Novato Businesses to Collect New Sales Tax Starting April 1, 2025

Effective April 1, 2025, Novato businesses will need to start collecting the new voter-approved sales and use tax rate of 9.25% on taxable items.

Businesses within Novato city limits should have already received a notice from the California Department of Tax and Fee Administration (CDTFA) regarding this rate change, including information on the new tax rate and tax codes. For a detailed explanation of tax rate changes, please see the CDTFA’s Explanation of Tax Rate Changes Operative April 1, 2025.

If you need assistance or have questions about the sales and use tax, please contact the CDTFA at 1.800.400.7115 between the hours of 7:30am and 5:00pm (Pacific time) Monday through Friday. You can also email the CDTFA by filling out their online form. 

Additional CDTFA Resources for Businesses

• District Taxes and Sales Delivered in California 
• Applying Tax to Your Sales and Purchases 
• Find a Sales and Use Tax Rate by Address (Note: Novato’s local sales and use tax rate increase is effective April 1, 2025)

Approved by Novato voters with the passage of Measure M in November 2024, and paid by anyone shopping in Novato, this local sales tax increase of 0.75% is estimated to bring our community an additional $10 million of locally controlled revenue per year. The City will begin receiving funds in July 2025 to directly support community identified priorities such as public safety and emergency response, roadway repairs, and parks and facilities maintenance.

Business License

An important part of doing business in the City of Novato includes obtaining the required business license and/or permit. The City partners with HdL Companies to provide online services for all your business license needs including:

• applications;
• renewals;
• payments;
• change of ownership/address; and
• dissolution of business.

Our online filing and payment portal allows you the convenience of filing and paying your business license online by paying with Visa, MasterCard or Electronic Check.

Hotel & Lodging Establishments (TOT)

The City partners with HdL Companies to provide online services for collection of the Transient Occupancy Tax (TOT).

Transient Occupancy Tax (TOT) and Tourism Business Improvement District (TBID) returns for hotels and motels can now be submitted online, by phone, and mail to simplify your monthly reporting.