Business License

Business License – Frequently Asked Questions

We thank you for choosing Cupertino to operate your business. Below are frequently asked questions pertaining to the City’s business license process. If you have any questions regarding the business license process, payments, or renewal requirements, please contact the City’s administrator, HdL, at cupertino@hdlgov.com.

1. Who is required to obtain a business license in Cupertino?

All persons or entities conducting business within the City of Cupertino are required to obtain a business license, unless expressly exempt under Section 5.04.110 of the Cupertino Municipal Code. This includes contractors, home occupations (i.e. home-based businesses), and hotels.

Note: Cupertino Municipal Code § 5.04.110 – Exemptions from Business License Tax. Available at: https://codehub.gridics.com/us/ca/cupertino (navigate to Title 5, Chapter 5.04, Section 5.04.110)

2. What businesses are exempt from the City of Cupertino business license fee?

Any person soliciting on behalf of any religious, charitable, educational, or political organization or to any person who is exempt from the provisions of this chapter by virtue of the Constitution or statutes of the United States of America or of the state. Additionally, any persons operating in accordance with Chapter 5.48, Sidewalk Vendors, provided they do not come within the definition of solicitor. Any persons operating as both a sidewalk vendor and a solicitor must satisfy the requirements for both.

3. What is home occupation (i.e. home-based business)?

Home occupation means a business, profession, occupation or trade activity which is performed by the resident(s) of a dwelling unit within that dwelling unit, or a yard area, accessory structure or garage associated with that dwelling unit, or a yard area, accessory structure or garage associated with that dwelling unit, for purposes of generating income, by means of the manufacture, and/or sale of goods and/or services and/or by short-term rental activity in compliance with Chapter 5.08, but which activity is clearly incidental to the principal use of the dwelling for non-transient residential purposes.

4. Can I conduct a business out of my home?

Home-based businesses are permitted in some zones of the city. The business proposed to be conducted may not change the residential nature of the property or the neighborhood. For example, while a small or large family day care use, where the care provider resides and provides childcare services as an ancillary business, may be allowed, a commercial daycare use, where the business is the sole purpose of the property, may not occur. Please see Chapter 19.120: Home Occupations for details or contact the Community Development Department at 408.777.3308 for information.

Note: Chapter 19.120: Home Occupations: https://codehub.gridics.com/us/ca/cupertino (navigate to Title 19, Chapter 19.120, Section 19.120.010)

5. What is the base business license fee?

Businesses required to obtain a business license subject to an annual base business license fee of $185.00 for the calendar year. This total consists of the following components:

• $181.00 – Standard business license flat fee

• $4.00 – SB 1186 fee, which supports accessibility improvements for persons with disabilities

• Composed of $3.60 (City-imposed tax for accessibility compliance) and $0.40 (State-mandated portion, remitted to the State of California)

Total: $181.00 + $4.00 = $185.00

This applies to most businesses, including home occupation businesses (i.e. home-based businesses).

Note: The SB 1186 fee in California is a $4 state fee that is added to local business license or permit applications and renewals. This fee, which has been in effect since 2018, is intended to fund disability access and compliance with construction-related accessibility requirements, as well as to develop educational resources for businesses.

6. Are home occupation businesses (i.e. home-based businesses) charged differently?

No. Home-based businesses pay the same flat $185.00 annual fee and are not subject to square footage-based assessments.

7. I have a home occupation business (i.e. home-based business) where I sell online. Do I need a business license?

Yes. If your business is run from home, you are considered to be doing business in the city even if sales occur online, and you must obtain a business license unless you qualify for an exemption.

8. How are square footage-based taxes calculated?

Businesses operating in commercial zones are assessed an additional tax based on square footage, using the following rate schedule:

Note: Square footage is self-reported by the applicant and verified when necessary.

9. What happens if I don’t pay my license fee on time?

Failure to pay on time results in a 20% penalty per calendar month the tax remains unpaid, up to a maximum of 100% per year, as outlined in Municipal Code Section 5.04.250. In addition, interest at a rate of 1% per month is charged on the unpaid tax amount (excluding penalties) until the balance is paid in full.

Note: Cupertino Municipal Code § 5.04.250 – Interest and Penalties: A 20% penalty is applied for each calendar month a tax remains unpaid, up to a maximum of 100% per year. Additionally, interest accrues at a rate of 1% per month on the unpaid tax amount, exclusive of penalties. Available at: https://codehub.gridics.com/us/ca/cupertino (Title 5, Chapter 5.04, Section 5.04.250).

10. Will I be notified before my license expires?

Yes. HdL, the City’s contracted administrator, sends three automated renewal reminders via email and one mailed letter within 30 days prior to the license expiration date. Email reminders are sent as a courtesy. Per Section 5.04.090 (Evidence of Doing Business) and Section 5.04.080 (License Required), operating without a valid license is unlawful, and businesses remain liable for the tax and any penalties regardless of receipt of courtesy communications.

Important: It is the business owner’s responsibility to ensure that email addresses and contact information are up to date. If your email has changed, notify the Business License Division at cupertino@hdlgov.com.

11. Where can I find the full fee schedule for specific business types?

Please refer to the Business License Rates for detailed tax rates applicable to different business classifications. Business License Homepage

The rates listed in Business License Rates are effective as of February 1, 2026.

12. What if my business earns less than $5,000 in gross revenue during the calendar year?

Businesses that generate less than $1,000 in gross receipts are exempt from filing per Section 5.04.110 of the Cupertino Municipal Code.

A small-income business license is available to businesses that earn more than $1,000 but less than $5,000 in gross revenue during the calendar year. To qualify, you must submit a license application along with an affidavit stating that your expected business income falls within this range. If the City Collector reviews your application and determines that the information provided is accurate, a small-income business license may be issued for the current calendar year. The license fee is $94.49.