Palm Springs California downtown commercial district showing the desert resort city where tourism businesses thrive

How to Start a Business in Palm Springs, California

Why Palm Springs for Your Business

Palm Springs has a population of about 48,000 in Riverside County, but the real market is the entire Coachella Valley — more than 400,000 people. This is a tourism economy, and that’s a strength, not a limitation. One in four jobs in the Greater Palm Springs region is supported by tourism.

The event calendar creates predictable demand spikes that you can plan around. The Coachella Valley Music and Arts Festival and Stagecoach bring hundreds of thousands of visitors. Modernism Week celebrates the city’s mid-century modern architecture with tours, lectures, and parties. The Palm Springs International Film Festival draws cinephiles and celebrities. Palm Springs Air Museum events pull aviation enthusiasts. Each of these creates a window of concentrated spending.

Palm Springs is one of the most recognized LGBTQ+ travel destinations in the United States. LGBTQ+-owned businesses thrive here, and the inclusive tourism brand attracts visitors specifically because of it. If your business concept aligns with this market, Palm Springs gives you a built-in audience that many cities don’t offer.

The desert resort economy creates demand in hospitality, wellness and spa services, restaurants, retail, property management, and vacation rentals. New hotel development signals continued investment confidence — the Drift Hotel opened in 2024, Thompson Palm Springs (Hyatt) is operating, and the Dream Hotel with 156 rooms is in development.

Seasonal population swings shape the business year. The winter “snowbird” season from October through April brings a surge of consumers — retirees and seasonal residents from colder climates who spend months in the desert. Businesses that depend on foot traffic and consumer spending will see a clear difference between season and off-season.

The mid-century modern architecture that defines Palm Springs isn’t just aesthetically interesting — it’s a tourism magnet and a branding advantage for design-oriented businesses.

Sales tax in Palm Springs is 9.25%, which includes the 6% state rate, 0.25% Riverside County, 1.5% from the city’s voter-approved Measure J (passed in 2011 to fund city infrastructure and amenities), and 1.5% special districts. Measure J funds go toward maintaining the city infrastructure and amenities that make Palm Springs attractive to visitors — parks, streets, police, fire. Think of it as an investment in the tourism product that drives your customer base.

The seasonal rhythm of Palm Springs creates planning opportunities that businesses in year-round markets don’t have. You know the snowbirds arrive in October and leave in April. You know Coachella and Stagecoach dates are announced months in advance. You know Modernism Week falls in February. Smart businesses in Palm Springs staff up, stock up, and market aggressively during the predictable high-demand windows, and use the quieter summer months for maintenance, training, and planning.

Choose Your Business Structure

Your entity type affects your taxes, liability protection, and administrative requirements in California.

LLC (Limited Liability Company): File online for $70 at bizfileOnline.sos.ca.gov through the California Secretary of State. Processing takes 3-5 business days online, or 3-5 weeks by mail. Expedited processing is available: $350 for 24-hour, $750 for same-day, $500 for 4-hour. LLCs provide personal liability protection — your personal assets are generally shielded from business debts and lawsuits. This is critical in the hospitality industry, where slip-and-fall claims and property damage risks are real.

Sole Proprietorship: No state filing needed unless you’re using a business name other than your legal name. File your DBA (Fictitious Business Name) with the Riverside County Clerk at (760) 863-7490. After filing, publish the DBA in a local newspaper for four consecutive weeks — this is a California requirement. Sole proprietorships are the simplest structure but offer no personal liability protection. Every business debt and lawsuit is your personal responsibility.

Corporation: $100 filing fee with the Secretary of State. Corporations file a Statement of Information for $25, due within 90 days of formation, then annually. California C-corporations pay an 8.84% corporate tax rate.

The $800 franchise tax: Every LLC in California owes an $800 minimum annual franchise tax starting in year one — no first-year exemption since 2024. Seasonal businesses still owe the full $800. California doesn’t prorate the franchise tax based on how many months you operate. If your business only runs from October through April (a common model in Palm Springs), you still pay $800 for the year. LLCs with gross receipts above $250,000 owe additional fees: $900 for $250K-$499K, $2,500 for $500K-$999K, $6,000 for $1M-$4.99M, and $11,790 for $5M and above.

DBA (Fictitious Business Name): If you’re a sole proprietor operating under any name other than your legal name, file with the Riverside County Clerk at (760) 863-7490 and publish the filing in a local newspaper for four consecutive weeks.

