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Home-based-business regulations
Dear Small Biz Adviser:
Do I need to research local small-business laws if my business is
home-based and operated solely through an Internet home page?
Sincerely,
Pleniflora
Dear Home-based Plenifloria:
Yes, you have to pay attention to local laws and ordinances even
if the business is solely operated from your house.
First, check your city zoning laws regarding home-based
businesses. In some locales, home-based business is completely outlawed.
In others, it is a matter of limitations on what you can and can't
do.
Next, apply for an occupational license in your city
and county (or parish). The prices for these one-year licenses can
vary greatly. They provide a welcome additional source of government
income in some areas, but that's the price of doing business, home-based
or not.
A third consideration is whether you live in an area
governed by a homeowners' association. There are cases in which
a city will license a home-based business, but the association will
ban the activity. And be aware that even without an association,
neighbors sometimes may be unhappy with the operation of a business
down the block.
Fourth, don't forget about sales taxes. If your business
is selling products to consumers over the Internet, you are liable
for collecting the sales tax from any customer who resides in your
state and has the item delivered to that address. Check with your
state's tax officials for more information about specific sales
tax requirements (percentage, filing and payment methods, etc.).
You can find links to your state's revenue office in the individual
pages of Bankrate.com's
state tax roundup.
While you're Internet surfing for state sales tax
information, also visit your city's or county's Web sites to learn
more about local business registration requirements. The National
Association of Counties has a comprehensive Web site where you
can search for your locality's codes and ordinances. At the city
level, the National
League of Cities' site is a reliable municipal source for finding
your city's regulations. I checked two state sites using the State
Leagues search option, and the results for both provided a directory
of all member-city Web pages.
Finally, it also is a good idea to check the Internal
Revenue Service Web site for information about home-based businesses.
Specifically, download Publication
587, Business Use of Your Home, for information that
can save you on tax liabilities.
I wish you well.
-- Posted: Aug. 16, 2001
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