Business Licenses and Permits
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Business Licenses and PermitsYou finally come up with a great idea for a home business, can't wait to get started, and then Whack! You find out that there are a million permits and licenses to get before you get started. Don't get discouraged because not all permits and licenses apply to everybody. For instance, the person who wants to open a home catering business will need different permits than the person who wants to teach yoga in his or her den.
Business LicensesEvery business, no matter what the size or location, must have a business license issued by the county where that business will be located. Most license fees range from $50 to $125 and are valid for up to three years . If you fail to get a license in a timely manner, you can be fined for late application fees. While your business license is being processed someone from the zoning department will typically come out and do an inspection of your business site. Home Occupation LicenseIf your local government restricts home-based businesses in your area, you will need to obtain a home occupation license. Air and Water Pollution Control PermitMany local, county, and city governments have codes in place to protect its population from air and water pollution. If your business creates gases, discharges waste into the sewers, or burns any kind of materials into the air, it is likely that you will need a permit. Fire Department PermitGenerally, you will need a fire department permit if you plan to use any flammable products or if your home will be open to the public. What home-based businesses are more likely to require a fire department permit?
Sign PermitThere are restrictions on the use of signs for business use. In some communities, signs of any kind, even "for sale" signs, are not permitted. In other communities, there are restrictions on the sign's size, location, lighting, and type. Health DepartmentIf you intend to handle or sell food in your business, you will need a health department permit. The health department in your area will come out and inspect your equipment and facilities before issuing a permit. In some areas, you might even be required to take a course in the proper handling of food. County, State, and Federal Licenses and PermitsAny business may have to answer not only to local government but also to county, state, and federal governments as well. County PermitsIf your business falls outside a town or city's jurisdiction, you will need a county permit to do business. State LicensureThere are many professions and occupations that require licenses or occupational permits. Obtaining a license usually means that the person has passed an examination or completed required course requirements. Typically, the following professions require state licensure:
Federal LicensesMost home-based businesses do not require a federal license. Those that do require a federal license usually fall under businesses that include meat processing, investment advisories, or radio and TV stations . To find out if your business will require one, contact the Federal Trade Commission (see Appendix A). Seller's Permit/Sales Tax LicenseYou must pay sales tax if you are a home-based business that sells taxable goods or services to the public. Sales tax is required if you are doing business on a retail level. While many states don't require that service businesses collect sales tax, many are beginning to require it. Both sales tax and sales regulations vary from state to state so be sure to find out what is required in your local area. It's in your best interest to have your seller's permit before opening up for business. In some states, it is considered a criminal act to operate a business without one. If the state finds out that you haven't been charging sales tax to your customers they can make you pay back everything that should have been charged to your customers.
You can find out what is needed in your state by contacting your state's tax department.  |
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