Monterey, CA Local Taxes & Fees: Business Tax Classification (2026)

Every person carrying on a business in Monterey pays an estimated annual license tax based on gross receipts, administered by the Finance Director under City Code Chapter 19. 15% of everything above $25,000 for larger businesses; a fixed place of business in the City creates a rebuttable presumption that all its gross receipts count toward the tax. Section 19-5 requires a separate license for each distinct kind or class of business a person operates at one location, which is why the Chapter carries classification-specific sections rather than one blanket rate.

Public utilities, defined to include bus companies, express companies, telegraph, telephone, water, gas and electric companies, are licensed under Section 19-54 but still pay the Section 19-27 rate, and remain separately bound by any franchise agreement and franchise tax already owed to the City. Residential rental operators of ten or more units (apartment houses, house courts, bungalow courts, or ten or more rented single-family dwellings or lodging accommodations) fall under Section 19-55's own bracket: $15 on gross receipts of $12,500 or less, plus $6 for each additional $2,500 (or fraction) above that threshold; licensed real estate brokers or agents acting only as agents for such owners are exempted from this section.

Many older classification sections that once set separate rates for auctioneers, automobile repair and sales, manufacturing, contractors, and coin-operated machines have since been repealed, folding those businesses back into the general Section 19-27 bracket. Applications go to the Finance Director, who classifies the business and computes the tax; new licenses are prorated by quarter of application, and renewals are based on the prior calendar year's gross receipts, certified under penalty of perjury.