Cupertino Municipal Code Ch. 5.04 Business Licenses Generally

The ordinance codified in this chapter may be referred to and cited as the “Business License Tax Ordinance.”

(Ord. 1612, § 1 (part), 1992)

This chapter is enacted pursuant to the authority granted to the City Council under Section 37101 of the California Government Code, to license for revenue, every kind of lawful business, profession or trade in the City. This chapter is enacted solely to raise revenue for municipal purposes and is not intended to license or tax for regulation. Except as provided otherwise in this chapter, any person required to pay a business license tax for transacting and carrying any business under this chapter shall not be relieved from the payment of such business license tax, notwithstanding that such business is not in compliance with zoning, health, safety and other regulations of this code or other regulatory provisions of law. Compliance with the provisions of this chapter shall not constitute evidence that such business is in compliance with any other such regulation or provision of law.

(Ord. 1612, § 1 (part), 1992)

For purposes of this chapter, unless it is plainly evident from the context that different meaning is intended, certain terms and phrases used herein are defined as follows:

A. “Applicant” means a person who is in the process of applying for a business license which is yet to be issued.

B. “Business” includes professions, trades and occupations, and all and every kind of calling whether or not carried on for gain or profit, but shall not include the services rendered by an employee for his employer.

C. “Business license” means the officially signed form issued as evidence of the City’s having granted permission to exercise the privilege of engaging in a particular business, as defined herein, subject to the conditions hereinafter set forth.

D. “Business license tax” means the revenue raised or to be raised from the issuance of a business license pursuant to this chapter. “Business license tax” shall be deemed synonymous with the term “privilege tax,” and shall not supplant any other tax, levy or fee imposed or which may be imposed by the City.

E. “City” means the City of Cupertino, a municipal corporation of the State of California, in its present incorporated form or as in any later reorganized, consolidated, enlarged or reincorporated form.

F. “City Council” means the duly elected members of the City Council of the City of Cupertino.

G. “Collector” means the City Manager, who shall have the power and duties of administering and enforcing this chapter, and shall also mean any and all officers and employees of the City duly designated by the City Manager as his deputies for purposes of administering and enforcing this chapter.

H. “Licensee” means that person who makes application for a business license which is subsequently approved and in whose name the business license is issued.

I. “Person” means any individual, firm, partnership, joint venture, association, social club, fraternal organization, joint stock company, corporation, estate, trust business trust, receiver, trustee, syndicate, or any other group or combination acting as a unit, foreign or domestic.

J. “Sworn statement” means an affidavit sworn to before a person authorized to take oaths, or a declaration or certification made under penalty of perjury.

(Ord. 1612, § 1 (part), 1992)

The various businesses, trades, professions, industries occupations, callings and activities herein provided to be licensed shall be defined in accordance with the meanings and connotations generally given them by those engaged in such activities and as recognized generally by the public.

(Ord. 1612, § 1 (part), 1992)

For the purpose of this chapter, certain words and phrases are defined and certain provisions shall be construed as herein set forth, unless it is apparent from their context that a different meaning is intended. Interpretations, meanings and decisions shall be those of the Collector, subject only to rights of appeal to the City Council as afforded by this chapter.

(Ord. 1612, § 1 (part), 1992)

All powers and duties inherent to a City Council of a general law city rest with the City Council. Such powers and duties include but are not limited to the hearing of appeals from persons aggrieved by any decision of the Collector, the establishment of equitable tax rates for the various businesses and activities, and the amendment of this chapter by due process of law.

(Ord. 1612, § 1 (part), 1992)

There is conferred upon the Collector those powers and duties necessary for the administration of this chapter. In addition, there is also conferred upon the Collector the authority and power to designate such City officers and employees as may be required to carry out the intent and purposes of this chapter, and to promulgate and adopt rules and regulations not inconsistent with the provisions contained herein.

(Ord. 1612, § 1 (part), 1992)

There is imposed upon all businesses conducted within the City, excepting those as may be exempted under Section 5.04.110 of this chapter, a business license tax in an amount hereinafter prescribed. It is unlawful for any person to transact or carry on business within the City without first having procured a business license from the City and paying the tax hereinafter prescribed or without complying with any and all applicable provisions of this chapter. This section shall not be construed to require any person to pay a business license tax prior to doing business within the City if such requirement conflicts with applicable statutes of the United States or of the State of California. No license shall be issued hereunder until all applicable regulations and ordinances of the City have been complied with.

