Launching a retail store in a San Jose mall comes with essential permits and fees that can add up quickly. From business license taxes and building permits to fire safety inspections and signage approvals, understanding the costs upfront can help you budget effectively.
In this guide, we break down the expected startup and ongoing expenses—including permit fees, regulatory costs, and hidden charges—so you can plan your investment with confidence and avoid unexpected financial surprises.
Business License Tax
San Jose’s business license is a tax based on the number of employees (not a flat fee license). The base tax is about $195 per year for a small business, which covers up to a certain number of employees.
In addition, there is a per-employee fee: roughly $25 (and up to ~$55) per employee (scaled by business size).
For example, a retail store with ~10–15 employees might pay on the order of $195 + ~$25×(employee count) per year in city business tax. That would equate to roughly $445–$570 annually in this scenario.
Note: The city invoices this tax annually. The initial registration fee is essentially this tax; there isn’t a large separate application fee, though there may be a small processing fee. (Always check the latest Business Tax Rates with the City, as the rates can be adjusted for inflation or by ordinance.)
Building Permit Fees (Tenant Improvement)
Building permit fees are typically the most significant up-front costs if you are renovating the space. San Jose calculates building permit fees based on the project’s valuation (cost of construction) and uses an hourly rate for plan review and inspections.
As of mid-2024, for example, San Jose’s published rates included roughly $211/hour for permit issuance, $308/hour for plan review, and $315/hour for inspections. The total fee is determined by how many hours of review/inspection your project requires (simple projects require fewer hours).
Estimate: For a modest retail interior remodel (let’s say ~$50,000 project value, perhaps a 1,000–2,000 sq ft store build-out), permit fees might be on the order of a few thousand dollars. Industry rule of thumb indicates commercial permit costs around 1%–5% of the project value.
So a $50k build might incur ~$500–$2,500 in city permit fees; a larger $200k build could incur $2k–$10k in fees. This usually includes the standard plan check and inspection visits.
Building Permit Ancillary Fees
In addition to the core permit fee, budget for related costs: plan-check fee (often 65%–100% of the permit fee, but in San Jose the hourly rate covers this), a small technology fee or records fee the city may add (often a percentage surcharge), and Strong Motion Instrumentation Program (SMIP) fee (state seismic fee, usually a few dollars per $100k of value).
These will be rolled into the permit invoice. If your project involves plumbing, electrical, or mechanical work, there might be minor separate permit fees for those trades (or they are calculated as part of the overall TI permit). For planning purposes, it’s safest to assume the building permit (all inclusive) will be in the low thousands of dollars.
Fire Department Fees
Fire plan check and inspection is often included in the building permit fee (San Jose does charge for the fire plan review via the same hourly plan check rates). However, if you need a dedicated fire alarm or sprinkler permit, those come with their own fees.
For instance, adding or altering a sprinkler system might cost a few hundred dollars in permit fees (plus whatever your contractor charges for the work).
The Fire Department may also charge an inspection fee for the fire final; typically this is part of the base permit fee. In sum, fire-related permit costs for a typical retail TI are usually a few hundred dollars (often embedded in your building permit costs).
Sign Permit Fee
San Jose’s sign permit fees are modest compared to building permits. Often it might be on the order of $200–$300 for a sign permit application (covering plan review and inspection of the installed sign).
If you have multiple signs (e.g., one on the exterior building facade and one hanging in the mall interior), fees could apply per sign. Check San Jose’s planning fee schedule for sign permits; in many cases it’s a flat application fee (e.g., $290 for a sign in a plaza, per a city fee list).
Also factor in the fabrication/installation cost of the sign itself via your sign contractor.
It is worth noting, that if you’re building in a mall or shopping center, the building owner may already have a master sign program. In those situations, signs that abide by those regulations may not need to be permitted with the city because the program has already gone through review.
Seller’s Permit
No cost to apply (free). The CDTFA does not charge an application fee for a seller’s permit. You’ll just need to budget the time to handle your sales tax filings.
Other Costs:
- State Employer Registration: Free to register, but you’ll be paying into unemployment insurance, etc., as you run payroll. Also, you’ll need to obtain workers’ compensation insurance for your employees (the premium cost depends on payroll and insurer rates – legally required in CA when you have employees).
- Fictitious Business Name: Santa Clara County charges around ~$40 for the FBN filing plus the cost to run a newspaper notice (another ~$40–$60). Only needed if applicable to your business name.
- City Business Tax Renewal: The annual business tax (as noted above) will recur. Also note San Jose charges late fees if you fail to pay on time.
- ADA Compliance: California charges a $4 state fee on any local business license to fund disability access education (this might be included automatically in your business tax registration fee). Also, consider an ADA survey or improvements cost if the space needs upgrades – not a permit fee, but a compliance cost.
- Inspection Fees: Most standard inspections (building, electrical, fire) are covered by your permit fees. However, if you fail an inspection and require multiple re-inspections, the city could charge a re-inspection fee (often ~$150+). So ensure your contractor is prepared to pass inspections to avoid extra costs.
In summary, for budgeting: acquiring the necessary permits for a small retail store in a mall might total on the order of $3,000–$10,000 in up-front city permits and related fees (assuming a moderate interior renovation), plus a few hundred for business registration and miscellaneous items.
Annual ongoing fees (business tax, etc.) will be a few hundred dollars per year. Always verify current fee schedules, as city fees can change annually.