Register with the State

Complete your state-level registrations before dealing with Palm Springs city requirements.

California Secretary of State: bizfileOnline.sos.ca.gov for entity filings and Statement of Information ($20 for LLCs, due within 90 days, then every two years).

Franchise Tax Board (FTB): Pay your $800 franchise tax at ftb.ca.gov. Due by the 15th day of the 4th month after formation.

CDTFA: Register for a free seller’s permit at cdtfa.ca.gov if you sell tangible goods. The seller’s permit is required for any business selling or leasing tangible personal property. This includes retail shops, souvenir stores, art galleries selling physical artwork, and any other product-based business. The nearest CDTFA field office serves the Inland Empire and Riverside County.

Sales tax: 9.25% in Palm Springs. This is higher than the statewide base of 7.25% because of Measure J and special district taxes. Factor this into your pricing — customers from neighboring cities with lower rates may notice the difference, though tourists generally don’t comparison-shop on sales tax.

EIN: Free from the IRS at irs.gov/ein. You can get your EIN immediately online — it takes about 10 minutes. You’ll need it for your bank account, tax filings, and hiring.

EDD: Register for California payroll taxes within 20 days of hiring your first employee. California workers’ compensation insurance is mandatory for all employers — even one employee. In a tourism economy with seasonal hiring, be prepared to add and drop employees as your season demands, and keep your EDD filings current throughout.

Business Personal Property: The Riverside County Assessor requires an annual Business Property Statement for businesses with $100,000 or more in fixtures and equipment. Restaurants, hotels, and property management companies commonly hit this threshold.

Get Your Palm Springs Business License

Every business operating within Palm Springs city limits needs a business license. The process is governed by Palm Springs Municipal Code Chapters 3.40 through 3.96, and it follows a specific three-step sequence.

Step 1: Get zoning clearance from the Planning Department. Call (760) 323-8245 and confirm your business type is allowed at your proposed address. Do this before signing a lease. The Planning Department will tell you whether your zone permits your business or whether you need additional approvals. Palm Springs has a mix of commercial, resort-commercial, residential, and mixed-use zones, and the rules about what’s permitted where can be surprisingly specific. A business that’s fine in one commercial zone might be prohibited two blocks away in a different zone designation.

Step 2: Pay your Business License Tax at the Business License Department. Once you have zoning clearance, proceed to the Business License Department. Call (760) 323-8289 for current rates and to start the process. An online portal is available at palmsprings-ca.gov/services/business-license.

The tax structure is based on employee count — a “graduated scale” that puts most businesses between $300 and $900 or more, depending on how many people you employ. Contractors and professional businesses fall on a separate fee scale. Call (760) 323-8289 for current rates specific to your business type.

Out-of-town businesses pay double the minimum fee, or $100 per year where no minimum is prescribed for their category.

You need a separate license for each business you operate and for each branch location.

If your business type isn’t specifically listed in Chapters 3.40 through 3.96 of the Municipal Code, your tax is computed using the general graduated scale based on employee count. Most service businesses, retail shops, and general commercial operations fall on this default scale.

Sign permits: Palm Springs has strong aesthetic standards for commercial signage — the city’s mid-century modern identity shapes what’s allowed. Check sign regulations with the Planning Department before ordering any exterior signage. Non-conforming signs can be denied, and installing one without a permit creates code enforcement issues.

Building permits: If you’re doing tenant improvements to your space (demolishing walls, adding plumbing for a restaurant, modifying electrical), contact the Building Department at (760) 323-8242. Permits are required for most construction work, and inspections are mandatory at key stages.

Step 3: Bring your paid license back to the Planning Department for zoning sign-off. Your license isn’t complete without this final step.

Short-Term Vacation Rentals

Vacation rentals are a major business category in Palm Springs and they’re regulated separately from standard business licenses. If you’re considering renting property to short-term guests, you’re entering a well-defined regulatory process.

Business license first: Apply for and receive your standard Palm Springs Business License through the three-step process above.

Short Term Rental permit: After your business license, obtain a separate Short Term Rental permit from the Community Development Department. This is a distinct application with its own requirements.

Uniform Occupancy Tax (UOT): Once you have both the business license and the STR permit, register for the Uniform Occupancy Tax. This is a transient occupancy tax collected from guests on stays under 30 days.