(Ord. 1612, § 1 (part), 1992)

When any person, by the use of signs, circulars, cards, a telephone book, newspapers, radio, television or handouts advertises or represents that s/he is in business in the City, or when any person holds an active license or permit issued by any governmental agency indicating that s/he is in business in the City, or when any person makes a sale, takes an order, renders a commercial service, or performs any other similar act within the City, then these facts shall be considered prima facie evidence that the person is conducting a business in the City.

(Ord. 1612, § 1 (part), 1992)

None of the business license taxes provided for by this chapter shall be applied as to occasion an undue burden upon interstate commerce. In any case where a business license tax is believed by an applicant or licensee to place an undue burden upon such commerce, he may apply to the Collector for an adjustment of the tax so that it shall not be discriminatory or unreasonable as to such commerce. Such application may be made before, at, or within six months after payment of the prescribed tax. The applicant shall, by sworn statement and supporting evidence, show such information as the Collector may deem necessary in order to determine the extent, if any, of such undue burden or violation. The Collector shall conduct an investigation and after having first obtained the written approval of the City Attorney, may fix as the license tax for the applicant or licensee an amount that is reasonable and nondiscriminatory, or, if the tax has already been paid, may order a refund of the amount over and above the prescribed tax. In adjusting the prescribed tax, the Collector shall assess an amount which is uniform with that which is assessed on businesses of like nature, provided that the amount assessed does not exceed the prescribed tax. Any adjustment or determination by the Collector under this section is subject only to rights of appeal to the City Council as afforded by this chapter.

(Ord. 1612, § 1 (part), 1992)

The following persons or activities shall be exempt from business license tax prescribed by this chapter.

A. Any person transacting or carrying on any business which is exempt by virtue of the Constitution or applicable statutes of the United States or of the State of California;

B. Any person who is himself exempt from this chapter by virtue of the Constitution or applicable statutes of the United States or of the State of California;

C. Any public utility making franchise payments to the City;

D. Any person conducting any business, which is carried on wholly for charitable, educational, fraternal, political, recreational or religious purposes and from which profit is not derived directly or indirectly, by any individual, fine or corporation; provided, that nothing in this section shall be deemed to exempt any person from complying with any other provisions of this code or any other ordinance of the City requiring a permit to be issued by the City Council, any commission or officer of the City;

E. Any person whose sole business contact within the City is the sale of goods or services to the City itself,

F. Every natural person whose annual gross receipts from any and all business are one thousand dollars or less. The amount above described shall be modified concurrently with any changes made by the Social Security Administrator regulating allowable earnings not affecting payment of social security retirement benefits.

(Ord. 1612, § 1 (part), 1992)

A. Any person claiming an exemption pursuant to this chapter shall file a sworn statement with the Collector stating the facts upon which exemption is claimed. The Collector shall, upon a proper showing contained in the verified statement, issue a license to such person claiming exemption under this chapter without payment to the City of the business license tax required by this chapter.

B. The Collector, after giving notice and a reasonable opportunity for hearing to a licensee, may revoke any license granted pursuant to the provisions of this chapter upon information that the licensee is not entitled to the exemption as provided herein.

C. The determination of the Collector as to whether a business license should be granted or revoked under this section is subject only to rights of appeal to the City Council as afforded by this chapter.

(Ord. 1612, § 1 (part), 1992)

A separate license must be obtained for each separate type of business at the same location. Each license shall authorize the licensee to transact and carry on only the business licensed thereby at the location or in the manner designated in such license, provided that warehouses and distributing plants used in connection with and incidental to a business licensed under the provisions of this chapter shall not be deemed to be a separate business.

(Ord. 1612, § 1 (part), 1992)

All business licenses issued by the City pursuant to this chapter shall be posted by a licensee with a fixed place of business in a conspicuous place upon the premises where such business is conducted. Any licensee who does not have a fixed place of business shall keep the license upon his person at all times while transacting or carrying on the business for which it was issued.

