Recently I applied for and obtained a home business license. Didn’t know you needed a license to run a business out of your home? Neither did I, until recently.
My journey of discovery started when I relocated my small business from Ohio to Florida.
I decided to seek certification from the state of Florida as a woman-owned business. While completing the application, I was asked for evidence of my business license.
At first, I assumed that since I run this business out of a home office, no license would be required. You see, back in Ohio I didn’t need a license.
‘Why would I be required to have a home business license,’ I thought? No employees work out of my home office, except myself. No clients visit. I don’t have any inventory or business equipment on site other than a small amount of office supplies, computers and other things you’d find in a typical home office. I don’t even receive company mail or packages at my home — it goes to an outside mailbox. Why should it matter what I do inside my home, if it doesn’t affect the community outside my home?
That’s what I thought.
However, since I was new to Florida I decided to dig a bit further. And I soon discovered that my county in Florida in fact requires a license for a home business.
Yes, you got that right. If you run your business out of a home office — even if it’s just you, a desk and a computer — you’re required to have a home business license in Collier County, Florida.
It’s Hard to Find Out About Home Business Licenses
The hardest part about home business licenses can simply be the process of finding out whether a license requirement pertains to you. And discovering where and how to apply.
This was the hardest part when I got my home business license. Half of my time was spent figuring out that indeed there was a license requirement. Then I had to locate the correct forms online and file them.
In many states, you may have to do some real digging to discover this. Business license requirements vary from city to city, and county to county. Unfortunately, there is no single free website or database with all local licensing requirements.
You can’t depend on your state government website to tell you about home business licenses, either. Here’s why. When you go to the state website to search for “business licenses” you most likely will find a list of industries that require a license from a state board. And “home business” probably won’t be one of those industries.
That’s exactly what I found when I visited my state website. I found a list of industries that are regulated by the state. Since my industry (writing and knowledge services) didn’t fall into any of those that are regulated by the state — such as CPAs, barbers, harbor pilots, home inspectors and the like — I assumed we were scot-free.
Home business licenses typically are local — very local. That’s because home business license requirements tend to be about local zoning ordinances and local business taxes.
In my county, the local business license has nothing to do with what’s regulated at the state level.
In short, home business licenses are a matter for local government, not the state of Florida.
Do I Need a Home Business License?
The best way to discover if you need a home business license is to call your local government offices.
If you live within city limits, this usually means city offices. If you live outside the city limits, it typically means the county (or parish in Louisiana).
You could try a Web search, but you may not find anything even if a home business license requirement exists. This could be due to any number of reasons. The city or county website simply may not contain the information. Or the website may list the license under a different name, such as “professional license,” “business tax receipt,” “home occupation license” or “occupational license tax.” Or the information could be buried deep under a specific department’s web pages that you didn’t think to look at, such as the tax collector’s department.
That’s why a phone call can save time. It also leads to a more reliable result.
To find out if you need a home business license, call the main number of your local government. Ask to speak to someone who handles business licenses. In the alternative, ask for the zoning department. Or you could check with the Reference Desk of your local public library.
Once you find someone knowledgeable, they can point you to forms and how to apply for your business license.
My county has created a YouTube video  outlining home business license FAQs. However, don’t expect most local governments to be quite so informative.
Isn’t There An Easier Way to Check?
I know what you’re thinking: there has to be an easier way to check for home business licenses!
I tried the SBA.gov website, which has some information on licensing. But all the SBA site did was refer me to my state’s website (which wasn’t helpful for local licenses).
Municode is another site that looks useful at first glance. But I didn’t find it helpful for this purpose. Municode contains a searchable library  of local laws for around 3,000 cities and counties across the United States. You could try it, but those without legal training may find Municode tough to understand. It’s legalese. Also, Municode doesn’t contain the laws for all 20,000+ counties and cities in the United States.
Then there are private companies online that for a fee claim to find all licensing requirements for you. However, there are three issues with private services:
- First, you have to pay a fee to use such services, in addition to any licensing fees.
- Second, there’s no guarantee they cover home based businesses. Read their Terms carefully and you will find most make no guarantees.
- Third, you may not discover the important nuances you only learn by talking with local government officials. Licensing forms can be confusing. For example, at first I thought I needed to file a different form, but a phone call cleared up my confusion. It really pays to talk with local government officials yourself.
Applying for a Home Business License
Once I discovered the home business license requirement, applying for it was not difficult.
I downloaded the license form. It was a couple of pages, with just a few sections to complete such as name, address, type of business and similar data. Pretty easy stuff.
I then took the forms in person to the county offices. Once there I met with someone in the zoning office, who verified that my type of business would not violate zoning ordinances. Once the zoning department signed off, I walked my application to the business tax department in the same building.
The home business license cost $80. I showed my driver’s license, wrote a check, and got my home business license on the spot. All in, it took about four hours:
- 2 hours – Research to discover the licensing requirement. Searched online. Made phone call to county offices. Watched license FAQs video twice. Then had to fill out and copy the form, and look up my state business registration (required).
- 1 hour – Driving time to and from the county offices on a busy Friday.
- 1 hour – Applying with county officials, including wait time.
Each year I will have to renew the license for a fee of $30. So not too expensive.
But it took almost half a day of time to comply with this one little regulatory headache. And since I’m the business owner, I don’t get a paycheck for my time. In fact, I had to work on the weekend to make up for lost time. Imagine what it must be like for owners who have more complex regulatory burdens!
No License, BUT Still Subject to Zoning and Tax Laws
What if your jurisdiction does not require a license? Does that mean you no longer need to worry about your home business?
No. You’re not off the hook.
Even in the absence of licensing requirements, you still have to comply with zoning laws. Zoning laws tend to restrict anything that could impair property values or the peace and quiet of a residential neighborhood.
Zoning laws across the United States may specify what kinds of businesses owners can operate from home. They may go as far as specifying permitted professions.
Zoning ordinances may also restrict visitors, equipment, business activities, deliveries, noise, noxious odors and other factors that disturb neighbors or lower property values. Let’s look at two examples to see how zoning laws may apply to a home business:
- Example 1 — Joe opens a landscaping business from his home. He has employees coming and going. Piles of mulch are stacked in the driveway among the lawnmowers and trimmers. Joe parks his trucks overnight in the street. In most residential neighborhoods, this sort of activity will get Joe a zoning citation.
- Example 2 — Sam is a freelance software developer. He works quietly in a home office writing code. He has no employees, no business equipment, no business deliveries. In Sam’s case, zoning laws may be no problem.
When you violate a zoning law, you could face fines, orders to desist, or worse. It’s always best to check, to avoid expensive consequences.
Check for local tax requirements, too. For example, tangible personal property laws may apply, taxing all home business equipment  you have. There may be an exemption up to a certain dollar level or home businesses may be exempt. It all depends on your local tax laws. The point is, you must discover what applies to your business.
Don’t Forget Your Homeowner’s Association
There’s one other place you should check. And that’s your Homeowners Association (HOA).
See if anything in your HOA documentation restricts home businesses. When I searched my documentation and talked with my HOA manager, I discovered that our development is silent on the topic of home businesses like mine. There are no restrictions. I am not sure what I would have done had I discovered restrictions affecting my home business. Luckily I didn’t have to cross that bridge.
Many HOA documents are silent. Still, you should check.
Some associations will be more strict than others. One homeowner who was hosting crossfit training sessions for neighbors in his garage was accused of operating  a business out of his home in violation of HOA rules. Both sides resolved that dispute eventually. But you may not be as fortunate, if you leave it up to chance.
Images: Shutterstock, Small Business Trends