How to Get a Business License in Pasadena, California

You’re starting a business in Pasadena. You’ve already decided on your business structure. Now you need to know exactly what the city requires, where to apply, and what it costs.

The process isn’t complicated, but it is sequential. California doesn’t issue a statewide business license. Pasadena does. And before the city will approve your application, you need documentation from the state. This guide walks through the prerequisite chain and the specific steps at Pasadena City Hall—including the employee-based tax structure that can save you money if you’re starting lean.

What Pasadena Requires vs. What California Requires

Here’s the first thing to understand: California has no statewide business license. None. You won’t find one at the Secretary of State’s office.

Pasadena has its own. The city requires every business operating within its borders to obtain and maintain a Pasadena business license. This is a city tax, administered by the City of Pasadena Finance Department, and it is separate from everything else you’ll owe the state and federal government.

This applies to all business structures—LLC, corporation, sole proprietorship, partnership. It applies whether you operate for-profit or nonprofit. It applies whether you work from home or from a storefront. If you’re doing business in Pasadena, you need a Pasadena business license.

That city license is distinct from three other financial obligations:

The $800 California Franchise Tax. Every LLC doing business in California owes $800 per year to the Franchise Tax Board, regardless of how much money you make. This is state, not city. The first-year exemption under AB 85 expired on December 31, 2023, so even brand-new LLCs owe it. If your LLC’s gross income exceeds $250,000, you pay an additional LLC fee on a sliding scale.

The CDTFA Seller’s Permit. If you’re selling tangible goods, you need to register with the California Department of Tax-Fee Administration. It’s free. This allows you to collect sales tax.

Your Pasadena business license tax. This is what this section is about.

All business license fees must be paid in advance. You do not operate until you’ve paid. The city will not issue your license unless you have proof of payment.

The Prerequisite Chain

Before you walk into Pasadena City Hall or fill out an application, you need documentation. The city will ask for it. You can’t proceed without it.

Here’s the order:

Step 1: Form your business entity at the California Secretary of State.

Go to bizfileOnline.sos.ca.gov. File your Articles of Organization if you’re forming an LLC ($70 filing fee). File your Articles of Incorporation if you’re forming a corporation ($100 filing fee). You’ll receive a filing confirmation email. Keep this. You’ll need the filing number and date for your Pasadena application.

The SOS will also send you a Statement of Information form (LLC-12 or Corp-5), due within 90 days of formation. File it. This is separate from your business license.

Step 2: Get your Employer Identification Number (EIN) from the IRS.

Go to irs.gov/ein. Apply for your EIN online. It’s free. You’ll get it immediately. This is your federal tax ID—you’ll need it for everything from opening a business bank account to hiring employees to filing taxes.

Step 3: Register for a CDTFA Seller’s Permit if you’re selling tangible goods.

Go to cdtfa.ca.gov. Register online. It’s free. You need this before Pasadena will process your application if your business involves selling products. (If you’re a service-only business—consulting, coaching, design, repair services—you may not need this, but confirm with the city.)

Step 4: Pay the $800 California Franchise Tax to the Franchise Tax Board.

This is due by the 15th day of the 4th month after your formation (so if you file on January 1, it’s due by May 15). You can pay online at onlineservices.ftb.ca.gov. You’ll need your EIN and your SOS filing number.

Step 5: Apply for your Pasadena business license.

Only after you have your state filing confirmation, your EIN, and your Seller’s Permit (if applicable) should you submit your Pasadena application. You’ll need copies of these documents.

This order matters. Don’t skip steps or rearrange them. The city verifies your state documentation before issuing your license.

Applying for Your Pasadena Business License

The Business License Office is located at:

100 North Garfield Avenue, Pasadena, CA 91107

If you’re mailing your application:

P.O. Box 7115, Room N106, Pasadena, CA 91109

Phone: (626) 744-4166

You have three options: apply online, mail your application, or apply in person. For in-person applications, walk-in hours vary, so call ahead.

The application is a PDF. Download it from cityofpasadena.net/finance/licenses/business-licenses/. It’s straightforward—business name, owner information, business address, description of business activity, number of employees.

You’ll need to include:

A copy of your California Secretary of State filing confirmation (the filing receipt showing your LLC or corporation formation)
Your EIN letter from the IRS
A copy of your CDTFA Seller’s Permit (if applicable to your business)
Proof of payment of the California Franchise Tax (if already paid; if you’re applying before the due date, you can pay it concurrently)

The city will review your application. Assuming everything checks out, they’ll issue your license. You’ll receive a certificate. Display it at your place of business.

