How to Get a Business License in Palo Alto, California

October 29, 2026

Palo Alto (population about 67,600) has no single "business license" that covers everything. Most businesses here need three things: a state entity filing, a city Business Registry Certificate, and, for businesses that occupy space, the Measure K business tax. This guide walks through each layer with the current fees, the deadlines and the questions you still need to confirm with the city.

Disclaimer: This is informational content, not legal or tax advice. Fees, deadlines and rules change. Confirm every figure with the agency named before you file or pay. If your situation is complex, such as a mix of home and commercial space, multiple owners, or a licensed trade, consult a qualified attorney or CPA.

California Has No Statewide Business License

The California Secretary of State issues no business license or permit. The CDTFA seller's permit is not a business license either. Instead, a Palo Alto business typically does the following:

• Registers its entity (corporation, LLC, partnership or nonprofit) with the California Secretary of State, Business Programs Division.
• Registers with the CDTFA if it sells taxable goods, through the California Department of Tax and Fee Administration.
• Registers with the EDD if it has employees.
• Obtains the city registration and tax that apply to its location, which in Palo Alto means the Business Registry Certificate and, for most businesses with occupied space, the Measure K business tax.
• Adds state licenses for regulated trades and professions, such as contractors or alcohol sellers.

Step 1: Register Your Entity With the Secretary of State

If you form an LLC or corporation, you file with the Secretary of State through bizFile Online. Current fees are:

Filing	Fee	Notes
LLC Articles of Organization (Form LLC-1)	$70	Online filings are normally processed within about 5 business days or less.
LLC expedite options	$350 (24-hour), $750 (same-day, received by 9:30 a.m.), $500 (4-hour, drop-off, precleared)	Expedite fees are paid in addition to the filing fee.
Corporation Articles of Incorporation	$100	A corporation name needs no designator.
Nonprofit Articles	$30	Nonprofit filings are separate from business entities.
LLC name reservation	$10	Lasts 60 days and cannot be renewed for consecutive periods.

Name rules for LLCs: The name must include "limited liability company," "L.L.C." or "LLC" ("Limited" may be shortened to "Ltd." and "company" to "Co."). It may not include "bank," "trust," "trustee," "incorporated," "inc.," "corporation" or "corp." Check availability on the business search before you file.

Ongoing state requirements:

• LLCs file a Statement of Information (Form LLC-12) for $20 within 90 days of filing the articles, then every two years during the six-month window ending on the last day of the anniversary month of formation.
• Corporations file a Statement of Information (Form SI-550) for $25 within 90 days of filing the articles, then every year.
• The Franchise Tax Board assesses a $250 penalty if you miss the Statement of Information after the Secretary of State sends a notice.
• Every California LLC must keep an agent for service of process, either an individual who lives in California or a corporation holding a Corporations Code 1505 certificate. An LLC must also keep a California office, which need not be a place of business activity.

Franchise tax and LLC fee: An LLC organized or registered in 2024 through 2026 owes the $800 minimum annual franchise tax starting in its first year. An LLC whose first taxable year begins in 2027, 2028 or 2029 pays $400 in year one under RTC 17941(g)(2), so confirm that first-year amount with the Franchise Tax Board. The LLC fee applies once California-source total income reaches $250,000 ($900), $500,000 ($2,500), $1,000,000 ($6,000) or $5,000,000 ($11,790). A newly incorporated or qualified corporation or S corporation owes no $800 minimum in its first taxable year.

Two structural limits: California does not allow a domestic series LLC. An LLC also cannot render a licensed professional service, so doctors, lawyers and similar professionals use a professional corporation instead.

Step 2: Get the Palo Alto Business Registry Certificate

The Business Registry Certificate is the city's first layer. It costs $54.00 a year, which includes a $4 state pass-through fee for disability access. The payment portal opens March 1, renewal notices go out in early March, and the payment is due March 31. Do not plan around a December 31 renewal. The certificate expires March 31.

Late payments carry a $25 late fee after April 30 and another $25 after May 30. The city's page states the May 30 date, so confirm that date with the city before relying on it.

New businesses must register within 30 days of starting operations.

Who is exempt from the $54 fee:

• Businesses and nonprofits with fewer than one full-time-equivalent employee, including the owner.
• Religious organizations with no ancillary business on site.
• General or subcontractors with no fixed place of business in Palo Alto.
• Home-based, transitory or virtual businesses.

Exempt businesses still file an annual application, but there is no fee. Filing keeps the exemption on record.

Step 3: Understand the Measure K Business Tax

Measure K is Palo Alto's tax on occupied square footage. Voters approved it in November 2022, and it is codified in Palo Alto Municipal Code chapter 2.37. It is the second layer, and it applies on top of the registry certificate.

