Chapter 5.04 — GENERAL PROVISIONS1

A. “Business” shall include 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 the 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 or her employer.

B. “Employee” shall mean all individuals who are engaged in the operation or conduct of any
business and whose consideration for services rendered is in the form of a regular salary or
wage.

C. “Employer” shall mean a person that employs one or more employees.

D. “Gross receipts” shall mean the total amounts actually received or receivable from sales
and the total amounts actually received or receivable for the performance of any act or
service, of whatever nature it may be, for which a charge is made or credit allowed, whether
or not such act or service is done as a part of or in connection with the sale of materials,
goods, wares or merchandise. Included in "gross receipts" shall be all receipts, cash, credits,
and property of any kind or nature without any deduction therefrom on account of the cost
of the property sold, the cost of materials used, labor or service cost, interest paid or
payable, or losses or other expenses whatsoever. Excluded from "gross receipts" shall be
the following:

1. Cash discounts allowed or taken on sales.

2. Credit allowed on property accepted as part of the purchase price and which property
may later be sold, at which time the sales price shall be included as "gross receipts."

3. Any tax required by law to be included in or added to the purchase price and collected
from the consumer or purchaser.

4. Such part of the sale price of property returned by purchasers upon rescission of a
contract of sale as is refunded either in cash or by credit.

5. Receipts of refundable deposits, except that such deposits when forfeited and taken
into income of the business shall not be excluded.

6. Amounts collected for others where the business is acting as an agent or trustee to
the extent that such amounts are paid to those for whom collected, provided the agent
or trustee has furnished the Administrative Services Director with the names and
addresses of the others and the amounts paid to them. This exclusion shall not apply
to any fees, percentages, or other payments retained by the agent or trustee.

7. Cash value of sales, trades or transactions between departments or units of the same

1. Taxicabs, ambulances and vehicles for hire—See Chapters 5.12, 5.14 and 5.17.Pawnbrokers, secondhand and junk dealers—See Chapter 5.20.Entertainment establishments—See Chapter 5.28.Cafe dances—See Chapter 5.32.Prior ordinance history: Ord. 1368 as amended by Ords. 1375, 1417, 1423, 1455 and 1630, and Ord. 1374.

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City of Newport Beach, CA § 5.04.010 BUSINESS LICENSES AND REGULATIONS § 5.04.020

business.

8. Transactions between a partnership and its partners.

9. Receipts from services or sales in transactions between affiliated corporations. An
affiliated corporation is a corporation:

a. Devoting a nonvoting stock of which is owned at least 80% by such other
corporation with which such transaction is had; or

b. Which owns at least 80% of the voting and nonvoting stock of such other
corporation; or

c. At least 80% of the voting and nonvoting stock of which is owned by a common
parent corporation which also has such ownership of the corporation with which
transaction is had.

10. Receipts from investments where the holder of the investment receives only interest
and/or dividends.

11. Receipts derived from the occasional sale of used, obsolete or surplus trade fixtures,
machinery or other equipment used by the licensee in the regular course of the
licensee's business.

E. “Operate” shall mean and include manage, control or carry on.

F. “Rental unit” shall mean and include all residential units except one which is the part-time
or full-time residence of the owner, and no part thereof is offered or available for rent at
any time during the license year.

G. “Sale” shall include the transfer, in any manner or by any means whatsoever, of title to
property for a consideration; the serving, supplying or furnishing for a consideration of any
property; and a transaction whereby the possession of property is transferred and the seller
retains the title as security for the payment of the price shall likewise be deemed a sale. The
foregoing definition shall not be deemed to exclude any transaction which is or which, in
effect, results in a sale within the contemplation of law.

H. “Sworn statement” shall mean an affidavit sworn to before a person authorized to take
oaths, or a declaration or certification made under penalty of perjury.
(Ord. 1757 § 1 (part), 1977; Ord. 2015-6 § 1 (part), 2015; Ord. 2023-22 § 187, 2023; Ord.
2025-37, 1/13/2026)

No person, either for himself/herself or any other person, shall operate any business specified in this title in the City without first having obtained a license from the City to do so, or without complying with any and all regulations of such business contained in this title. The carrying on of any such business without first having obtained a license from the City to do so, or without complying with any and all regulations of such business contained in this title, shall constitute a separate violation of this title for each and every day that such business is so carried on. Where fingerprinting is required as a condition of obtaining a license to operate any such business, in addition to any other fees imposed pursuant to this title, a fee equal to that currently charged to the City by the State of California will be charged for each person required to be so fingerprinted.

