March 28, 2013 -- Businesses operating without licenses in Santa Monica, including those operating out of people's homes, will get most of their penalties waived if they register with the City during its two-month long amnesty program.

From April 8 to May 24, owners of the estimated 700 businesses operating in Santa Monica without licenses would be able to register their businesses and forgo most the penalties, but none of the taxes.

“The businesses that have failed to comply with the law by registering with the City and paying business license taxes, regardless of the reason, will be able to voluntarily come into compliance and have any penalties that would be due reduced by” 90 percent, staff said.

“In all cases, a business would be required to pay all taxes due; no reduction or waivers of taxes will be granted under this program,” staff said.

The amnesty program also would only apply to businesses which have never been registered with the City, not to businesses whose licenses have not been renewed.

Last financial year, the City collected $26.3 million in revenue from business license taxes and penalties. Staff estimates that the amnesty program will bring in $250,000 in back tax revenue as well as $500,000 annually, going forward.

Under current City statutes, any business -- including individuals who operate businesses out of their homes -- making between $60,000 and $40,000 a year pays a flat tax of $75. Anyone making less than $40,000 is exempt.

If a business is making more than $60,000 a year, they pay anywhere from $5 for every $1,000 they gross to $1.25 for every $1,000, depending on the type of business.

The money goes to the City's General Fund, officials said, to pay for “police and fire protection, street maintenance, libraries, and parks.”

In 2004, when Santa Monica last offered an amnesty program, the City collected nearly $275,000 in penalties from 725 unregistered businesses, mostly based out of people's homes.

The City refunded the money in 2005 after many of those fined complained that they hadn't known that business licenses were required.

“Late payment of business license tax is subject to penalties ranging from 20% to 100% of the tax due,” said staff. “Operating without a business license is subject to administrative citation or criminal prosecution.”