▼

Minimum Wage - Business Tax Related

Show All Answers

1. What is the San Jose Business Tax?

The San Jose Business License Tax, Business Tax or License Tax is an annual obligation of businesses engaging in business in San Jose

2. Which employers are subject to the San Jose Business Tax?

All persons or companies conducting business in the City of San Jose are required to pay the Business Tax. Included are: commercial landlords; residential landlords (renting three (3) or more units); retail outlets; wholesalers; manufacturers; service companies; self-employed professionals; independent contractors; and home-based businesses. The San Jose Business Tax applies to home-based businesses and part-time operations.

3. Does an employer whose business in not physically located in San Jose but conducts business in San Jose subject to the San Jose Business Tax?

Yes, but an employer may be entitled to an apportioned tax rate. The rate is pro-rated in accordance to the number of days you or your employees conduct business activities in San Jose. Any employer who is required to pay the San Jose business license tax is required to pay the minimum wage under the ordinance.

4. What is considered a business?

Under San Jose Municipal Code Section 4.76.050, a business includes 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 or lease of residential or nonresidential real estate and mobile home parks or independent contractors whether or not carried on for gain or profit but shall not include the services rendered by an employee to his employer.

5. What is an employee?

Under San Jose Municipal Code Section 4.76.060, an employee includes each and every person engaged in the operation or conduct of any business whether as owner, member of owner’s family, partner, associate, agent, manager or solicitor, and each and every person employed or working in such business for a wage, salary, commission, or room and board.

6. What does “engaged in business” mean?

Under San Jose Municipal Code Section 4.76.070, engaged in business means the commencing, conducting, operating, managing or carrying on of a business and the exercise of corporate or franchise powers whether done as an owner or be means of an officer, agent, manager, employee, servant or otherwise whether operating from a fixed location in the City or coming into the City from an outside location to engage in such activities.

7. What does “evidence of doing business” mean?

Under San Jose Municipal Code Section 4.76.075, whenever any person shall by use of signs, circulars, cards or any other advertising media including the use of telephone solicitation, hold herself/himself out as or represent that she/he is doing business in the City then these facts may be used as evidence that such person in doing business in the City.

8. Are any businesses excluded from the San Jose Business Tax?

Yes. Pursuant to federal law, banks including national banking associations and insurance companies and associations are excluded from the San Jose Business Tax.

9. Can a person engaged in business in San Jose claim exemption from the payment of the San Jose Business Tax?

Yes.

A person can claim exemption from the payment of the San Jose Business Tax for the following common exemptions: honorable discharged disabled veteran; non-profit/charitable organization; farmers/poultry/horticulturist; interstate commerce (motor carrier permit); minor (16 years of age or younger); sale of hand-produced goods; senior citizen (65+ years of age); teachers; transient marketers at the Flea Market; family day care and family caregiver. For a complete listing of exemptions, please refer to Title 4, Revenue, Finance and Business Taxes of San Jose Municipal Code. To apply for an exemption, complete the Business Tax Exemption Request form.

Additionally, a Business Tax Hardship Exemption Program is available to sole proprietorships and corporations that are owned by one person, husband/wife or domestic partner ownership structures that have: no employees and annual gross receipts at or below less than twice the poverty level which changes year to year. The term “poverty level” means the income amount established by the US Department of Health and Human Services as the poverty guideline for a single person multiplied by two (2) for the calendar year in the business tax is due.

The form can be downloaded here.