Sacramento Business License: Business Operations Tax Registration Guide

October 29, 2026

Searches for a Sacramento business license in California usually end in confusion, because the City of Sacramento says it does not issue a general business license. What it requires instead is a Business Operations Tax (BOT) certificate from the Revenue Division of the Finance Department. The requirement applies to every business that operates in the city or does business with the city. This guide explains how the BOT works, how a home-based business fits in, how the city differs from Sacramento County, and which state registrations sit alongside the local paperwork.

Disclaimer: This is informational content, not legal or tax advice. Fees, rates and rules change, and the city adjusts the BOT each year. Confirm current details with the agency named here, and consult a qualified attorney or CPA before you decide on entity structure, tax treatment or anything complex.

The short answer: no general license, but a required BOT certificate

California has no general statewide business license. The Secretary of State issues none, and the CDTFA seller's permit is not a business license. A business in Sacramento typically handles four layers:

1. Registers its entity with the California Secretary of State.
2. Registers with the California Department of Tax and Fee Administration (CDTFA) if it sells taxable goods.
3. Registers with the Employment Development Department (EDD) if it has employees.
4. Obtains the local certificate and any licenses or permits its specific activity requires.

The local certificate in Sacramento is the BOT. Most California cities charge some form of local business tax or registration certificate, and 445 of the state's 483 cities report revenue from one. There is no common formula, because the answer depends on the city. Sacramento's rules are set out in City Code Chapter 3.08.

What the Business Operations Tax requires

City Code Chapter 3.08 requires every business that operates in Sacramento, or does business with the city, to obtain a BOT certificate from the Revenue Division. The tax is paid annually. The certificate is for revenue purposes only. It does not mean your use conforms to city codes, so zoning and other rules still apply separately.

The amount depends on your business class, and the city adjusts it. This guide does not print dollar amounts, because they change. For current figures and the Revenue Division's explanation of each class, call (916) 808-8500 or email [email protected].

BOT business classes

Class	Who it covers	How the tax is measured
Sales and service	Businesses that sell goods or services	Annual gross receipts
Cannabis	Cannabis businesses	4 percent of gross receipts, remitted monthly. A separate cannabis operating permit is also required.
Professionals	Accountants, architects, attorneys, dentists, physicians, veterinarians and others the city lists	Years licensed by the state and number of employees
Brokers	Businesses acting as brokers	A flat rate plus an amount per supervised employee
Commercial rental	Owners of commercial rental property	Gross rent
Residential rental	Owners of four or more residential units	Separate from the Rental Inspection Program
Administrative headquarters	Businesses with administrative headquarters in the city	Gross payroll

The city also accepts exemption applications for some rental and other businesses. If you believe your activity is exempt, ask the Revenue Division to confirm before you skip the certificate.

How to apply for a BOT certificate

You can submit your application online, by email to [email protected], by mail to the Revenue Division at 915 I Street, or in person at the same office. Fees are due with the application. After that:

1. The application goes to Community Development for a zoning check. Your activity must fit the zoning at the address before the certificate is mailed.
2. A temporary certificate valid for 45 days may be issued while the permanent certificate is prepared. The certificate itself is mailed in about two weeks.
3. A $4 state disability access fee is added to your charges.
4. You must renew the certificate every year.

Working from home: the Home Occupation Permit

If you run your business from a residence, the BOT certificate is not enough by itself. You also need a Home Occupation Permit under City Code 17.228.200. The permit carries a one-time fee, and you should confirm the amount with City of Sacramento Planning. Submit it with your BOT application. It stays valid while your BOT certificate is current, so keeping the BOT renewed keeps the permit in effect.

Many people searching for a sacramento home occupation permit ca assume it replaces the BOT. It does not. Treat them as two separate filings that go in together.

Sacramento County vs. the city: which one applies?

Sacramento County is a separate government with its own rules. The county runs a General Business License, but only for unincorporated areas. Those are areas outside the City of Sacramento and six other incorporated cities. A business located inside the city does not need the county license.

The key question is where the business physically operates, not which mailing address or ZIP code you use. Confirm that the location is inside the city limits before you apply for anything.

Question	City of Sacramento	Sacramento County (unincorporated areas)
Local license or certificate	Business Operations Tax certificate	General Business License
Where it applies	Businesses operating in or doing business with the city	Businesses operating in unincorporated county areas
Who issues it	Revenue Division, Finance Department	Sacramento County
Contact	(916) 808-8500, [email protected]	Contact the county directly for current requirements

One filing does not replace the other. A fictitious business name statement is filed with the county clerk-recorder in every case, which for a Sacramento business is Sacramento County. That filing is separate from both local tax programs.