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City of Newport Beach, CA § 5.04.020 NEWPORT BEACH CODE § 5.04.050

(Ord. 1757 § 1 (part), 1977; Ord. 2013-7 § 4, 2013; Ord. 2015-6 § 1 (part), 2015)

In the case of financial, medical or other hardship, the Administrative Services Director may establish a payment plan allowing additional time for repayment of any tax or penalty due. A person's failure to comply with the payment plan may result in all amounts, and any penalties, immediately due and payable to the City.

The City Manager may, in his or her discretion in cases of hardship, waive the tax and/or penalty payment requirements of this chapter. (Ord. 1757 § 1 (part), 1977; Ord. 2015-6 § 1 (part), 2015; Ord. 2025-37, 1/13/2026)

A separate business license must be obtained for each branch establishment or location of the business. A separate business license must be obtained for each separate legal entity and each type of business at the same location. The licensee shall only transact and operate the business at the location or for the legal entity or type of business as designated in the business license. (Ord. 1757 § 1 (part), 1977; Ord. 92-13 § 1, 1992; Ord. 2015-6 § 1 (part), 2015)

When any person shall by use of digital media, signs, circulars, cards, telephone book, newspapers, or other format, advertise, hold out, or represent that he or she is in business in the City, or when any person holds an active license or permit issued by a governmental agency indicating that he or she is in business in the City, and such person fails to deny by a sworn statement given to the Administrative Services Director that he or she is not conducting a business in the City, after being requested to do so by the Administrative Services Director, then these facts shall be considered prima facie evidence that he or she is conducting a business in the City. (Ord. 1757 § 1 (part), 1977; Ord. 2015-6 § 1 (part), 2015; Ord. 2025-37, 1/13/2026)

None of the license taxes provided for by this title shall be so applied as to occasion an undue burden upon interstate commerce or be violative of the equal protection and due process clauses of the Constitutions of the United States and the State of California.

In any case where a license tax is believed by a licensee or applicant for a license to place an undue burden upon interstate commerce or be violative of such constitutional clauses, he or she may apply to the Administrative Services Director for an adjustment of the tax. Such application may be made before, at, or within six months after payment of the prescribed license tax. The applicant shall, by sworn statement and supporting testimony, provide any information as the Administrative Services Director may deem necessary in order to determine the extent, if any, of such undue burden or violation. The Administrative Services Director shall then conduct an investigation, and, after having first obtained the written approval of the City Attorney, shall fix as the license tax for the applicant an amount that is reasonable and nondiscriminatory, or if the license tax has already been paid, shall order a refund of the amount over and above the license tax so fixed. The Administrative Services Director is hereby authorized to adopt such reasonable rules and regulations as may be necessary to guide him or her in determining proper

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City of Newport Beach, CA § 5.04.050 BUSINESS LICENSES AND REGULATIONS § 5.04.080

apportionment of the business license tax hereunder so as to not place an undue burden on interstate commerce or be violative of such constitutional clauses. (Ord. 1757 § 1 (part), 1977; Ord. 2015-6 § 1 (part), 2015; Ord. 2025-37, 1/13/2026)

Nothing in this chapter shall be deemed or construed to apply to any person transacting and carrying on any business exempt by virtue of the Constitution or applicable statutes of the United States or of the State from the payment of such taxes as are herein prescribed.

Any person claiming an exemption pursuant to this section shall file a sworn statement with the Administrative Services Director stating the facts upon which exemptions are claimed, and in the absence of such statement substantiating the claim, such person shall be liable for the payment of the taxes imposed by this title.

The Administrative Services Director shall, upon a proper showing contained in the sworn statement, issue a license to such person claiming exemption under this section without payment to the City of the license tax required by this title.

