Ask WAHS Leslie: Home Business Legalities

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Dear WAHS Leslie,I would like to start a home business but I'm confused by all the procedures. How do I get a license or permit? What does it cost? What other legalities do I need to take care of? Carl in PA

Hi Carl,
There is no one answer to your question. Every city and county has its own policies on regulating home businesses. For example, in one city, I had to get a business permit but when I moved to a new area, I wasn't required to get one. Nevertheless, in my new town, I was required to pay business personal property tax. Either way, they get a cut of my profits.
There are four bits of information you need to find out about for running a home business in your area: 1) Business license or permit; 2) Sale Tax Permit; 3) Zoning, and 4) Doing Business As announcement.

The best way to find out about the rules in your area are to contact your local city or county government. Check your phonebook for the the listings under your city or county. Every area has them listed differently. Look for business licenses or it may be under licenses, businesses. If its not clear, see if there is an information line or contact your local Chamber of Commerce or Small Business Administration office for help. In my experience, business licenses or permits cost about $50 and then each year require some extra money based on the business' earnings.
You will need a sales tax permit if your state or local area charges sales tax AND if you sell tangible goods. In most cases, services are not taxed and wouldn't require a sales tax permit. Again, its best to contact your local authorities regarding this. Hopefully the business permit office will be able to at least give you information, but sometimes the sales tax permits are given through a different office.

You will need to check the zoning in your area. The business license office should be able to help you with this. Or contact the Zoning Department in your city or county. Many areas still ban home business in their zoning ordinance. In this case, you should be able to get a waiver as long as your business won't increase traffic on your street, won't require a sign, and doesn't involve dangerous or disruptive (loud or smelly) materials. One more thing about zoning, if you rent or live in an area with a home owners association, you may be required to get permission before running a home business. Check your lease or HOA policies.

Finally, if your business has a name other than your given name, you will likely need to fill out a "Doing Business As" (DBA) form which will be run in your local paper. This is something else your local business office should be able to tell you about although you may need to go to a different office to complete it. In my experience, this cost about $10.

It is important to check out the home office laws and ordinances of your area. If you run your business without the proper permits or adhering to the laws, you could set yourself up for trouble should a neighbor complain. In most cases, the process is painless once you find the right office of your local government to help you.

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Ask WAHS Leslie is Leslie Truex a stay and work-at-home mom who has been helping people work at home since 1998 with her website Work At Home Success. She is also the author of Jobs At Home: A Complete Guide to Finding a Work-At-Home Job. Ask WAHS Leslie is a weekly column. You can submit a question to Ask WAHS Leslie by emailing here.