this could be a contracting license number or just a driver’s license number depending on your business. You can always call the city clerk to ask for clarification or your local chamber of commerce to help you out.

Then we put your business type, again you need to know how your business is structured to check that box. I’ll be the sole proprietor.

Here is an interesting question about sic code. I don't know the sic code off the top of my head to put here. Let’s open up another tab and search “SIC code” + “your business description”. You get a result from Naics that handles SIC codes as well. They use 7311. We’ll just make sure the description is right. It looks good so we can put that on our application.

Next is going to be some address information. There may be a few spaces for you to choose. For example, If you are storefront you would choose the top one if a home-based business the bottom one here. This last one is different; this means that you only get served at a different address. We don't need to worry about this last part so let's move on.

This bottom section is for the owners, general partners or members of an LLC. You will need to put all the information for members, so make sure you do that. I'm applying as an individual, so I'll just put my information as a sole proprietor.

The final section is the fees. So let’s get those.

Determine License Fees

The application should have opened a new tab so back over to that list and choose business license fees this time. Here is the fee Schedule for business licenses. You will need to find your business category that falls in line with your business description and SIC code.

If you are a retail business you will choose retail from this list. I will be a consultant, so i will chose professional business.

Now, we need to estimate our tax fees. You will just need to estimate what your gross sales are. If they are $10,000 or less, it's a flat $35. If it's more like say $15,000 dollars you need will do a little bit of math. Our rules add 40 cents per thousand, so if we have 5,000 more than $10,000 is 2 dollars.

So let's go back to our application.

I'll put my estimated $15,000 in gross receipts for the next year. The next two boxes don't apply to us. So now we have the tax number calculated at $37. So that brings us up to $41. We have one more thing to do.

We need to do our home occupancy for our home-based business. Go back to our other tab and back to the business license homepage.

Zoning (Home Occupation Permit)

Now, we need to click on the In-home Business link. One thing first, this is the fee: $50. Remember that. It’ll be important later.

This is the permit application for an in-home business. If we open it up it's pretty straight forward. The first page has all the rules and the second page is the permit application. A lot of the information is going to be the same. If you own the property put your info and sign. If you don't own the property, you will need to get permission and a signature from the owner or manager and HOA if you need to. Once that is done. Let’s head back to the application.

Now remember what the fee was for the home occupation permit? That's right $50. Let’s put that in and add everything up.

We have our $37 license tax, the $30 processing fee, our zoning fee of $50, this state fee of $4 which brings to our grand total of $121. Check that everything is in order and complete and print both of these forms to sign and walk it in or mail it.

Remember, each individual city will have different applications and different rules governing what business and zoning is allowed. They will also have different costs. It is a good idea to factor these costs into your business plan before you attempt to file these permits.

Funded in part through a Cooperative Agreement with the U.S. Small Business Administration. All opinions, conclusions, and/or recommendations expressed herein are those of the author(s) and do not necessarily reflect the views of the SBA.