In California, the business license most owners mean does not come from the state. The license comes from the city where the business sits, and in some places from the county. Inside most California cities you very likely need that city's license or tax registration, even from home, even as a sole proprietor. The state's part is different: state boards license some trades, and the CDTFA issues the seller's permit to most businesses that sell taxable goods.
This page uses the City of Los Angeles as the worked example, because its rules are written down and most of them surprise people. If your business is in another city, the second-to-last section is for you.
What does California itself issue?
California does not issue a general business license. The Secretary of State registers LLCs and corporations and then points you to your county and city for business licenses, trade names and zoning. The state's permit finder, CalGold, lists the permits that may apply to your kind of business, searched by city or county and business type, with the office that issues each one. CalGold itself issues nothing, so confirm with the office it names.
Two state items get mistaken for a business license. The seller's permit from the CDTFA, the state's sales tax agency, is about sales tax. Most businesses that sell taxable goods outside a registered marketplace need it, whatever their city asks. Trade licenses from state boards, for contractors, cosmetologists and the like, are about the trade. Neither one replaces the city's license.
Who needs one in the City of Los Angeles?
The City says all individuals or entities conducting business activities within the City of Los Angeles "are required to apply for and obtain a Business Tax Registration Certificate", the BTRC. Its front page puts it shorter: from LLC to 1099, meaning every form of business, from a company to one person working alone. How you get paid does not change it. The rule covers a business run from home, a sole proprietor with no entity, and a business based elsewhere that works in the City on seven or more days a year.
A Los Angeles mailing address does not settle whether you are inside the City. Hollywood, Van Nuys and San Pedro are in. West Hollywood, Culver City and Beverly Hills are not. The City's address checker answers it in a minute.
The City's list of businesses that do not need to register includes a business physically in the City six days or fewer a year, notaries public, real estate agents who are not brokers, and people who rent out three or fewer residential units. A 501(c)(3) nonprofit applies to the City for a tax-exempt certificate instead.
What does it cost in Los Angeles?
The BTRC is a tax registration, not a flat fee. The City taxes gross receipts, meaning everything the business took in before expenses, at a rate set by business classification. Two examples from the City's rate table: professions and occupations pay $4.25 per $1,000 of gross receipts, retail sales $1.27 per $1,000. When a taxable business registers, the City asks for the minimum tax with the application.
Most one-person businesses qualify for the Small Business Exemption. If your worldwide gross receipts for the year, taxable and not, are $100,000 or less, you owe no City business tax for that year, on three conditions the City states: you are registered, you file the renewal on time, and you check the Small Business Exemption box on it. The exemption is provided only for registered businesses, and a late renewal does not qualify. Creative artists have their own, higher line: $300,000 or less from creative work, again only with a timely renewal.
If you are over the line, the first renewal bills two years at once. The first year of business is taxed, but paid in the second year, and the City measures both years by the first year's receipts. The New Business Exemption that older pages mention is no longer available, effective January 1, 2018.
When are the City of Los Angeles dates?
| What | When |
|---|---|
| Register with the City | when you start; the City asks for your start date and issues a temporary certificate, with the permanent one mailed within 4 to 6 weeks |
| Renew the BTRC | by the last day of February every year, even in a year with no revenue |
| Claim the Small Business Exemption | on each year's renewal, filed on time |
| First year's tax, if you owe one | with the first renewal, in the February after your first calendar year |
When the last day of February falls on a weekend, the City announces the date it will accept; check its key dates page. Dates checked in October 2026.
If you are already behind
A letter from the City means the City has a date you did not have. The letter does not mean you did something wrong. The steps, in order: check that your address is inside the City; register, or file the renewal you missed; then look at what is owed.
Two City programs matter here. The Voluntary Disclosure Program is for a business that never registered and has not yet been contacted by the City. It limits how far back the City looks to five years instead of eight, and lets the City waive delinquency penalties. The Penalty Waiver Request is for penalties on a late renewal; whether it is granted is the City's decision. The Small Business Exemption covers registered years only, so unregistered years under $100,000 can still be taxed.
What if my business is not in the City of Los Angeles?
Your own city's rules apply. The City of Los Angeles rules apply too if you work inside the City seven or more days a year. Most California cities set their own license or tax, fee and date; a few use their county's instead. CalGold is the place to start, then the office it names.
In Los Angeles County, the County's business license covers the unincorporated area and the cities of Malibu, Santa Clarita and Westlake Village. It applies only to about 110 regulated activities that the County says may affect public health, welfare or safety. The County license is a fee to cover the County's costs, not a tax on receipts. If your activity is not on that list, the County says you do not need its license. Other counties set their own rules.
Why this one is easy to miss
The City of Los Angeles does not call it a license. The City calls it a Business Tax Registration Certificate, so an owner looking for a "license" can pass right by it. For a business under the exemption, nothing is billed, so the first February comes and goes with nothing to prompt it. And a seller's permit in hand feels like a license, when it is a different registration from a different agency.
The city license is one item on the small business compliance list. Two items often sit beside it: the seller's permit, for most businesses that sell taxable goods, and, for an LLC, the $800 annual tax and its dates.
Where Khanna's comes in
If you want help reviewing your small business compliance, email us at daksh@khannasllc.com with your business and your city.
Common questions
I work from home in Los Angeles. Do I need it? Yes, if your home is inside the City of Los Angeles. The City's rule covers any business activity inside its limits, home or not. Check the address first; many addresses that say Los Angeles are in other cities or in unincorporated county. A home business also follows zoning rules, which are separate.
I am a sole proprietor with no LLC. Does it still apply? Yes, in the City of Los Angeles. The City's own phrase is from LLC to 1099. A sole proprietor can register with a Social Security number or an EIN, the business tax number from the IRS.
I sell at markets and pop-ups in different cities. Whose license? Start with the city your business is based in. A city where you sell may want its own. In the City of Los Angeles, a business from elsewhere registers once it works in the City seven or more days a year. Other cities set their own rules; ask the organizer what they check for.
Is my seller's permit my business license? No. The seller's permit is the state's sales tax registration, from the CDTFA. The business license comes from your city, or in some places your county. Many sellers need both.
What does the Los Angeles certificate cost? The City taxes gross receipts rather than charging a set fee, and a taxable business pays the minimum tax when it registers. If you are registered, your worldwide gross receipts are $100,000 or less, and you renew on time, the yearly City tax is zero. Other cities set their own fees.
General information for California owners as of October 2026, with the City of Los Angeles as the worked example. Khanna's is not a law firm or an accounting firm, and this is not legal or tax advice. The main rules above link to the City, County and state pages that state them. For your own situation, check with the City's Office of Finance or your own city's business tax office, and CalGold, or ask a lawyer or a CPA.