As we have detailed in previous posts, owning and operating a business in Sacramento is no small feat. There are a number of financial and administrative hurdles a Sacramento business owner must navigate before opening up shop. A proper business license is among the most important of these hurdles.
Any Sacramento small business attorney is sure to get a host of questions about the particular business licensing requirements for operating within city limits. As a threshold matter, nearly every type of Sacramento business is required to obtain a license. It is best to assume your business falls among those that need a city license than it is to assume your business will not need a license.
All license applications are made to the City Finance Department’s Revenue Division. Technically speaking, the license your business will obtain does not so much function as the City of Sacramento’s permission for you to conduct business, but rather as the City’s acknowledgement of your legal standing as a taxable entity. The typical business license, in fact, is called a Business Operations Tax Certificate.
In exchange for your Business Operations Tax Certificate and the City’s permission to operate, your business promises to pay the City’s yearly Business Operations Tax, the amount of which is determined by the type, size, and nature of your business. The Business Operations Tax is a yearly filing that must be paid on time if you wish to maintain the City’s permission to operate within city limits.
The initial application process is lengthy, complicated, and often requires you to provide an exceptional amount of documentation, depending on the business. A Sacramento business lawyer will be familiar with the types of documentation necessary to obtain a Business Operations Tax Certificate, and can help you estimate how much your Business Operations Tax will be each year.
Your lawyer will also explain the possible penalties of failing to pay your Business Operations Tax. A lapse in your tax payments can result in late fees, penalties, or, at worst, the revocation of your Business Operations Tax Certificate. Remember that the Business Operations Tax is a yearly expense that must be budgeted in order to ensure the smooth operation of your business, free of fees and penalties.
Some particular types of business may require special licenses in the City of Sacramento. The necessity of these special licenses is often tied to the nature of the products or services offered at these businesses, and the degree to which the products and services are regulated by the federal and local governments. Some examples of businesses that may require special licenses include adult book, video, and clothing stores; gaming parlors such as Bingo halls, pool halls, and arcades; businesses that are publicly perceived to foster illicit activities, such as massage parlors or escort services, and others.
No matter the nature of your business, proper licensing will ensure its continued operation. Consider the aid of a Sacramento business licensing lawyer to ensure that you fulfill this critical need.