The greater Sacramento area has become a hotbed for new businesses in the last few years. Everything from small “mom and pop” shops to blue-chip tech companies has opened or relocated here. If you are considering starting or relocating a business here, there are a few essential things to know beforehand.
First and foremost, you’ll need to figure out if you’ll be required to apply for a business license. Not everyone needs a Sacramento business license. Whether or not you’ll need to get one will depend on which area you plan on opening and/or operating in.
These three jurisdictions have different business license requirements:
- City of Sacramento
- Unincorporated Sacramento County
- West Sacramento
Depending on where your business is located, there will be different license requirements.
City of Sacramento Business License
The City of Sacramento does not require you to get a business license to open and run a business. However, the city does require that you pay a business operation tax (BOT).
You’ll need to apply for a Business Operation Tax Account. The form will ask you for some basic information about your business, including:
- The name of your business
- A description of your business’s activities
- Your business address
- The date you started your business
Operating A Home-Based Business in Sacramento
If you plan on operating your business out of your home in the City of Sacramento, you’ll need to apply for a Home Occupation Permit.
There are several requirements for getting a Home Occupation Permit. For example, your business must be the secondary use of your home, not the primary use. This means you can’t rent a house or apartment for the sole purpose of running a business from it.
The type of business you plan to do from home must also be eligible for a Home Occupation Permit. Finally, there are also specific restrictions on what your home-based business can and cannot do. Read all the documentation carefully before applying for the permit.
Sacramento County Business License
If your business is based in an unincorporated part of Sacramento County, you do need to get a license.
The type of business license you’ll need will depend on what kind of business you’re operating and where it is operating. Certain types of businesses may require a county license even if the business is not located in Sacramento County.
The county website offers several resources for those trying to determine what type of license they need. They provide a general overview of different license types here. They also offer a helpful interactive checklist to determine if you need a Sacramento County business license.
Note: Sacramento County does not permit the operation of cannabis dispensaries or related businesses. Licenses to operate these businesses are not available.
The city of West Sacramento (which is different from the City of Sacramento) promotes itself a being very business friendly. They list a simple five-step procedure for how to start a business on their website.
Step four of their process is to apply for a business license. The city does require that:
Every person, firm, corporation, partnership or other business organization occupying real property within the City for business purposes shall obtain a Business License.
To apply for a business license, you’ll need to first register for an account on this page.
Similar to the City of Sacramento, West Sacramento requires cannabis-related businesses to get local approval and a state license before engaging in business activities.
Surrounding Cities And Towns
If you plan to open a business in Rancho Cordova, Folsom or Roseville, each town has different requirements for obtaining a business license.
All businesses operating from a fixed location must obtain a business license in Rancho Cordova. A General Business License costs $103. Some businesses may require a Special Business License, which costs $215 and may include a background check.
Additional information and applications can be found on the City of Rancho Cordova website.
New businesses in Folsom are required to apply for a New Business Certificate. It is functionally the same thing as a business license, just with a different name.
You can read through their frequently asked questions for more information. To get started, you’ll need to create a business profile.
Getting a business license in Roseville is fairly straightforward. Most of the information can be found on their website.
One important note about Roseville business licenses: they are only valid during the calendar year in which they are issued. This is different from other cities where your license will be valid for a year from the date it is issued.
This means, for example, if you started a new business in Roseville in December 2019, you would have to get a business license for both December 2019 and again in January 2020.
El Dorado Hills
Anyone wishing to do business in El Dorado Hills is required to apply for a business license. You can apply for, and renew, a business license online through the county website.
Licenses must be renewed each year. For most businesses, the annual renewal fee is $46.00. For certain businesses such as secondhand dealers, pawnbrokers, fortunetelling, and carnivals, the annual license fee is $140.00, plus a $4.00 state fee.
Always Be Prepared
Starting a new business in any city is a big challenge. Whether your business is on a commercial property or based out of your home, you need to know exactly which requirements your business will be subject to before starting operations.
Because each city has its own rules and regulations for businesses, it’s essential to take your time and be prepared before you start filling out applications.
The good news is that there is plenty of information available online from the official websites for each city. If you have additional questions, you should contact the appropriate city departments or officials before moving forward.
Also, keep in mind that a seller’s permit is different from a business license. A seller’s permit is obtained from the State of California.