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Licensing Requirements for Home Based Businesses

March 17, 2009

Starting a home-based business is a rewarding and flexible option for thousands of small business owners. In these turbulent economic times it is an option that is appealing to more and more people.

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 possible big fines) down the road.

Regulations vary based on your business and your 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 municipality to legally operate in that area. Registrations may apply to you if even your home-based business is outside the jurisdiction of a town or city.  Here is a helpful Business.gov tool that allows you to pinpoint the specific government requirements in your local zipcode area: The Licenses and Permits Tool

2. Professional and Trade Licenses
Some industries may have to obtain professional or occupational licenses, such as a nursing certificate or a real estate license, at the state government level. To learn more, you should visit Pennsylvania at the Bureau of Professional and Occupational Affairs  to learn more about license requirements that apply to you and to see a complete list of the occupations that require licensing in the state.

3. Home Occupation Permit
Many municipalities require all home-based businesses to get a Home Occupation Permit. If a permit is not required in your local area, the zoning office there will be able to tell you 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 a 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
In Pennsylvania, if your home-based business sells taxable goods or services, you will be required collect state and local sales taxes from your customers. In Pennsylvania you will need to have a tax account with the state. You will need to register with the state revenue agency and you can get the full details at their one-stop registration website: PA Form 100 Business Registration

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 the Pennsylvania Department of Enviromental Protection 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. In Pennsylvania you are required to be certified for food-service or food-preparation.

6. Sign Permits
Some cities and municipalities 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 comprehensive  listing of federal, state and local permits, licenses, and registrations you’ll need to run a business.  The results are specific to your zipcode.  In addition, there are many other home-based business resources for starting up, financing, and marketing your business available.

This article was adapted from one that appeared at www.business.gov

For more information, call SCORE Lancaster at (717) 397-3092 or visit our website at www.scorelancaster.org

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