The Administrative Services Director, after giving notice and a reasonable opportunity for hearing to a licensee, may revoke any license granted pursuant to the provisions of this section upon information that the licensee is not entitled to the exemption as provided herein. The Administrative Services Director's determination shall be final as to the City but subject to judicial review pursuant to California Code of Civil Procedure #st 1094.5. (Ord. 1757 § 1 (part), 1977; Ord. 2015-6 § 1 (part), 2015; Ord. 2023-22 § 188, 2023; Ord. 2025-37, 1/13/2026)

The provisions of this title shall not be deemed or construed to require the payment of a license tax to conduct, manage, or carry on any business, occupation, event, or activity, from any institution or organization which is conducted, managed or carried on for the benefit of religious, charitable, philanthropic, political, or education purposes pursuant to Internal Revenue Code Section 501(c)(3), or any successor statute.

This section shall not be deemed to exempt any such institution or organization from complying with any other provisions of this Code requiring a permit from the City. (Ord. 1757 § 1 (part), 1977; Ord. 90-36 § 1 (part), 1990; Ord. 2015-6 § 1 (part), 2015)

Every honorably discharged soldier, sailor, marine, or airman of the United States, and who is a resident of the State of California, shall have the right to hawk, peddle and vend any goods, wares, or merchandise owned by him or her, except spirituous, malt, vinous or other intoxicating beverages, without the payment of a license fee, subject, however, to the restrictions, limitations, regulations and conditions hereinafter set forth.

A. Every applicant must furnish a certificate of honorable discharge from the United States
Armed Forces.

B. A license when issued under this exemption is nontransferable and for the exclusive use of
the licensee named. Any intentional misuse of the license, by the licensee or by a person

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City of Newport Beach, CA § 5.04.080 NEWPORT BEACH CODE § 5.04.105

authorized by the licensee, may subject the license to immediate cancellation and a one-
year ban on the issuance of a new license to the licensee under this exemption.

C. It shall be unlawful for any person, other than the licensee named, to use any license issued
pursuant to the provisions of this section.

D. No person shall purchase or transfer any license issued pursuant to the provisions of this
section, or transfer or convey the certificates mentioned above, to any other person for the
purpose of securing a license as herein provided for.
(Ord. 1757 § 1 (part), 1977; Ord. 2015-6 § 1 (part), 2015)

Any person under 18 years of age, whose annual gross receipts from any business done within the City are within the earned income threshold pursuant to Internal Revenue Service regulations, shall be exempt from the requirements of this chapter.

Within 30 days of a request by the Administrative Services Director, any person claiming an exemption pursuant to this section shall submit to the Administrative Services Director documents requested by the Administrative Services Director that show the person is a minor and that the annual gross receipts from any business done within the City are within the earned income threshold set forth in the Internal Revenue Service regulations. If the Administrative Services Director determines additional evidence is necessary, the Administrative Services Director shall notify the person seeking the exemption of the date and time of a hearing regarding the exemption. After the hearing, the Administrative Services Director shall make a determination as to whether the exemption applies, and that determination shall be final as to the City but subject to judicial review pursuant to California Code of Civil Procedure § 1094.5. (Ord. 1757 § 1 (part), 1977; Ord. 2015-6 § 1 (part), 2015; Ord. 2023-22 § 189, 2023; Ord. 2025-37, 1/13/2026)

A business license shall not be required of individual artists for the exhibition or display of paintings, sculpture, photographs, handmade jewelry or other fine arts. Any artist shall be exempt from the requirements of this title if the sales of his or her artwork within the City do not result in annual gross receipts in excess of $4,900, automatically adjusted annually to reflect the percentage change in the cost of doing business as measured by the Consumer Price Index and rounded to the nearest dollar.

Within 30 days of a request by the Administrative Services Director, any person claiming an exemption pursuant to this section shall submit to the Administrative Services Director documents requested by the Administrative Services Director that show the person's annual gross receipts from any business done within the City are less than the amount to qualify for the exemption. If the Administrative Services Director determines additional evidence is necessary, the Administrative Services Director shall notify the person seeking the exemption of the date and time of a hearing regarding the exemption. After the hearing, the Administrative Services Director shall make a determination as to whether the exemption applies, and that determination shall be final as to the City but subject to judicial review pursuant to California Code of Civil Procedure § 1094.5. (Ord. 1757 § 1 (part), 1977; Ord. 2015-6 § 1 (part), 2015; Ord. 2023-22 § 190, 2023; Ord. 2025-37, 1/13/2026)

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City of Newport Beach, CA § 5.04.105 BUSINESS LICENSES AND REGULATIONS § 5.04.160

No business license shall be required for the business of renting two or less residential rental units at the same or different locations.

