Taxes, Permits & Licenses

Forms for doing business in Carmel-by-the-Sea can be downloaded from the Business Services page of the Online Services section of this website.

Q: Will I need a Business License?
A: According to the Carmel-by-the-Sea Municipal Code:

5.04.020 License Required
It is unlawful for any person, whether as principal or agent, clerk or employee, either for himself or for any other person, or for any body, corporation, or otherwise, to commence or carry on any kind of lawful business, trade, calling, profession or occupation within the City without having first applied for and procured a license from the City to do so or without complying with any and all regulations of such business, trade, calling, profession or occupation contained in this title. (Ord. 96-12 § 1, 1996).

See Carmel-by-the-Sea Municipal Code GENERAL LICENSING PROVISIONS for more information, including specific regulations regarding:

5.16 Bingo Games
5.20 Closing-Out Sales
5.24 Garage, Estate and Rummage Sales
5.28 Filming
5.32 Palmistry
5.36 Walking Tours
5.48 Slot Machines
5.52 Solicitors and Peddlers
5.04.070 Separate Licenses.

A separate license must be obtained for each branch, establishment, or separate place of business in which the business is carried on and for each space within a business premises. Businesses with more than one fixed place of business shall obtain separate licenses but may combine their gross receipts and make payment to the City under one license number. (Ord. 96-12 § 1, 1996).

Q: How long does my Business License last? Do I need to renew my Business License?
A: Your Business License is valid for 12 months. Yes, you will be required to renew your Business License annually.

Each year in June, the City sends out renewal notices for the new fiscal year starting in July.

Q: What is the fee for the Business License?
A:
According to the Carmel-by-the-Sea Municipal Code:

5.08.005 Tax Required
Every person commencing or carrying on a business within this City shall pay a license tax in an amount determined in accordance with the nature of the business as hereinafter set forth. (Measure B, 11/7/06 general election).

See “What is a ‘Business Classification’ and how do I determine what mine is?” below.

Q: What is a "Business Classification" and how do I determine what mine is?
A: According to the Carmel-by-the-Sea Municipal Code:

5.08.010 Classifications
For purposes of this title only, all general business classifications with the exception of special events and transportation of persons/goods are subject to a license tax of $1.00 per $1,000 gross receipts per year. Listed below are general business classifications. This does not preclude any business not specifically listed below:

A. Administrative Office. Any business operation where the principal business transacted consists of providing administrative or management-related services such as, but not limited to, record keeping, data processing, research, advertising, public relations, personnel administration and legal and corporate headquarters services to other locations where the operations of the same business are conducted which lead more directly to the production of the gross receipt.

B. Contractors. Any person who is licensed as a contractor by the State of California and who undertakes to or offers to undertake to or purports to have the capacity to undertake to or submits a bid to, or does himself or by or through others, construct, alter, repair, add to, subtract from, improve, move, wreck or demolish any building, highway, road, railroad, excavation or other structure, project, development or improvement, or to do any part thereof, including the erection of scaffolding or other structures or works in connection therewith, is defined as a contractor. The term “contractor” includes subcontractor and specialty contractor.

C. Hotel/Motel. Any person conducting, managing, or carrying on a business involving the operation of a hotel or motel for the purpose of providing temporary lodging to persons visiting the City.

D. Manufacturers. Any person conducting, managing or carrying on a business consisting mainly of manufacturing, packing, or processing any goods, wares, merchandise or produce.

E. Professions. Any person, group, association, partnership, firm or corporation engaged in a profession or vocation licensed by the State, related to a licensed profession or vocation, and/or requiring a period of specialized training such as, but not limited to, physicians, dentists, attorneys, and accountants.

F. Public Utilities. Any person engaged in the business of providing utility services to the general public or private businesses including such services as electric, gas, sanitary and garbage, cable television and telephone.

G. Recreation and Entertainment. Any person engaged in the business of providing directly recreation, entertainment, or amusement services.

H. Rental of Residential Property. Any person engaged in the business of renting or letting a building or structure to a tenant for purposes of dwelling, sleeping or lodging (i.e., apartment, duplex, condominium or other residential property rental) excluding hotels/motels. Minimum rental is 30 days as this is primarily a residential community.