Quarterly returns: UOT returns are required every quarter, submitted to the Finance Department. This isn’t optional — you’re collecting tax from guests and remitting it to the city.

Exemptions are narrow — certain federal entities and diplomats may qualify. If you believe an exemption applies, submit a UOT Tax Exemption form for review.

Palm Springs actively enforces vacation rental rules. Operating an unpermitted rental is not a gray area — the city issues fines and pursues compliance. Neighbors report unpermitted rentals, and the city follows up. Get all three registrations in place — business license, STR permit, and UOT registration — before listing on Airbnb, Vrbo, or any booking platform.

If you’re considering buying property specifically for vacation rental use, verify that the property’s zoning allows short-term rentals before purchasing. Not all residential zones in Palm Springs permit STR operations, and the rules have changed multiple times as the city balances tourism revenue against neighborhood quality of life.

Key City Departments for New Businesses

Keep these contacts accessible as you work through the startup process:

  • Planning Department: (760) 323-8245 — zoning clearance, sign permits, land use
  • Business License Department: (760) 323-8289 — license tax payment
  • Building Department: (760) 323-8242 — tenant improvements, construction permits
  • Fire Department: (760) 323-8186 — fire code compliance
  • Housing & Community Development: (760) 323-8175
  • IRS (Federal Tax ID): (800) 829-1040
  • Riverside County Clerk (DBA): (760) 863-7490
  • Riverside County Health Department (restaurants): (760) 320-1048
  • ABC (Alcohol & Beverage Control): (760) 568-0990
  • State Board of Equalization (Seller’s Permit): (800) 321-2752

Save these numbers. You’ll need multiple departments during the startup process, and knowing who to call for what saves you from being bounced between offices. The Planning Department is your first stop for anything location-related. The Business License Department handles your tax. The Building Department gets involved if you’re doing any construction. And the ABC office is essential if alcohol is part of your business — their license process runs on its own timeline, often taking several months.

Business Resources

Palm Springs Office of Economic Development: palmspringsca.gov has an opening-a-business guide and site selection information. Start here for official city resources.

Greater Palm Springs Chamber of Commerce: Networking, advocacy, and introductions to the local business community.

Coachella Valley SBDC: Free business consulting — one-on-one advising from experienced counselors who understand the desert resort economy.

Visit Greater Palm Springs: Publishes tourism industry research reports and offers hospitality workforce programs. If your business depends on tourist spending, their data helps you plan.

Inland Empire SCORE: Free mentoring from experienced business owners who’ve built companies in similar markets. If you’re new to running a tourism-dependent business, a SCORE mentor who’s operated in the Coachella Valley can help you plan around the seasonal swings.

Open a Business Bank Account: Bring your EIN letter, Articles of Organization from the California Secretary of State, your Palm Springs Business License, and a photo ID. Multiple banks serve Palm Springs — Chase, Wells Fargo, Bank of America, and local credit unions. Pick one with a branch convenient to your business location, especially if you handle cash.

Palm Springs runs on tourism, and that’s an advantage for businesses that understand seasonal demand patterns. The snowbird season from October through April is your peak. The festival calendar from Coachella to Modernism Week creates additional spending bursts. Your business license tax is based on employee count, your vacation rental needs separate permits and quarterly UOT returns, and California’s $800 franchise tax hits in year one regardless of your revenue. Plan for those costs, get your zoning clearance from Planning at (760) 323-8245 before you commit to a space, and build your business around the predictable rhythms of a desert resort economy.

Here’s a practical startup sequence for Palm Springs: Form your entity with the California Secretary of State ($70 for LLC). Get your EIN from the IRS (free, same day online). Register for a seller’s permit with CDTFA if selling goods (free). Call Palm Springs Planning at (760) 323-8245 for zoning clearance. Pay your Business License Tax at (760) 323-8289. Complete the zoning sign-off by bringing your paid license back to Planning. If you’re doing vacation rentals, add the STR permit from Community Development and UOT registration with Finance. Open your business bank account. Register with EDD if you’re hiring.

The $800 state franchise tax, the employee-based city license tax, and the 9.25% sales tax are your non-negotiable costs. But in a market where 1 in 4 jobs is tourism-supported and the winter season brings a predictable surge of affluent snowbird consumers, the economics of a well-planned Palm Springs business work in your favor.