(Ord. 1612, § 1 (part), 1992)

No business license issued pursuant to this chapter shall be transferable when a license has been issued authorizing a specifically named person to transact or carry on a business at a specific location. The license may, upon application in writing and the payment of a prescribed processing fee, have such license amended to include any change of name, type of business, or address.

(Ord. 1612, § 1 (part), 1992)

The Collector may issue a renewal of a license without requiring the licensee to submit a new application; provided, however, the licensee has paid the tax imposed by this chapter and there has been no change in the conditions upon which the license is based.

(Ord. 1612, § 1 (part), 1992)

A duplicate business license may be issued by the Collector to replace any license previously issued hereunder which has been lost or destroyed upon licensee’s filing a statement of such fact and the payment of a prescribed processing fee.

(Ord. 1612, § 1 (part), 1992)

No statements filed with the Collector shall be conclusive as to the matters set forth therein, nor shall the filing of the same preclude the City from collecting by appropriate action such sum as is actually due and payable hereunder. Such statement and each of the several items therein contained shall be subject to audit and verification by the Collector, who is authorized to examine, audit and inspect such books and records of any licensee or applicant as may be necessary in his judgment to verify or ascertain the amount of license tax or fee due.

(Ord. 1612, § 1 (part), 1992)

A. If any person fails to file any required statement within the time prescribed, or if after demand therefor made by the Collector s/he fails to file a corrected statement, or if any person subject to the tax or fee imposed by this chapter fails to apply for a license, the Collector may determine the amount of license tax due from such person by means of such information as s/he may be able to obtain.

B. If the Collector is not satisfied with the information supplied in statements or applications filed, he may determine the amount of any license tax or fee due by means of any information he may be able to obtain.

C. If such a determination is made, the Collector shall give notice of the amount so assessed by serving it personally or by depositing it in the United States Post Office at Cupertino, California, postage prepaid, addressed to the person so assessed at his/her last known address.

D. Determinations of the Collector under this section are subject only to rights of appeal to the City Council as afforded by this chapter.

(Ord. 1612, § 1 (part), 1992)

Business license taxes shall be due and payable at the time of the commencement of business activity by the licensee. Taxes for renewal of a business license shall be due and payable upon expiration of the prior license. No business license tax shall be refundable by reason of the cessation of business during the license period.

(Ord. 1612, § 1 (part), 1992)

Unless otherwise proscribed in this chapter, a business license shall be issued for a twelve-month period and shall automatically expire at the end of said period.

(Ord. 1612, § 1 (part), 1992)

No refund for an overpayment of taxes imposed by this chapter shall be allowed in whole or in part unless a claim for refund, in writing, is filed with the Collector within a period of six months from the last day of the calendar month following the period for which overpayment was made. Upon the filing of such a claim and when s/he determines that an overpayment has been made, the Collector may refund the amount overpaid.

(Ord. 1612, § 1 (part), 1992)

The amount of any license tax imposed by this chapter shall be deemed a debt to the City. Any person carrying on any business covered in this chapter without having lawfully procured a license from the City to do so shall be liable to the City. The Collector is authorized to cause to be filed a civil action in the name of the City in any court of competent jurisdiction for the amount of the required license tax, together with any penalties thereon and costs of suit.

(Ord. 1612, § 1 (part), 1992)

A. Interest. Any person who fails to pay any tax required to be paid by this chapter shall pay interest at the rate of one percent per month, or fraction thereof, on the amount of the tax, exclusive of penalties, from the date on which the tax first becomes due and payable until paid. Interest shall run during any period of time for which an extension of time has been granted by the City for payment of the tax. Interest required by any of the provisions of this chapter shall be subject to waiver or compromise by the Collector. The interest shall not be compounded, but shall be on principle only.

B. Penalties. All taxes imposed by this chapter shall be subject to the following penalties:

1. Delinquency. Any person who fails to pay any tax, or any fraction thereof required to be paid by this chapter within the time required, shall pay a penalty of twenty percent per month of the amount of unpaid tax. Such penalty shall not exceed one hundred percent of the tax for any calendar year for each year that the tax is unpaid. This penalty shall accrue on the first day of each calendar month for which the tax remains unpaid.

