Licensing Requirements for Home Based Businesses
by NicoleD, Former Moderator
- Created: March 16, 2009, 5:28 pm
- Updated: February 17, 2011, 4:59 pm
Starting a home-based business is a rewarding and flexible option for thousands of small business owners. However, starting up is not as simple as hanging an “Open for Business” sign on the front door. Understanding the required permits you’ll need to legally operate your business can save you from big head-aches (and big fines) down the road. Regulations vary based on industry and location, and while there is no one-size-fits-all permit checklist for home-based businesses, there are general guidelines home-based business owners should be aware of:
1. General Business Licenses
Most home-based businesses owners will be required to file an application for a general business permit from their city or county to legally operate in that area. County registrations may apply to you if your home-based business is outside the jurisdiction of a town/city.
2. Professional and Trade Licenses
Some industries may have to obtain professional/occupational licenses, such as a nursing certificate or a real estate license, at the state government level. You can contact your state's business license office for a complete list of the occupations that require licensing in your area.
3. Home Occupation Permit
Many city and county zoning and planning agencies require all home-based businesses to get a Home Occupation Permit. If a permit is not required in your city, the zoning office should tell if your neighborhood is zoned for the business activity you plan to conduct from your home. If your area is not zoned for your type of business, you may need to file for an additional variance or conditional-use permit. Visit the Zoning Laws for Home Based Businesses page for more information about zoning laws for home-based businesses.
4. Sales Tax Permit
If your home-based business sells taxable goods or services, you may be required collect state and local sales taxes from your customers. If you sell your products in a state that charges a sales tax; or levies a gross receipts or excise tax on businesses you may have to apply for a tax permit or otherwise register with your state revenue agency. If you plan to run an online business, visit Collecting Sales Tax Over the Internet.
5. Health and Safety Permits
Depending on your location and industry, you may need either a permit or inspections from your local fire department, especially if your business requires the use of flammable materials or assembling of people in one location (such as a child care service) Air and water pollution by businesses are monitored in some communities. You can check with your state environmental protection agency to see if these regulations are applicable. Health Department permits are typically issued by your county government, pending an inspection of the business premises, if you plan to sell food to the public or to other businesses. Additional permits may be required for food-service or food-preparation depending on your state.
6. Sign Permits
Some cities and town have sign ordinances in effect that restrict the type, size, or location of signs placed on your property.
7. Construction Permits
Environmental and building permits may be required for construction. It’s a good idea to check your local government’s building and planning department before undergoing any construction efforts.
8. Tools and Resources
- The Licenses and Permits Tool on Business.gov allows you to get a listing of federal, state and local permits, licenses, and registrations you’ll need to run a business.
- Home-based business resources for starting up, financing, and marketing your business
Message Edited by NicoleD on 03-17-2009 09:48 AMMessage Edited by NicoleD on 03-17-2009 09:52 AM
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