I. Rental of Nonresidential Property. Any person engaged in the business of renting or letting a building or structure to a tenant for purposes of conducting business (i.e., commercial retail space, office buildings, warehouses or other nonresidential property use). (Note: As is the case in other California jurisdictions, those included under this classification are typically owners of the building, or those who are in the business of leasing space for the express purpose of subletting. Space occupied by the owner is typically exempt. Leasing agents and property managers are typically taxed under the services classification.)

J. Food Stores. Any person conducting, managing or carrying on the business consisting mainly of selling at retail food and/or grocery items.

K. Restaurants. Any person conducting, managing or carrying on the business consisting mainly of serving and selling prepared meals, food stuffs and/or beverages.

L. Retail. Any person conducting, managing or carrying on the business of selling at retail any good or merchandise, excluding food.

M. Services. Any business providing services, repairs or improvements to or on real and personal property, renting or leasing personal property to businesses or persons, providing services to businesses such as, but not limited to, bookkeeping and secretarial services, providing services to persons such as, but not limited to, real estate agents and brokers, laundries, cleaning and dyeing, shoe repair, barber and beauty shops, and photographic studios.

N. Wholesale. Any person conducting, managing or carrying on the business consisting mainly of selling at wholesale any goods.

O. Miscellaneous. Any person engaged in a business not specifically taxed by other provisions of this chapter and not otherwise exempt. (Measure B, 11/7/06 general election; Prop. 218, approved by general election 4/98).

5.08.020 Exceptions.
For purposes of this title only, teachers having less than 10 pupils shall not be subject to the tax rate. Teachers having more than 10 students shall pay a business license tax of $1.00 per $1,000 gross receipts. (Measure B, 11/7/06 general election; Prop. 218, approved by general election 4/98).

Q: Is my Business License transferable?
A:
According to the Carmel-by-the-Sea Municipal Code:

5.04.100 Transfer of Licenses – Fixed Places of Business
A. Location. No business license for a fixed place of business within Carmel-by-the-Sea shall be valid except for the exact location including street location, courtyard and space number if applicable, shown on the current business license. In the event of the proposed removal of such licensed business to another location within the City, i.e., street, courtyard, or space, the person, firm or corporation to whom the current business license was issued shall present to the City Administrator or her/his designated agent a statement of such removal, setting forth the location for which the current business license was issued and the proposed location of the business so licensed including street location, courtyard and space number, if applicable. Such statement shall be referred to the Department of Community Planning and Building for approval of use, and, if approved, the City Clerk shall certify that the current business license is valid and in effect and upon issuance of a certificate of occupancy by the Building Official thereafter shall issue a new business license for the proposed location.

In the event a business expands into an adjoining location and the two locations are connected by an inter-connecting door, a transfer of business location license is not required. However, approval of the use is required by the Department of Community Planning and Building.

B. Ownership. No business license shall be transferred, whether by sale or otherwise, to another person or persons under such circumstances that the real or ultimate ownership of the business after the transfer is substantially similar to the real or ultimate ownership existing before the transfer. Such transfer shall be accomplished by the execution of a business license transfer by the holder of the current license and the completion of an application for transfer of business license ownership by the transferee. The application shall be presented to the City Clerk, who shall certify that the current business license is valid and in effect and shall thereafter issue a new business license to the transferee.

C. Business Name Change. Upon change of business name, business owner shall submit a business name change on a form provided by the City. (Ord. 96-12 § 1, 1996).

Q: What is a "NAICS Code" and how do I determine what mine is?
A: Beginning in 1997, the Standard Industrial Classification (SIC) was replaced by the North American Industry Classification System (NAICS - pronounced "nakes").

This six-digit code is a major revision that not only provides for newer industries, but also reorganizes the categories on a production/process-oriented basis. This new, uniform, industry-wide classification system has been designed as the index for statistical reporting of all economic activities of the U.S., Canada, and Mexico. You can find a listing of NAICS codes on the U.S. Census Bureau Website at: http://www.census.gov/epcd/www/naics.html.

To locate your NAICS code on the Census Bureau Website, simply select one of the industry categories near the top of the web page (i.e. Real Estate, Professional etc.), then select the 6 digit code that "best" categorizes the scope of your business operations. If you business operation falls into multiple categories (i.e. Construction, Real Estate), select the NAICS code that represents the majority of your business operations.