2. Fraud. If the Collector, after notice to the applicant or licensee and hearing, determines that the nonpayment of any tax due under this chapter is due to fraud, a penalty of ninety percent of the amount of the unpaid tax shall be added thereto, in addition to any other penalties set forth in this section. Where after notice and hearing to the applicant or licensee, the Collector determines that a corporate officer, director or shareholder is responsible for the fraud resulting in the nonpayment of the tax of a corporation, the Collector may designate the tax, interest and penalties unpaid, including the penalty provided for in this subsection due to such fraud, as a personal debt of the officer, director or shareholder.

3. Merger of Interest and Penalties. Such interest as is accrued, and every penalty imposed under the provisions of this section, shall become a part of the tax required to be paid under this chapter.

4. Penalties on Principle. All penalties imposed hereunder shall be calculated on principle only, and shall not be compounded.

(Ord. 1612, § 1 (part), 1992)

No statements set forth in any sworn statement required or permitted by this chapter shall be conclusive as to the matters set forth therein, nor shall the filing of the statement preclude the City from collecting by appropriate action such sum as is actually due and payable under this chapter. Such statements and each of the several items therein contained shall be subject to review and verification by the Collector. Information furnished or secured pursuant to such statements which relate to the amount of tax to be assessed against the applicant or licensee shall be confidential and shall not be made available to the public.

(Ord. 1612, § 1 (part), 1992)

The Collector may, for good cause shown, extend the time for filing any sworn statement required or permitted under this chapter for a period not to exceed thirty days, and may waive any penalty that would otherwise have accrued.

(Ord. 1612, § 1 (part), 1992)

Every person engaged in a business not specifically mentioned or classified in this chapter, within the City of Cupertino, shall pay a business license tax in accordance with the following schedule:

A. A basic tax of seventy-five dollars per year;

B. In addition, each such person shall pay a fee as follows:

This amount shall increase annually from 1992 based on the indexing formula in Section 5.04.460 of this code.

For purposes of this section, “floor area” means the total floor space in terms of square footage occupied by an owner, lessee or tenant in a building, less fifteen percent. This adjustment allows for elevator shafts, stairwells, courts or atria (uncovered and open to the sky), and rooms exclusively housing building operating equipment.

(Ord. 1886, (part), 2001; Ord. 1822, (part), 1999; Ord. 1612, § 1 (part), 1992)

Every solicitor, as defined in Chapter 5.20 of this code, shall pay a business license tax of seventy-five dollars. This amount shall increase annually from 1992 based on the indexing formula in Section 5.04.460 of this code.

(Ord. 21-2220, § 1 (part), 2021; Ord. 1886, (part), 2001; Ord. 1612, § 1 (part), 1992)

As used herein, the term “amusement center” means any place to which the public is admitted or invited, where eight or more coin-or token-operated amusement machines are maintained, operated or available for operation. Every person operating an amusement center shall pay a business license tax of one hundred fifty dollars, and five dollars per machine per year. This amount shall increase annually from 1992 based on the indexing formula in Section 5.04.460 of this code.

(Ord. 1886, (part), 2001; Ord. 1612, § 1 (part), 1992)

Every person operating a business where admission, fares, or a fee is charged or made, or a collection or contribution is received (and which are not otherwise provided for in this chapter) for entrance to amusements, such as exhibitions, shows, games, rides, tent performances, ball games, dart games, illusions and other amusements or concessions similar in character to those, or any of those herein before named shall pay a business license tax of seventy-five dollars per day. This amount shall increase annually from 1992 based on the indexing formula in Section 5.04.460 of this code.

(Ord. 1886, (part), 2001; Ord. 1612, § 1 (part), 1992)

A. For purposes of this section, apartment house complex means two or more individual buildings containing dwelling units located upon the same property, or on contiguous property under the same ownership.

B. Every person owning apartment houses, or apartment house complexes, shall pay a business license tax of one hundred dollars per year for up to the first four dwelling units, and seven dollars per year for each additional dwelling unit; provided, however, that the dwelling units used in computing the obligation to pay the business license tax shall be dwelling units rented or leased, and the dwelling units held for rent or lease shall not include a dwelling unit occupied by the owner. This amount shall increase annually from 1992 based on the indexing formula in Section 5.04.460 of this code.