Rate and exemptions:

• The full rate is $0.075 per occupied square foot per month for non-exempt businesses.
• From January 2023 through January 2025, the rate was half that amount. The full rate applies now.
• The first 10,000 square feet of every business is exempt.
• Grocery and supermarket stores, seasonal businesses that operate fewer than 90 days, and residential space are exempt.
• Credits are available for hotel tax paid, certain sales tax paid and vacant space.
• The tax is capped at $500,000 per business per year.

The city's page describes how the rate and cap rise over time in two different ways, one tied to CPI and one set at 2.5 percent a year starting with the 2026 to 2027 fiscal year. Ask the city which method applies before you budget for future years.

Worked Example

Suppose your business occupies 12,000 square feet. The first 10,000 are exempt, which leaves 2,000 taxable square feet.

2,000 square feet × $0.075 × 12 months = $1,800 a year

A business of 10,000 square feet or less owes the $54 registry fee and no Measure K tax.

Filing and payment: Returns are quarterly. Each return covers the prior quarter and is due January 1, April 1, July 1 and October 1. A return is delinquent 30 days after its due date. Exempt businesses file annually to keep the exemption on record. The tax runs 35 years, through 2058.

Home businesses: The city's page says home-based businesses are exempt from the registry certificate. It does not say whether a home office owes Measure K. Ask the city directly before assuming either way.

Other notes: The downtown business improvement district assessment is currently paused. The city offers virtual consultations on offsets and exemptions.

Who collects it: HdL administers the Measure K tax for Palo Alto. Contact HdL at [email protected] or (650) 838-2882. Use the city's Business Registry and Tax page to find the current forms and the payment link.

Step 4: Register for Sales Tax and Payroll Taxes

Sales tax. If you sell taxable goods, register with the CDTFA. The state base rate is 7.25 percent, and district taxes apply on top. The Palo Alto rate is 9.75 percent. The seller's permit is free. A resale certificate has no required form. Start at the CDTFA sales and use tax page.

Employees. If you hire employees, register with the Employment Development Department within 15 days of paying more than $100 in wages in a calendar quarter. California's state minimum wage is $16.90 in 2026 and $17.40 starting January 1, 2027. Verify both figures with the EDD and the state labor agency, and check whether Palo Alto sets a higher local minimum wage.

Step 5: Add Licenses for Your Trade

Once you know what you sell or do, check whether your activity needs a state license. Contractors are licensed by the Contractors State License Board, and the threshold for a contractor license is $1,000. Regulated professions and alcohol sales are licensed through state boards and departments, including the Department of Consumer Affairs boards and the Department of Alcoholic Beverage Control. Confirm the requirements with the licensing agency before you take on work.

Fictitious Business Names

If you operate under a name other than your legal name, file a Fictitious Business Name Statement with the county clerk-recorder. Filing must happen within 40 days of starting to do business. The statement must be published in a newspaper once a week for four weeks, and it expires after five years. The statutory fee is $10 plus $2 per additional name or owner under Business and Professions Code 17929, but counties charge more and the newspaper publication fee is separate. Check the current county fee and the publication cost before you file. See the Secretary of State's fictitious business name page for details.

Key Deadlines at a Glance

Requirement	Deadline
Register a new business with the city	Within 30 days of starting operations
Business Registry Certificate ($54)	March 31 each year; late fees after April 30 and May 30
Measure K quarterly returns	January 1, April 1, July 1 and October 1 for the prior quarter
LLC Statement of Information (LLC-12)	Within 90 days of filing, then every two years
Corporation Statement of Information (SI-550)	Within 90 days of filing, then every year
Fictitious business name	File within 40 days of starting; publish once a week for four weeks

Questions to Ask the City Before You Open

• Does a home office owe Measure K tax?
• Which method sets the Measure K rate and cap in future years, CPI or the 2.5 percent annual increase?
• Is the late fee date May 30 or another date?
• Does your specific activity fall under an exemption, such as seasonal operation or the grocery exemption?

HdL can answer most of these, and the city offers virtual consultations on offsets and exemptions.

Where to Get Free Help

The California Small Business Development Center network offers free or low-cost advising on planning, financing and compliance. For the entity choice, a CPA can model the $800 franchise tax, the LLC fee and the Measure K cost together, and an attorney can review your operating agreement or bylaws. Those two conversations can help you plan the combined cost.

Final reminder: This article is informational and is not legal or tax advice. Confirm all fees, deadlines and rules with the Secretary of State, the CDTFA, the Franchise Tax Board, the EDD and the City of Palo Alto before you file or pay.