The exemption for residential rent units shall not apply to rental of units for short term lodging purposes and defined in Chapter 5.95, or any successor chapter. However, only one business license shall be required for the business of renting multiple short term lodging units. (Ord. 1757 § 1 (part), 1977; Ord. 92-13 § 2, 1992; Ord. 2015-6 § 1 (part), 2015)

A business license shall not be required for any public utility operating under a franchise granted by the City and paying a franchise tax thereunder, except a business license shall be required for any retail sales or service conducted by such utility in the City of Newport Beach. (Ord. 1757 § 1 (part), 1977; Ord. 2015-6 § 1 (part), 2015)

Persons licensed by the California Department of Real Estate and working under the supervision and control of a broker licensed by the California Department of Real Estate, as required by State law, shall not be subject to taxation under this title if their broker includes the real estate agent as one of its employees and pays the tax in accordance with the provisions of this title and Council resolution. (Ord. 2015-6 § 1 (part), 2015)

This chapter is enacted solely to raise revenue for municipal purposes and is not intended for regulation. (Ord. 1757 § 1 (part), 1977; Ord. 2015-6 § 1 (part), 2015)

Any business that transacts or carries any business activity, contracts, sells or delivers any goods, wares or merchandise in this City for which sales or use tax is payable and is required to report any payment of sales and use tax to the State shall obtain a California State Board of Equalization license and must furnish the sales tax number on the business license application. (Ord. 2015-6 § 1 (part), 2015)

Before any business license is issued to any person, such person shall make an application to the Administrative Services Director. Applicant must state the name of the party to whom the license is to be issued; the nature of the trade or business to be pursued; the place where such business will be conducted and such other information as may be necessary for the enforcement of the provisions of this title.

A business license application may be denied if the Administrative Services Director determines that the applicant failed to complete all portions of the license application or has failed to comply with one or more of the provisions of this chapter. (Ord. 1757 § 1 (part), 1977; Ord. 2015-6 § 1 (part), 2015; Ord. 2025-37, 1/13/2026)

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City of Newport Beach, CA § 5.04.160 NEWPORT BEACH CODE § 5.04.205

Upon application and tender of the required license fee, the Administrative Services Director shall process the application. Applications for new businesses, or as may be deemed necessary by the Administrative Services Director, may be submitted to other departments as necessary, including the Health Officer if health and sanitation may be affected, to determine whether the business and premises to be occupied meet the requirements of applicable law. (1757 § 1 (part), 1977; Ord. 95-29 § 4(2), 1995; Ord. 2015-6 § 1 (part), 2015; Ord. 2025-37, 1/ 13/2026)

Upon processing the application and receipt of the appropriate license fee, the Administrative Services Director shall prepare and issue the license showing upon the face of each license the following:

A. Name of business and location;

B. Business license number;

C. Type of business by code;

D. Date of issuance;

E. Date of expiration; and

F. Term of license.
(Ord. 1757 § 1 (part), 1977; Ord. 2015-6 § 1 (part), 2015; Ord. 2025-37, 1/13/2026)

In no case shall any mistake by any officer or employee of the City in stating the amount of a license tax prevent or prejudice the collection by the City of what should be actually due from any person carrying on a business subject to a business license under the provisions of this title. (Ord. 1757 § 1 (part), 1977; Ord. 2015-6 § 1 (part), 2015)

The payment of any license tax required by this title, its acceptance by the City, and the issuance of such license to any person shall not entitle the holder to carry on any business called for by the license unless the person has complied with all requirements of this Code, or to carry on any business at any location that is illegal under State or Federal law or contrary to the City’s zoning regulations. (Ord. 1757 § 1 (part), 1977; Ord. 2015-6 § 1 (part), 2015; Ord. 2023-22 § 191, 2023)

The Administrative Services Director shall charge a fee as set forth by resolution of the City Council for each duplicate license issued to replace any license issued under the provisions of this title which has been lost or destroyed, upon reasonable proof thereof. (Ord. 1757 § 1 (part), 1977; Ord. 2011-29 § 1, 2011; Ord. 2015-6 § 1 (part), 2015; Ord. 2025-37, 1/13/2026)

