Introduction (First Reading) of Business
License Ordinance Revisions
Agenda Item 12.B
By Nadia Feeser, Administrative Services Director
Meeting Date: January 20, 2026
Background
•On September 16, 2025, City Council reviewed:
•History and purpose of business licenses
•Current audit and enforcement practices
•Gross receipts–based taxation as a standard and equitable approach used across California •Discussion highlighted concerns raised by commercial property owners •Review of Chapter 5.04 (Business License Ordinance) identified the need to:
•Update outdated provisions
•Improve administrative clarity
•Align with current business practices
•Modernize licensing, reporting, and compliance processes •On December 10, 2025, staff met with commercial property owners to review the draft ordinance and address questions
History of Business Licenses
1946: First business license ordinance adopted (Ordinance O-001) Multiple amendments over time to add rates and business types •Established the current gross receipts–based structure 1987: Major update adopted (Ordinance O-1987-10)
•Only minor updates made
•Flat rates apply only to businesses specifically listed in the Code •Per-unit rates apply to residential rentals
•All other businesses are taxed based on gross receipts Since 1987:
Purpose of Business Licenses
Provide regulatory oversight
(zoning, building, fire,
health & safety)
Support public safety and
emergency response
Offer consumer protection
and accountability
Promote equity among all
business types
Facilitate communication
and community
engagement
Revenues support the
General Fund, including:
•Police and fire services
•Streets, sidewalks, and public
facilities
•Public restrooms
Overview of Proposed Changes to Chapter 5.04
Updates to Chapter 5.04 focus on:
•Modernized definitions and terminology
•Clarified enforcement and administrative authority
•Updated appeal procedures
•Streamlined application and renewal processes
•Improved organization and code clarity
No changes to business license rates
Fiscal Impact
No immediate fiscal
impact
No changes to
business license
rates
Updates are
administrative and
procedural in nature
Conclusion and Recommendation
Recommendation: Introduce an Ordinance (Attachment 1) implementing changes to various provisions of Pismo Beach Municipal Code Chapter 5.04 Business Licenses Generally.
•Alternatives: Modify the ordinance, or take no action
If the Council acts to introduce the Ordinance, it will be returned for adoption at the next available meeting (February 3, 2026). If adopted, it will become effective by statute 30 days thereafter (March 5, 2026).