Other local layers in Sacramento

• Business Improvement Area fees: some districts charge an additional assessment. Check whether your address falls inside one.
• Special business permits: certain activities need one on top of the BOT.
• Short-term vacation rentals and transient occupancy tax: handled through the Revenue Division.
• Rental housing: owners of four or more residential units pay under the residential rental class, which is separate from the Rental Inspection Program.

State registrations that go with your city certificate

Entity filing and name rules

Form LLC-1, Articles of Organization, costs $70. Stock corporation articles cost $100, and nonprofit articles cost $30. File through bizfile Online at https://bizfileonline.sos.ca.gov/. The Secretary of State's guidance is at https://www.sos.ca.gov/business-programs. Online LLC filings are normally processed within about 5 business days or less, while paper filings take 10 or more business days. A name reservation costs $10 and lasts 60 days, and it cannot be renewed for consecutive periods.

An LLC name must include “limited liability company,” “L.L.C.” or “LLC.” “Limited” may be shortened to “Ltd.” and “company” to “Co.” The name may not contain “bank,” “trust,” “trustee,” “incorporated,” “inc.,” “corporation” or “corp.” California does not allow a domestic series LLC. An LLC also cannot render a licensed professional service, so professionals use a professional corporation instead.

Every California LLC and corporation must keep an agent for service of process. That agent is either an individual who resides in California or a corporation holding a Corporations Code 1505 certificate. An LLC must also keep an office in California.

The Statement of Information is $20 every two years for an LLC (Form LLC-12) and $25 every year for a corporation (Form SI-550). The LLC's first report is due within 90 days of filing the articles. If the Franchise Tax Board assesses a $250 penalty after a missed filing, that is in addition to the report fee.

Franchise tax

Every LLC, LP and LLP organized or registered in California in 2024 through 2026 owes the $800 minimum annual franchise tax starting in its first year. The first-year exemption covered only LLCs formed in 2021 through 2023. 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 amount with the Franchise Tax Board.

The LLC fee applies once California-source total income reaches the following levels:

• $250,000: $900
• $500,000: $2,500
• $1,000,000: $6,000
• $5,000,000: $11,790

A newly incorporated or qualified corporation or S corporation owes no $800 minimum in its first taxable year.

Fictitious business name

If you operate under a name other than your legal name, file a Fictitious Business Name Statement with the county clerk-recorder in the county of your principal place of business. For a Sacramento business, that is Sacramento County. File within 40 days of starting business. Publish the statement in a newspaper once a week for four weeks. Publication is a separate fee. The statement expires after five years. The statutory filing fee is $10 plus $2 per additional name or owner, but counties charge more, so confirm the local fee. Details are at https://www.sos.ca.gov/business-programs/business-entities/fictitious-business-names.

Sales tax and the seller's permit

If you sell taxable goods, register with the CDTFA at https://www.cdtfa.ca.gov/. The seller's permit is free. The statewide base sales tax rate is 7.25%, and district taxes raise city rates to between 7.25% and 11.75%. Confirm the rate that applies to your address on the CDTFA sales tax page at https://www.cdtfa.ca.gov/taxes-and-fees/sales-use-tax.htm. If you buy goods for resale, the resale certificate has no required form.

Employees, licenses and minimum wage

Register with the EDD when you hire employees. State licensing boards handle regulated trades and professions. The Contractors State License Board licenses contractors once a job reaches the $1,000 threshold, so do not rely on the older $500 figure. Alcohol sales go through the Department of Alcoholic Beverage Control (ABC), and other professions are licensed by Department of Consumer Affairs boards.

Sacramento has no separate local minimum wage ordinance, so the state minimum wage applies. The state rate is $16.90 per hour in 2026 and $17.40 from January 1, 2027. Verify both figures before you set pay.

Your Sacramento checklist

1. Confirm the business address is inside the city limits, not unincorporated county land.
2. Form your entity with the Secretary of State and appoint a qualified agent for service of process. Reserve the name first if needed.
3. Apply for the BOT certificate with the Revenue Division and pay the fees with the application.
4. If you work from home, submit the Home Occupation Permit with the BOT application and confirm the one-time fee with Planning.
5. Register with the CDTFA if you sell taxable goods, and with the EDD if you have employees.
6. Add the state licenses your activity requires, such as a CSLB contractor license, an ABC license or a Department of Consumer Affairs board license.
7. File a fictitious business name statement with the county clerk-recorder within 40 days of starting, and publish it.
8. Calendar your Statement of Information deadlines and your franchise tax payments.
9. Renew the BOT certificate every year.

Where to get help

The California Small Business Development Center network offers small business advising at https://californiasbdc.org/. For the BOT, your first call is the Revenue Division at (916) 808-8500. For zoning and home occupation questions, ask City of Sacramento Planning and Community Development staff. For entity structure, taxes and professional licensing, consult a qualified attorney or CPA. This guide is informational, not legal or tax advice.