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1. What is a Business License Tax Certificate?

A Business License Tax is an annual tax you pay each fiscal year for doing business within the incorporated area of the City of Cloverdale. The Business License Tax Certificate is evidence only that your tax has been paid, however, other permits may be required to open your business. A separate tax certificate is required for each type of business at the same location or for each branch location.

Cloverdale's municipal code requires that you obtain a license prior to conducting any business activity within the city. Even if your business is located outside the city limits or you have a business license from another city you are required to pay tax in Cloverdale.

Receipt of a Business License Certificate does not constitute an endorsement of the business nor does it grant permission to conduct business at any place prohibited by the city’s Zoning Ordinances or any other federal, state, or local regulation.

2. If the city's Business License Tax doesn't regulate professionals, trades people and business owners, what does the license do?

The City of Cloverdale business license is a tax on the privilege of conducting business in the City of Cloverdale and is solely for the purpose of raising revenue for municipal purposes.

The payment of your tax for a business "license" simply reflects a tax payment in much the same way the "license" plate on a car represents a tax payment.

3. Who needs to pay the Business License Tax?

Essentially anyone who sells a product, produces a product, or provides a service is required to pay an annual tax which is initially collected with the application. To be clear, if you do not receive a payroll check for the type of product you sell or service you provide, you are probably subject to a business license tax.

4. I receive a 1099 earnings certificate that I file with my tax return because my employer does not pay me like their other employees. Do I need to pay the Business License Tax?

Yes, you do. You are considered an independent contractor or are self-employed, therefore, act as a business owner even if you provide these services to one business or individual.

5. Why do I need to pay this tax?

The City of Cloverdale is required to collect the business license tax equitably and accurately from all individuals and entities conducting business in the City of Cloverdale. This tax is used for the benefit of the community by using the revenue to provide 911 emergency services to the community, maintain city streets and public parks, furnish animal control services, and provide local law enforcement and community services as a few examples. Without this revenue, services are subject to a reduction in staff or maintenance.

6. Do I need planning, zoning and/or building permits before I submit my business license tax application?

Individuals and businesses can submit and pay a tax anytime they expect to do business in Cloverdale. However, planning, zoning and/or building permit requirements may also need to be in place before you start providing business services.

Please contact the Cloverdale Community Development and Planning Department at 707-894-1701 for more information. They are open Monday through Thursday from 8 am to 5 pm.

7. Do I need to have a fictitious business name or DBA?

County regulations require persons doing business for profit under a fictitious name (does not include your surname in the company name) file a fictitious business name statement. For information 24 hours per day, 7 days per week that is pre-recorded, please call the Sonoma County Clerk's Office at 707-565-3700.

8. Are there any restrictions on where I do business

Every business must meet planning and/or zoning requirements to ensure that its business category and site are compatible. Before signing any leases, please contact the City of Cloverdale Community Development Department at 707-894-1701.

9. I conduct business in several towns. Can I just get one license to do business in all of them?

Unfortunately, no. Each city and town has its own business license requirements and probably need to obtain a license for each. Cloverdale will not honor any business license certificate obtained from another city or town.

10. My business is just starting and I haven't made any money. Do I still have to pay a tax?

Yes. The tax is imposed if you intend to or have started doing business in Cloverdale, whether you have or have not generated income from your business. This includes a part-time or hobby-related business.

11. I own more than one business. Do I need to pay a separate tax for each?

Yes, if you own more than one business, a separate Business License Tax Certificate is required for each.

12. How much does a Business License cost?

The business license is based on a flat tax plus additional amounts depending on the type of business and number of employees. A typical annual business license tax starts at $57.25 up to $338.50 annually. All tax rates are listed in the Cloverdale Municipal Code and are included with the Business License Tax Application Packet (PDF).

13. How often do I pay this tax?

The tax is an annual amount. Each December, the city will mail a renewal notice and bill to the address on record and payment is due prior to January 31st of each year to prevent penalties. It is the responsibility of the business or individual to notify the city in writing when they do not intend to do business in Cloverdale for the next calendar year. Once an account is inactivated, a new application is required to resume business.

14. How do I obtain a license and how long does it take to apply?

You can obtain an application from City Hall, or download the Business License Tax Application Packet (PDF).

Complete the application and return it with your payment to City Hall at 124 North Cloverdale Boulevard in Cloverdale. You can also mail it to:
PO Box 217
Cloverdale, CA 95425

Once received and the payment has been processed, you will receive your business license certificate in 2 to 6 weeks.