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Run a Home-Based Business? – Find the Licenses and Permits You Need

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Run a Home-Based Business? – Find the Licenses and Permits You Need

By Caron_Beesley, Contributor
Published: June 13, 2012 Updated: February 22, 2016

Whether you’re starting a business from home or looking to move into a home office, it’s important not to overlook the fact that your business is still subject to license and permit laws.

Why? One of the main reasons any business owner is required to carry a license is so that revenue can be tracked for taxation purposes. Businesses that sell taxable goods or services also need a sales tax license or permit. Licenses and permits are also used to protect the public and are required in federally regulated industries (aviation, firearms, alcohol businesses, etc.).

Other industry licenses signify specific expertise. For example, if you run an in-home hair styling business, you’ll need the same professional license that you’d need if you had a main street salon.

Regulations vary based on industry and location, so it can be intimidating to know where to start.

Find Your License and Permit Requirements

Select your state from the list to discover which licenses or permits you’ll need, together with information and links to the application process.

General Home Business License and Permit Guidelines

In addition to the Permit Me tool, it’s helpful to know more about the general guidelines that apply to home business licensing and permit requirements. While not all of these will apply to every business, some will: 

1. General Business Licenses – Your city or county government website can help you get one of these. Basically it’s an annual license or permit that legally entitles you to operate a business in that locality.  Typically a small fee is associated with this paperwork.

2. Professional and Trade Licenses – State governments require certain businesses or industries to obtain professional/occupational licenses, such as a child care operation or real estate license. You can contact your state's business license office – or check the website – for a complete list of occupations that require licensing. 

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 can tell you if your neighborhood is zoned for the home business activity you plan to conduct. If your area is not zoned for your type of business, you may need to file for a variance or conditional-use permit. This guide, Zoning Laws for Home-Based Businesses, has more information about zoning laws for home-based businesses. 

4. Sales Tax Permit - If you intend to sell taxable goods or services (online or offline), you may be required to 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. This blog also explains more about the process of getting a permit and collecting sales tax: Sales Tax 101 for Small Business Owners and Online Retailers.

5. Health and Safety Permits – Depending on your location and industry, you may need either a permit or an inspection from your local fire department, especially if your business requires the use of flammable materials or will likely involve the assembly of several people in one location, such as a child care business.

Air and water pollution by businesses is also 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 towns have sign ordinances in effect that restrict the type, size, or location of signs placed on your property. Check with local authorities.

7. Construction Permits – If you need to make structural changes to your property to accommodate your in-home business, 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 undertaking any construction. 

8. Check with Your Home Owner’s Association (HOA) – While your local HOA won’t specify particular licenses or permits, if you do live in a planned residential neighborhood or complex, the HOA can restrict the type of business activities you conduct in your home.

About the Author:

Caron_Beesley
Caron Beesley

Contributor

Caron Beesley is a small business owner, a writer, and marketing communications consultant. Caron works with the SBA.gov team to promote essential government resources that help entrepreneurs and small business owners start-up, grow and succeed. Follow Caron on Twitter: @caronbeesley

Comments:

Hi - I'm looking to start a freelance writing/editing/proofreading home based company. This will be a side job to help supplement my income, but I want to make sure I'm doing everything by the book. Do I need a professional or trade license for this business type?
If I am doing online product reviews but would also like to sell the products from my website, even though they are not my products, I'd basically be an affiliate and receive a small commission, do I need a business license? Do I need to make my website and services and LLC?
Hello, I have a question, I have an online site. I know I need to file a LLC. I live in massachusetts, can you please help me because I do not know what kind of liscence I need to obtain to sell online. I sell eyelashes
Do I need a business license to board two horses on my property for less than 5,000/year?
i have a question i have my own business and my own website i sell bridal decor and accessories and i work and sell from home , i have a room where i have shelves and i store my products, and then a small walk in area for all my shipping items, and when a customer orders i go and get the product and pack it up, and ship it out. but when i made my business is sole owner meaning its just me and so one else, and i live in Oklahoma and they do not give permits to home base business, and i do not charge customer tax, and my web developer had me use my ss number for my business due to the fact it was just me, but i have gotten in contact with other company that are wholesale where i can add there items and pictures and drop shipper, but they want me to be able to show proof of my business, my pay pal account says Lisa Bridal Store and my square account, they want a paper or permit from the tax saying, i am tax exempt, and when i had someone make my website they had set up my pay pal account as non profit, cause when customers order from my site and i ship then out, i use that money to buy more items. but i have a few wholesale co that dont want any proof, and i have some that want some kind of card or permit to prove i am the owner of Lisa Bridal Store , and where can i get one of these, and i have a pay pal accout that says my business name, and i dont charge customers any tax online, should i be charging them tax, my business is a sole owner, and non profit and my web developer had set up my pay pal as non profit, and i use my own ss number, and Okalhoma State does not give out permits to business owners who work from home. what can i do to get a permit, and how can i proof my business to the wholesaler co, like i said my web developer set up my pay pal as non profit, and i need to prove my tax id number, and i need to also proof the certicate of exmpt, do i print out my statement for my pay pal and email them it, or do i go to the tax comminion, and why does Oklahoma State not issue permits to home bases online busimess
I am planning to open an online store. Sole owner, what permits or licenses do I need?
Am in beauty collage to open a salon, Do i need a licenses to open it and run it out of my home?
I am starting a dog kennel in my commercial building by my house what kind of license do I need to get started?
I am planning to open an online store. Sole owner, what permits or licenses do I need?
I am planning to open an online store. Sole owner, what permits or licenses do I need?

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