Tax Holiday frequently asked questions

The Business License Tax Holiday is a temporary program authorizing the waiver of: (1) prior year taxes, penalties, and interest due for unlicensed businesses; (2) unpaid current year penalties and interest assessed upon licensed businesses who owe current year business license taxes; and (3) penalties and interest assessable on underreported or misfiled taxes by licensed business who are currently not in compliance with the City’s business license tax. The aim of the Tax Holiday Program is to encourage all businesses including, but not limited to: all commercially-based businesses, home-based businesses, commercial and residential landlords, and independent contractors, including self-employed free-lancers & gig entrepreneurs, who have not yet obtained their required business license(s), or who owe unpaid, underreported, or misfiled taxes to come forward and fully comply with the City’s business license tax requirements.

Santa Ana Municipal Code Section 21-3 defines business as including “all activities engaged in or caused to be engaged in within the city, including any commercial or industrial enterprise, trade, profession, occupation, vocation, calling, or livelihood, including rental of residential or commercial real estate, and every other kind of activity whether or not carried on for gain or profit, and whether or not engaged in as a principal or as an independent contractor, but shall not include the services rendered by an employee to his employer.”

State law (Business & Professions Code Section 16300) requires cities to use the way a taxpayer reported income to the Internal Revenue Service (IRS) and State Franchise Tax Board (FTB) to determine whether the taxpayer performed services as an employee or as a separate business entity.

Yes, individuals that work as an independent contractor and are reported on a 1099 Form instead of a W-2 need to have a City of Santa Ana Business License.

Yes, if you operate a business from commercial premises within the City of Santa Ana you are required to secure a business license. Every business, including a temporary or itinerant business, operating from commercial premises within the City, is required to obtain a one-time Certificate of Occupancy ($134.24 for premises less than 5,000 sq. ft. in area | $499.36 for premises of 5,000 sq. ft. or more in area) for their commercial location and comply with all applicable provisions of the City of Santa Ana Municipal Code relating to Zoning and Building & Fire Safety. Businesses may apply and pay for their Certificate of Occupancy Inspections at the City of Santa Ana Planning Counter. For information on Certificate of Occupancy requirements, please contact the Planning Agency at (714) 647-5804 (Planning & Building Agency). A separate business license is required for each separate type of business conducted at the same location, and for each separate branch or business property location. A separate Certificate of Occupancy is required for each separate branch location.

Yes, if you operate a business from residential premises within the City of Santa Ana you are required to secure a business license. Prior to the issuance of a business license, businesses operating from residential premises within the City, are required to obtain a one-time Home Occupation Permit ($50.32) and comply with all applicable provisions of the City of Santa Ana Municipal Code relating to home-based businesses. Home-based businesses must receive an approved Home Occupation Permit before they apply and pay for their Business License. The Planning Agency approves these permits. For information on obtaining a Home Occupation Permit, please contact the Planning Agency at (714) 647-5804 (Planning & Building Agency). A separate business license is required for each separate type of business operating at the same residential location.

Yes, businesses both large and small are required to obtain a Santa Ana Business License to be in compliance with the Santa Ana Municipal Code. If the consulting work or other independent contractor work is done from a location within the City limits, such as your residence, you are required to obtain a City of Santa Ana Business License. (Note: hobbyists and part-time businesses making less than $5,000 per year may apply for payment of a reduced gratuitous license fee.)

Yes, engaging in business in association with, or performing services for, or in the name of a licensed Santa Ana business or nonprofit organization, or government agency does not relive separate business entities, independent contractors, consultants or other self-employed individuals from the requirement to obtain a separate independent City of Santa Ana Business License.

As long as your business location is located outside of the city and your business has no physical presence in the city, and all business activities are conducted outside the City of Santa Ana, there is no need to obtain a Santa Ana Business License. However, if you are conducting business based from your Santa Ana home residence, or if your Santa Ana home residence is your business location, or if you store business equipment, good or wares within the city you will need to obtain a Santa Ana Business License. If you repeatedly park, service, replenish or maintain any delivery vehicle, catering truck, junk collection vehicle, pushcart or wagon within the city, whether or not on the premises of another, when done in connection with the permanent painting or inscribing or affixing of said Santa Ana address on the surface of said pushcart, vehicle or wagon, you will need to obtain a City of Santa Ana Business License.

Yes, regularly operating delivery vehicles, catering trucks, produce trucks, junk collection vehicles, pushcarts or wagons within the city will require a Santa Ana business license. A separate City of Santa Ana Business License must be obtained for each separate type of vehicle operated within the city.

Yes, if you are a Transportation Network Company Driver based out of the City of Santa Ana receiving a 1099 Form, you must obtain a flat rate City Santa Ana Business License as an independent contractor. Note: once licensed in your home-based city you are not required to obtain a business license in the other California cities in which you operate.

Yes, if your business is registered as “active” with the California Secretary of State and is reporting on a business return to the FTB and IRS from a Santa Ana location, it will need a business license. Maintaining a business entity within the City, whether it is transacting public business or not, is considered operating a business under the municipal code and a City of Santa Ana Business License is required. Holding companies or pass-through entities registered as business entities with the California Secretary of State pursuant to the California Corporations Code that do not directly generate gross receipts within the city, but otherwise transact and carry on business within the city through a principal business office located in the city, may apply for payment of a reduced (minimum) business license tax.

Yes, if you operate a commercially-based or home-based nonprofit business, organization, or institution, you are required to secure a “Non-Profit” Business License. Information supporting qualification of your business as a “non-profit” must be furnished. No business license tax (other than an administrative application processing charge) shall be applied with respect to any bona fide nonprofit business.

No business license tax or other administrative fee is required for the operation of a commercially-based or home-based business specifically exempted by State or Federal Law. Supporting qualifying information establishing your business as specifically exempted must be furnished. A “Fee-Exempt” administrative business license shall be issued to qualifying exempted businesses.

U.S. Postal Service Post Office Box or a private postal mailbox (PMB) address may be used as the mailing address of record for receiving information regarding a Santa Ana business license; however, a Post Office Box or PMB address does not constitute a business location for business licensing purposes. A Post Office Box or PMB address cannot be substituted as the business location address for any business, whether physically located within the City of Santa Ana or physically located outside of the City of Santa Ana.

Yes, if you are a landlord and rent, lease, sublease or sublet commercial or residential property within the City, you are required to secure the appropriate business license, and a separate business license must be obtained for each separate rental property.

Municipal Code Section 21-3 defines the business of rental of residential real estate as including every person who engages in the business of leasing, renting, subleasing, subletting, providing, exchanging or trading without loss of ownership or leasehold any residential property within the City for purposes of general residency.

The business license tax for the rental of residential real estate is assessed per property, based on the ownership of the property. A separate business license is required for each separate rental property location. The business license tax assessment is made on a per unit basis and reflects the maximum number of rentable units making up the property.

Renting to immediate family members related by blood, adoption or marriage is considered to be a business and a license is required. If you are renting only to immediate family members (mothers and fathers, grandmothers and grandfathers, sons and daughters, grandsons and granddaughters, brothers and sisters, and husbands and wives) and the amount you receive is not more than the cost of maintaining legal ownership of the premises you may qualify for a “fee-exempt” license. These costs include: mortgage costs, title and homeowner property insurance premiums, property taxes, homeowner or condominium association costs; other costs or expenses arising from contractual obligations relating to maintaining ownership or leasehold interest in the premises; and the cost of utilities, maintenance or other related services for which the owner (or leaseholder) is legally responsible.