If you’re applying online, the city’s website will walk you through the submission process and payment. If you’re mailing, include a check made out to the City of Pasadena for the business license fee. If you’re applying in person, bring payment (cash, check, or card).

Processing typically takes 1-2 weeks. Call (626) 744-4166 if you haven’t heard back after that.

Understanding Pasadena’s Employee-Based Tax

Most large California cities use a gross-receipts model for their business tax. Pasadena doesn’t. It uses an employee-based model.

Here’s what that means: Your business license tax is calculated based on a flat rate plus the number of employees you have. It’s not based on how much money you make.

This is unusual in California. It’s also unusually advantageous if you’re running a lean operation.

Consider two businesses:

Business A: A consultant with $500,000 in annual revenue and one employee (themselves). In a gross-receipts city like Los Angeles, they’d owe a substantial tax. In Pasadena, they owe the flat rate plus tax for one employee—significantly less.

Business B: A retail store with $250,000 in annual revenue and 12 employees. They owe more in Pasadena because they have more employees, but they’re not penalized for lower revenue.

The employee-based model rewards high-revenue, low-headcount businesses: consultancies, tech firms, professional services, freelancers, agencies, software companies. It’s less favorable for retail or hospitality with high headcount and lower margins.

For new businesses with fewer than 5 employees, Pasadena offers a $1 starter rate. This is designed to attract startups. You pay $1 for your first year if you qualify. This is genuinely rare. Most California cities charge hundreds of dollars minimum, even for startups.

The catch: You need to qualify. The specific rates and eligibility criteria vary by business classification. Some sectors may not be eligible. Some may have restrictions on revenue or previous business history.

Specific rates depend on your business classification (retail, service, food service, professional, contractor, etc.). The city maintains current fee schedules at cityofpasadena.net/finance/general-fund/fees-tax-schedules/. Download the PDF and find your category. Or call (626) 744-4166. They’ll tell you your rate.

Industry-Specific Permits

Your Pasadena business license is your baseline. Depending on what you do, you’ll need additional permits.

Food service businesses require health permits through the Los Angeles County Department of Public Health, not the city. This covers restaurants, catering, food trucks, bakeries, anything involving food preparation or service. You’ll apply separately, and they’ll conduct health inspections.

Alcohol sales require a separate Alcoholic Beverage Control (ABC) license from the state. This is a California Department of Alcoholic Beverage Control license, not a Pasadena city permit. If you’re selling beer, wine, or spirits—whether on-premise (bar) or off-premise (retail)—you need ABC approval. This is a separate, lengthy process with its own requirements and fees.

Home-based businesses may need zoning clearance from the Pasadena Planning Department. If you’re running a business out of your home, the city wants to know it complies with zoning ordinances. Some home businesses are prohibited; others are allowed with conditions. Call the Planning Department at (626) 744-4009 to confirm.

Construction and contractors need a California Contractors State License Board (CSLB) license if the project value exceeds $500. This is a state license, separate from your city business license. If you’re doing construction, remodeling, electrical, plumbing, HVAC, or similar work and the job is over $500, you must be licensed through CSLB. Applications are at cslb.ca.gov.

Renewal and Compliance

Your Pasadena business license is valid for one year from issuance. You must renew it annually.

When you renew, update your employee count. Your tax amount adjusts based on how many people you’re employing. If you started with one employee and hired four more, your renewal fee will reflect that. The city sends renewal notices before expiration, but don’t rely on that—mark your calendar.

Renew online, by mail, or in person at the same address.

Display your license at your place of business. If you have a storefront, it should be visible. If you work from home, keep it accessible in case an inspector asks.

Stay on top of the $800 California Franchise Tax, too. That’s due April 15 each year (after the first year). The Pasadena license and the state tax are separate obligations on separate schedules. Missing either one creates problems.

For business support, resources, and networking, the Pasadena Chamber of Commerce (pasadena-chamber.org) connects you with other local business owners and city resources. They can answer questions specific to Pasadena’s business culture and can point you toward relevant associations for your industry.

The $1 starter rate is a genuine advantage. Most California cities—Long Beach, Santa Monica, Los Angeles proper—charge hundreds of dollars minimum for a new business license. Pasadena’s employee-based model, combined with the $1 rate for small startups, makes it one of the most affordable licenses in the LA metro. But you still have to follow the prerequisite chain. Get your state entity formed, get your EIN, register for your Seller’s Permit if applicable, pay the franchise tax, then apply to the city. The order matters. Once you have all the pieces, the application itself takes minutes.