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boxingcardman1. You do not need a license from the state of CA to do business. If you do certain types of sales you need a resale permit for sales tax reporting,
2. At the city level, nearly every municipality in CA requires you to have a business license. Some areas like Burbank charge a flat fee per year. Others, like LA or SF charge a gross receipts tax on businesses.
The license discussed in the story is a business license from the city of San Clemente. Evasion of license requirements is common, both willful and unintentional. Most business owners do not realize they need one until they are caught in a license sweep, where the license rep comes through your building knocking doors and asking to see your permit.