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1. How much does it cost to open a business in Modesto?

Visit the Business License Fees and Taxes web page for more information.  You may also visit our office located at 1010 10th Street in Modesto on the second floor suite 2100.

2. How do I pay my annual and quarterly Business taxes?

You can pay your business license in person or online using our online portal.  

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3. What attachments do I provide when renewing my business license?

These are the forms that would need to be attached to your business license renewal depending on the type of business.  These forms should be filled out, saved to your device and uploaded to the online renewal portal.  

Subcontractor Adjustment List (PDF)

This form is for General Contractors to adjust the amounts paid to a licensed sub-contractor.  General Contractors must fill this form out and attach it to their renewal to be allowed this adjustment.

Apportionment Worksheet (PDF)

A taxpayer may reduce total receipts from the operation of business or from work performed in the City by a percentage that represents activities that occur outside the city. If you believe this applies to your business please complete this BL-2 Apportionment worksheet.

4. What is the refund policy for business license taxes?

Refunds for overpayment will be processed within four weeks. In the event of a balance on previously unpaid taxes, any refund due will be applied towards this balance. Refunds will be issued in the form of a check.

5. Who do I contact for assistance on applying for coverage under the Stormwater Industrial General Permit?

Region 5 Central Valley Regional Water Board - Sacramento Office

Website: www.waterboards.ca.gov/centralvalley/

Email: jenna.yang@waterboards.ca.gov

Phone: 1-916-464-4764

State Water Board

Website: www.waterboards.ca.gov/waterboards_map.html

Email: stormwater@waterboards.ca.gov

Phone: 1-866-563-3107

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1. Where should I post my business license?

If you have a fixed place of business, the license must be posted in a visible location. If your business is mobile, carry your license with you.

2. I used to have a Modesto business license, how do I reactivate it?

As long as the ownership remains the same, you may reactivate a business license by paying the new license fees and any past due fees and taxes. There must also be a current business license application on file.

3. Do I have to file the Declaration of Gross Receipts forms if I have a minimum license?

Although you do not pay Mill or DID tax, you must report your gross receipts (even if they are zero) to keep your license current and active.

4. Do I have to file even if I did not do any business?

Yes. You must report your gross receipts as zero, sign, date, and return the Declaration of Gross Receipts form, so that your license will remain current and active.

5. How do I calculate Mill tax?

Gross Receipts less the Adjustments (see reverse side of the Declaration of Gross Receipts form) equals the Taxable Gross. Multiply the Taxable Gross times the Mill tax rate. This is the Mill tax due. For example, if the tax rate is .002 and the taxable gross receipts for the quarter are $5000, the fee is calculated as follows:

$5000 X .002 = $10

For a list of allowed Adjustments, see the back of the Declaration of Gross Receipts form or contact the Business Licensing Division. Be sure to write the adjustments on the appropriate lines on the back portion of the form that is returned to the city.

6. Can I deduct expenses?

No. You must report the total amount of money collected, not just your profit. See the back of the Declaration of Gross Receipts form for allowed adjustments.

7. What is DID tax?

Businesses in the downtown area of Modesto pay an additional tax to the Downtown Improvement District (DID). DID tax is calculated in the same manner as Mill tax and paid at the same time.

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1. What if I have a partner?

Each partner is required to complete a Home Business Agreement application for each one of their Modesto addresses.

2. Where should I post my business license?

If you have a fixed place of business, the license must be posted in a visible location. If your business is mobile, carry your license with you.

3. What if I have 2 different types of businesses at a single location?

If all financial records are kept together, then only 1 license is required. If the financial records are kept separately, then multiple licenses are necessary.

4. I used to have a Modesto business license, how do I reactivate it?

As long as the ownership remains the same, you may reactivate a business license by paying the new license fees and any past due fees and taxes. There must also be a current business license application on file.

Show All Answers

1. Where should I post my business license?

If you have a fixed place of business, the license must be posted in a visible location. If your business is mobile, carry your license with you.

2. I used to have a Modesto business license, how do I reactivate it?

As long as the ownership remains the same, you may reactivate a business license by paying the new license fees and any past due fees and taxes. There must also be a current business license application on file.

3. Do I have to file the Declaration of Gross Receipts forms if I have a minimum license?

Although you do not pay Mill or DID tax, you must report your gross receipts (even if they are zero) to keep your license current and active.

