Starting a service business in California comes down to four things: picking a structure, registering with the state, getting licensed for your trade, and setting up a way to bill customers. Filing an LLC in CA costs $70, ongoing reporting is $20 biennially (statement of information), sales tax is 7.25% + local, and personal income tax runs 1%–13.3%. Below is the full sequence, the fees you should budget for, the licenses most trades need, and the deadlines that catch new California owners off guard.
Most new registrations come out of Los Angeles, San Diego, San Jose and the rest of California — local business licenses are issued at the city or county level, so check yours after the state filing clears.
| Item | CA cost |
|---|---|
| LLC / entity filing (one-time) | $70 |
| Annual / periodic report | $20 biennially (Statement of Information) |
| Federal EIN (IRS) | Free |
| Sales tax registration | Typically free |
| Trade / professional license | Varies by trade |
| Local business license | Set by city / county |
Fees change — confirm current amounts with the CA Secretary of State and the California Department of Tax and Fee Administration.
Choose your structure and file with the CA Secretary of State ($70). Get your free EIN from the IRS the same day.
Register for California sales tax with the California Department of Tax and Fee Administration, then open a business bank account under the registered name.
Apply for your trade license and local business license. This is usually the longest step: Seller's permit (free); City business license ($50–$500).
Get general liability insurance (and workers' comp before your first hire), then set up estimates and invoicing so you can bill the day you're cleared to work.
LLC Filing Fee
$70
Annual Report
$20 biennially (Statement of Information)
Sales Tax
7.25% + local
Income Tax
1%–13.3%
Choose your business structure
Register with the CA Secretary of State
Get a federal EIN
Register with the Franchise Tax Board
Get a seller's permit from the CDTFA
Obtain city/county business licenses
Get workers' comp insurance if hiring
Open a business bank account
California has an $800/yr minimum franchise tax for LLCs
Use CalGold to find all permits needed for your business type
Get a seller's permit before collecting sales tax
Many cities require separate business tax certificates
Filing is only $70, but the annual $800 franchise tax makes it pricier than other states.
Yes, if you sell taxable goods or services. It's free from the CDTFA.
Online LLC filings with the CA Secretary of State are typically processed in a few business days, and an EIN from the IRS is issued immediately online. Trade licensing and local permits usually take longest — plan on two to six weeks before you're fully cleared to work, depending on your trade.
No — you can operate as a sole proprietor in California and still invoice customers legally. An LLC ($70 to file, $20 biennially (statement of information)) separates your personal assets from business liability, which matters most once you're on customer property, hiring help, or signing contracts.
California sales tax is 7.25% + local. Materials and goods are commonly taxable, while labor treatment depends on the type of work, so bill parts and labor as separate lines and register with the California Department of Tax and Fee Administration before you start collecting.
Open a business bank account under the registered name, then invoice from a tool that applies CA tax per line item and accepts cards. Glo Invoice sends invoices by text with a one-tap pay link, and Tap to Pay lets you charge on site before you leave the job.