(Ord. 1886, (part), 2001; Ord. 1612, § 1 (part), 1992)

Every person engaged in the business of seasonal lot sales shall pay a business license tax of one hundred fifty dollars per year. This amount shall increase annually from 1992 based on the indexing formula in Section 5.04.460 of this code.

(Ord. 1886, (part), 2001; Ord. 1612, § 1 (part), 1992)

Every person operating a concert, circus or other performance shall pay a business license tax for the first day of one hundred fifty dollars and twenty-five dollars per day thereafter. This amount shall increase annually from 1992 based on the indexing formula in Section 5.04.460 of this code.

(Ord. 1886, (part), 2001; Ord. 1612, § 1 (part), 1992)

Every person owning or operating a business engaged in the sale of lumber, building material, secondhand building material, junkyard, or outdoor yard of similar character, or wholesale or retail nursery, shall pay a business license tax in accordance with the following schedule:

A. A basic tax of seventy-five dollars per year.

B. In addition each person shall pay a fee of five dollars per year per acre of space owned, leased or rented for the purposes set forth above.

C. This amount shall increase annually from 1992 based on the indexing formula in Section 5.04.460 of this code.

(Ord. 1886, (part), 2001; Ord. 1612, § 1 (part), 1992)

Every person engaged in the business of renting, leasing or operating coin-operated vending machines, shall pay a business license tax of seventy-five dollars per year, and five dollars for each machine. This amount shall increase annually from 1992 based on the indexing formula in Section 5.04.460 of this code.

(Ord. 1886, (part), 2001; Ord. 1612, §! (part), 1992)

Every person engaged within the City of Cupertino in the business of contracting as a general building contractor, electrical contractor, plumbing contractor, lathing and plastering contractor, subcontractor, or specialty contractor, as those terms are defined by state law, shall pay a business license tax of seventy-five dollars per year. This amount shall increase annually from 1992 based on the indexing formula in Section 5.04.460 of this code.

(Ord. 1886, (part), 2001; Ord. 1612, § 1 (part), 1992)

Every person engaged in a home occupation, as defined by the zoning ordinance of the City, shall pay a business license tax of seventy-five dollars per year. This amount shall increase annually from 1992 based on the indexing formula in Section 5.04.460 of this code.

(Ord. 1886, (part), 2001; Ord. 1612, § 1 (part), 1992)

Every person engaged in the business of operating a hotel, motel, or lodginghouse, shall pay a business license tax of seventy-five dollars per year, plus five dollars per year for each room. This amount shall increase annually from 1992 based on the indexing formula in Section 5.04.460 of this code.

(Ord. 1886, (part), 2001; Ord. 1612, § 1 (part), 1992)

Every sidewalk vendor within the City, as defined in Chapter 5.48 of this code, shall pay a business license tax of one hundred fifty dollars per year. This amount shall increase annually from 1992 based on the indexing formula in Section 5.04.460 of this code.

(Ord. 21-2220, § 1 (part), 2021; Ord. 1886, (part), 2001; Ord. 1612, § 1 (part), 1992)

Unless otherwise exempted by state or federal law, every person operating a rest, convalescent or guest home, or child care service, shall pay a business license tax of one hundred fifty dollars per year. This amount shall increase annually from 1992 based on the indexing formula in Section 5.04.460 of this code.

(Ord. 1886, (part), 2001; Ord. 1612, § 1 (part), 1992)

Every person operating a private school shall pay a business license tax of one hundred fifty dollars per year. This amount shall increase annually from 1992 based on the indexing formula in Section 5.04.460 of this code.

(Ord. 1886, (part), 2001; Ord. 1612, § 1 (part), 1992)

Every person engaged in the business of providing taxicabs or automobiles for hire shall pay a business license tax of seventy-five dollars, per year for each vehicle operated within the City limits. This amount shall increase annually from 1992 based on the indexing formula in Section 5.04.460 of this code.