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City of Newport Beach, CA § 5.04.205 BUSINESS LICENSES AND REGULATIONS § 5.04.250

Any business which has ceased operating and conducting business in this City shall inform the Administrative Services Director in writing of the date the business has ceased conducting business, and having done such, the license shall be closed and no further license taxes or penalties shall accrue. In the event of any such closure, there shall be no rebate of any portion of the tax or fee paid by such licensee and, in any application for a new license, there shall be no proration of the required tax or fee. (Ord. 2015-6 § 1 (part), 2015; Ord. 2025-37, 1/13/2026)

Each license granted or issued under any provisions of this title shall authorize the licensee to transact or carry on the business therein named, at the place therein designated and at no other place and the license shall not be assignable or transferable. A change of location shall be allowed to the holder of the license upon the payment, set forth by resolution of the City Council, to the Administrative Services Director within 30 days of such change taking place. (Ord. 1757 § 1 (part), 1977; Ord. 2013-19 § 1, 2013; Ord. 2015-6 § 1 (part), 2015; Ord. 2025-37, 1/13/2026)

A. Any licensee transacting and carrying on business at a nonresidential fixed place of business in the City shall keep the license posted in a conspicuous place upon the premises where such business is carried on.

B. Any licensee transacting and carrying on business but not operating at a fixed place of business in the City shall keep the license upon his or her person at all times while transacting and carrying on the business for which it was issued.

C. Whenever identifying stickers, tags, plates or symbols have been issued for each vehicle, device, machine or other piece of equipment included in the measure of a license tax, the person to whom such stickers, tags, plates or symbols have been issued shall keep firmly affixed upon each vehicle, device, machine, or other piece of equipment the identifying sticker, tag, plate or symbol which has been issued therefor at such locations as are designated by the Administrative Services Director. Such sticker, tag, plate or symbol shall not be removed from any vehicle, device, machine, or piece of equipment kept in use, during the period for which the sticker, tag, plate or symbol is issued. (Ord. 1757 § 1 (part), 1977; Ord. 2015-6 § 1 (part), 2015; Ord. 2025-37, 1/13/2026)

A. All business licenses shall be issued on an annual basis. The period covered by each license shall be from the date of issuance to twelve (12) months from such date.

B. The Administrative Services Director is not required to send a notice or a bill to any business subject to the provisions of this chapter and the failure to send or receive such notice or bill shall not affect the validity of any tax or penalty due or the duty of such business to pay the required tax or penalty due. (Ord. 1757 § 1 (part), 1977; Ord. 95-29 § 4(3), 1995; Ord. 2015-6 § 1 (part), 2015; Ord. 2025-37, 1/13/2026)

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City of Newport Beach, CA § 5.04.250 NEWPORT BEACH CODE § 5.04.300

No license for any succeeding, current or unexpired license period shall knowingly be issued to any person who, at the time of making application for any license, is indebted to the City for any unpaid license fee. (Ord. 1757 § 1 (part), 1977; Ord. 2015-6 § 1 (part), 2015)

For failure to pay a license tax when due, unless the Administrative Services Director has provided a payment plan pursuant to § 5.04.025, the Administrative Services Director shall add a penalty of 25% said license tax on the last day of each month after the due date thereof, providing that the amount of such penalty to be added shall in no event exceed 50% of the amount of the license tax due. (Ord. 1757 § 1 (part), 1977; Ord. 2015-6 § 1 (part), 2015; Ord. 2025-37, 1/13/2026)

The amount of any license tax and penalty imposed by the provisions of this title shall be deemed a debt to the City and any person carrying on any business without first having procured a license from the City shall be liable to an action in the name of the City in any court of competent jurisdiction, for the amount of license tax and penalties imposed on such business. (Ord. 1757 § 1 (part), 1977; Ord. 2015-6 § 1 (part), 2015)

The Administrative Services Director may refund any license fee, tax or penalty which he or she determines was erroneously collected, but no license fee, tax or penalty shall be refunded if, prior to his or her application for a license, the applicant has engaged in the business for which the license is sought. (Ord. 1757 § 1 (part), 1977; Ord. 2015-6 § 1 (part), 2015; Ord. 2025-37, 1/13/2026)

A. Enforcement. It shall be the duty of the Administrative Services Director to enforce each and all of the provisions of this title, and the Chief of Police shall render such assistance in its enforcement as may from time to time be required by the Administrative Services Director.

