The move comes after the May mass shooting at a transit yard in the city that left nine people dead.
The move was approved by the city council this week and will require every gun owner to buy liability insurance and pay an annual fee for gun-related emergency responses.
The city has not yet decided how much the fee will be and it will be set after the Pacific Institute on Research and Evaluation completes a gun harm study later this year.
In a preliminary report the institute estimated that gun-related incidents cost San Jose tax payers around $63m annually in direct out-of-pocket costs, jobs and quality of life, according to The San Francisco Chronicle.
The study estimates that between 2013 and 2019 gun violence, which saw 205 people shot, cost the city of San Jose an estimated $442m.
“While the Second Amendment protects the right to bear arms, it does not require taxpayers to subsidize gun ownership,” said Mayor Sam Liccardo before the vote.
“We won’t magically end gun violence, but we will stop paying for it. We can also better care for its victims, and reduce gun-related injuries and death through sensible interventions.”
The mayor also said that data showed that gun violence cost the state of California $1.4bn in 2018.
The move is expected to face legal challenges from gun rights groups.
Liccardo is “quite confident” the city will win any legal challenges.
“When it comes to sensible gun regulation, no good deed goes unlitigated,” said Mr Liccardo.
“It’s fair to say there’s going to be a very active effort on the part of the legal community here in the Bay Area to ensure that whatever we pass is appropriately defended.”
The measures are part of gun control reforms that Mr Liccardo has been pushing since the mass shooting at the Gilroy Garlic Festival in 2019.
The city council passed one of his plans last month, which requires all purchases at gun shops to be video and audio recorded.
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