(Ord. 1886, (part), 2001; Ord. 1612, § 1 (part), 1992)

Every person engaged in the business of operating a theater, motion picture show, playhouse, event, and all other shows or exhibitions (except those conducted in the open or under canvas) not otherwise provided for in this chapter shall pay a business license tax of one hundred fifty dollars per year plus two dollars per year per seat. This amount shall increase annually from 1992 based on the indexing formula in Section 5.04.460 of this code.

(Ord. 1886, (part), 2001; Ord. 1612, § 1 (part), 1992)

Upon filing of an application for a small-income business license and an affidavit stating, among other things, that the gross dollar volume of contemplated business would be greater than one thousand dollars but less than five thousand dollars; and upon the Collector’s finding and determination that the representations are true and correct, the Collector may order the issuance of a small-income business license that shall be for the current calendar year and shall be issued upon a payment of twenty-five dollars. This amount shall increase annually from 1992 based on the indexing formula in Section 5.04.460 of this code.

(Ord. 1886, (part), 2001; Ord. 1612, § 1 (part), 1992)

Every tax imposed by this chapter shall be automatically increased each year by a percentage which shall be equal to the percentage increase of the consumer price index as shall be reflected in the most recent report of consumer prices for the San Francisco/Bay Area Standard Metropolitan Statistical Area using 1992 as the base year. The annual rate increase shall be calculated by dividing the consumer price index for October of each current year by the base year with the resulting figure representing the percentage increase for the tax due the following January. The formula shall be as follows:

A divided by B times C equals D

A = current year CPI; B = base year CPI;

C = base year tax rate; D = current year tax rate

(Ord. 1801, § 1, 1998: Ord. 1612, § 1 (part), 1992)

A. In any case where a licensee or an applicant for a license believes that his/her individual business is not assigned to the proper classification because of circumstances peculiar to it, as distinguished from other businesses of the same kind, s/he may apply to the Collector for reclassification. Such application shall contain such information as the Collector may deem necessary and require in order to determine whether the applicant’s individual business is properly classified. The Collector shall then conduct an investigation following which s/he shall assign the applicant’s individual business to the classification shown to be proper on the basis of such investigation. The proper classification is that classification which, in the opinion of the Collector, most nearly fits the applicant’s individual business.

B. Any resulting reclassification shall not be retroactive, but shall apply to the time of the next regularly ensuing calculation off the applicant’s tax or fee. No business shall be classified more than once in one year. Any determination by the Collector under this section is subject only to rights of appeal to the City Council as afforded by this chapter.

(Ord. 1612, § 1 (part), 1992)

A. Any person, applicant, or licensee may appeal any decision of the Collector under this chapter to the City Council. Any person so aggrieved may appeal by filing a written notice of appeal with the City Clerk within fourteen calendar days from the date the Collector issues his/her decision in writing.

B. An appeal not filed within such time shall be barred. The appeal shall state the grounds thereof.

C. Upon receipt of an appeal, a date for hearing before City Council shall be set and will be held within thirty days from the date of filing of the appeal unless impracticable, in which case it shall be held at the earliest opportunity.

D. The City Clerk shall give notice to such person who files an appeal of the time and place of hearing by serving it personally or by depositing it in the United States Post Office at Cupertino, California, postage prepaid, addressed to such person at her/his last known address.

E. The City Council shall have authority to determine all questions raised on appeal; provided, however, that no such determination shall conflict with any substantive provision of the chapter.

(Ord. 1612, § 1 (part), 1992; Ord. 26-2284, Att. A (part), 2026)

Neither the adoption of this chapter nor its superseding of any portion of any other ordinance of the City shall in any manner be construed as authorizing the conduct nor continuance of any illegal or unlawful business, or any business in violation of any ordinance of the City.

(Ord. 1612, § 1 (part), 1992)

Any person who violates the provisions of this chapter shall be guilty of an infraction, and upon conviction thereof shall be punished as provided in Chapter 1.12.

(Ord. 1612, § 1 (part), 1992)

All remedies prescribed hereunder shall be cumulative, and the use of one or more remedies by the City shall not bar the use of any other remedy for the purpose of enforcing the provisions hereof.

(Ord. 1612, § 1 (part), 1992)