4. Do I have to file even if I did not do any business?

Yes. You must report your gross receipts as zero either online or by signing, dating, and returning the Declaration of Gross Receipts form that was mailed to you, so that your license will remain current and active.

5. How do I calculate Mill tax?

Gross Receipts less the Adjustments (see reverse side of the Declaration of Gross Receipts form) equals the Taxable Gross. Multiply the Taxable Gross times the Mill tax rate. This is the Mill tax due. For example, if the tax rate is .002 and the taxable gross receipts for the quarter are $5000, the fee is calculated as follows:

$5000 X .002 = $10

For a list of allowed Adjustments, see the back of the Declaration of Gross Receipts form or contact the Business Licensing Division. Be sure to write the adjustments on the appropriate lines on the back portion of the form that is returned to the city.

6. Can I deduct expenses?

No. You must report the total amount of money collected, not just your profit. See the back of the Declaration of Gross Receipts form for allowed adjustments.

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1. What applications are required for a new hotel business?

Hotel owner will need to fill out a business license application and a Transient Occupancy Registration Permit Application. 

2. Are there any deposits due to the City when applying for a hotel business license and Transient Occupancy Registration Permit?

Yes, the business licenses account requires a $100 deposit. The transient occupancy registration account requires a deposit that shall not be greater than twice the business’s estimated average liability for the period for which the business files returns or ten thousand dollars ($10,000), whichever amount is the lesser.

3. When will I receive the Hotel Transient Occupancy Tax (TOT) and Business License deposit refund?

Hotel Transient Occupancy Tax (TOT) deposits are refundable upon the close of your business. Business License deposits may be requested after two consecutive full fiscal quarters of operation are reported and paid by the due date. Refund requests must be made in writing.

4. What is the Transient Occupancy Tax (TOT)?

TOT is a tax collected from guests that occupy or have a right to occupy a living space or establishment for 27 days or less. This tax must be remitted to the City of Modesto.

5. What is the current Transient Occupancy Tax (TOT) rate?

TOT is currently nine percent (9%) of the rent and must be collected by the operator from the guest. 

6. What hotel fees are considered TOT Taxable?

A list of lodging fees which should be captured as part of the definition of “rent” and subject to the City’s Transient Occupancy Tax (TOT) can be viewed on the Exemptions to Transient Occupancy Tax (TOT) web page.

7. When is the Hotel Transient Occupancy Tax (TOT) reporting period?

TOT must be reported and paid in our office, online, or postmarked by the 20th day of the close of each month. 

Example 

Reporting Period	Payment Due Date (postmark date)
July 1 – July 31	August 20
August 1 – August 31	September 20
September 1 – September 30	October 20

8. What is the Mill Tax (Business tax) Rate?

As the operator, you are responsible for paying your quarterly mill tax of .002 based on your Gross Receipts.  The mill tax is not a fee that is collected from the guest. 

9. When is the Mill Tax reporting period?

Mill taxes must be reported and paid to the City within one calendar month of the close of each reporting period.

 

Mill Tax reporting periods and payment schedule:

Reporting Period	Payment Due Date (postmark date)
July 1 – September 30	October 31
October 1 – December 31	January 31
January 1 – March 31	April 30
April 1 – June 30	July 31

10. How do I make a TOT and Mill Tax Payment?

You can pay your TOT and Mill Taxes in person, via mail, or online.  

In person payment can be made Monday through Friday, 8:30 a.m. to 4:30 p.m., except for holidays, at:

1010 10th Street Suite 2100 (2nd floor)
Modesto, CA 95354

 

TOT & Mill Tax payments can be mailed to our office along with the TOT reporting form and the Declaration of Gross Receipts Form. Payments postmarked after the due date are considered late and will accrue penalties. 

Mail payments to:

Business License
PO Box 3442
Modesto, CA 95353 

Pay your Taxes Online

TOT tax payments and Mill tax payments are made separately. For TOT tax payments you will need to contact our office to provide you with the account number and the pin required to make the online TOT tax payment.

Ways to Pay

11. Do I have to file the Quarterly Declaration of Gross Receipts and the Monthly Transient Occupancy Tax Report even if I don’t have reportable revenue for the quarter?

Yes, you must file your Transient Occupancy Tax report and report your gross receipts by filing the Declaration of Gross receipts, even if they are zero, to keep your license current and active.  

12. If I have additional questions, who do I contact?

If you have any questions, reach out to the City of Modesto by emailing BusinessLicenses@modestogov.com or calling 209-577-5389.