B. Right of Entry. The Administrative Services Director and any police officer or City
employee whose job includes the inspection of the business license shall have the power
and authority to enter, free of charge, and during regular business hours, any place of
business required to be licensed and demand an exhibition of its license certificate. No
person having such license certificate issued in the person's possession or under the
person's control shall willfully fail to exhibit the same on demand.

C. Entry of Personal Residence. A private residence will not be entered without consent or
without a legal court order.
(Ord. 1757 § 1 (part), 1977; Ord. 2015-6 § 1 (part), 2015; Ord. 2023-22 § 192, 2023; Ord.
2025-37, 1/13/2026)

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City of Newport Beach, CA § 5.04.300 BUSINESS LICENSES AND REGULATIONS § 5.04.330

The Administrative Services Director, or any authorized employee, is hereby authorized to examine the books, papers and records of any person subject to this chapter, who has made the election to pay a gross receipts tax, for the purpose of verifying the accuracy of any return made, or, if no return is made, to ascertain the license fees due under this title. Every licensee or supposed licensee is hereby directed and required to furnish to the Administrative Services Director the means, facilities and opportunity for making such examination and investigation as are hereby authorized. The Administrative Services Director is hereby authorized to examine any person, under oath, for the purpose of verifying the accuracy of any return made, or, if no return is made, to ascertain the license fees due under this title, and for this purpose may compel the production of books, papers and records and the attendance of all persons before him or her, whether as parties or witnesses, whenever he or she believes such persons have knowledge of such matters.

The refusal of such examination by any employer or person subject or presumed to be subject to the license fees shall be deemed a violation of this chapter and be subject to administrative citation as provided in Chapter 1.05.

All information obtained by the Administrative Services Director under this section shall be confidential, as provided in § 5.04.310. (Ord. 1757 § 1 (part), 1977; Ord. 2015-6 § 1 (part), 2015; Ord. 2025-37, 1/13/2026)

Any statement or information filed or gathered pursuant to this title shall be deemed to be confidential in character and shall not be subject to public inspection and shall be kept so that the contents thereof shall not become known except to persons charged with the administration of this title. The foregoing prohibition shall not apply to the following information contained in the business license application: business name, business telephone, business address, the exact nature of the business for which the license is required, owner’s name and the name of the principals, if the business is a partnership or corporation. (Ord. 1757 § 1 (part), 1977; Ord. 86-4 § 1, 1986; Ord. 2015-6 § 1 (part), 2015)

In addition to all other power conferred upon him or her, the Administrative Services Director shall have the power, for good cause shown, to extend the time for filing any required sworn statement or application for a period not to exceed 30 days and, in such case, to waive any penalty that would otherwise have accrued. (Ord. 1757 § 1 (part), 1977; Ord. 2015-6 § 1 (part), 2015; Ord. 2025-37, 1/13/2026)

Any person aggrieved by any decision of the Administrative Services Director with respect to the issuance or refusal to issue such license may appeal to the City Manager by filing a notice of appeal with the City Clerk. The City Manager shall thereupon fix a time and place for hearing such appeal. The City Clerk shall give notice to such person of the time and place of the hearing by serving the notice in the manner provided in § 1.08.080. The City Manager shall have authority to determine all questions raised on such appeal. No such determination shall conflict with any substantive provision of this chapter. After the hearing, the City Manager shall make a

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City of Newport Beach, CA § 5.04.330 NEWPORT BEACH CODE § 5.04.330

determination, and that determination shall be final as to the City but subject to judicial review pursuant to California Code of Civil Procedure § 1094.5. (Ord. 1757 § 1 (part), 1977; Ord. 2010-7 § 1, 2010; Ord. 2015-6 § 1 (part), 2015; Ord. 2023-22 § 193, 2023; Ord. 2025-37, 1/13/2026)

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City of Newport Beach, CA § 5.08.005 BUSINESS LICENSES AND REGULATIONS § 5.08.090