San Jose is setting up a yearlong business tax amnesty starting Jan. 1, 2026, giving companies a chance to clear overdue city business taxes and certain business improvement district fees without any penalties or interest. The program will run through Dec. 31, 2026, and city officials say the goal is twofold: pull lapsed or unregistered businesses back into the system and bring in a modest bump in revenue for city services. The City Council signed off in December, giving staff the green light to roll out the program, along with targeted outreach and temporary staffing support.
What City Leaders Just Signed Off On
A staff memorandum and related ordinances from the City Council authorize the Finance Department to operate the amnesty and waive penalties and interest for eligible late payments, with an application window from Jan. 1 to Dec. 31, 2026, according to the City Council staff memo. The document spells out that assessments tied to the Downtown, Japantown, Tully Road, and Monterey Corridor business improvement districts qualify for the amnesty. It also notes that installment plans may be offered if requested, although falling behind on those plans could put businesses right back on the hook for the full amount.
Who Gets A Break And What Is On The Line
City records list roughly 96,000 registered businesses, and officials are projecting that the 2026 amnesty could recover about $3.1 million to $3.2 million based on how earlier programs performed, according to San José Spotlight. Finance Director Maria Öberg has characterized the effort as equal parts outreach and enforcement, saying it is meant to help businesses that slipped behind while shoring up long-term revenue stability for the city.
How City Hall Did The Math
To come up with those estimates, staff leaned on the city’s 2019 to 2020 amnesty as a benchmark. That 12-month program brought about 5,800 taxpayers forward and generated roughly $3.18 million, according to figures cited in the staff memo. For 2026, the memorandum breaks out expected revenue into three buckets: new business registrations, underpayments that get corrected, and delinquent accounts that finally pay up. From that total, staff subtract an anticipated cost of about $250,000 for temporary staffing and outreach, which leaves an estimated net in the range of $2.9 million to $3.1 million.
Business Districts Sound A Cautionary Note
Not everyone on the council is eager to treat amnesties as a regular way to plug budget holes. Some members urged restraint, including District 6 Councilmember Michael Mulcahy, who pointed out that several newer business improvement districts have collected only about 60% of the fees they are owed. He pressed staff to focus on stronger long-term compliance strategies, San José Spotlight reports. City officials say this amnesty will be paired with outreach and targeted mailings to delinquent accounts in an effort to shrink that gap.
How Businesses Can Get In On The Deal
City officials say a web portal and outreach materials will go live in January. Businesses will be able to register, make payments or apply for exemptions through the Finance Department’s business tax pages or by contacting the Business Tax office, according to the City of San José Business Tax & Registration site. San Jose has gone digital with amnesty programs before, partnering with CityBase in 2020 to streamline applications and payments, a move staff say helped bring thousands of additional businesses onto the tax rolls during that cycle.
The Finance Department plans to track amnesty revenues in its regular financial updates, allowing the public to see how much money the program actually generates.
