Working from Home

Think. Do you want your business to be based upon the location of the first person you employ? Think about your business and bank account. Will that first employee work for you forever?

A real office address demonstrates presence and commitment to the US market. A real office at which your mail and telephone inquiries are intelligently, efficiently, and economically handled. An office at which scheduled and unexpected visitors will be welcomed, hosted, and treated to informed conversation.

Even if you work from home (we wouldn’t), do not forget your business is still subject to license and permit laws. Also, if you work from home, it is generally considered more likely you will receive visits from taxation, immigration, and safety compliance officials. Sadly, it is safer not to share the address of a home office with the rest of the world.

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 a car repair business, you’ll need the same professional license that you would need if you had main street premises. Some, or all, of the following may apply to a home office business:

  • General Business Licenses. This is an annual license or permit that legally entitles you to operate a business in that locality. Typically, a fee is associated with this paperwork.
  • Professional and Trade Licenses. State governments require certain businesses or industries to obtain professional/occupational licenses.
  • Home Occupation Permit. Many cities and county zoning and planning agencies require all home-based businesses to get a Home Occupation Permit.
  • 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.
  • Health and Safety Permits. Depending on your location and industry, you may need either a permit or an inspection from your local fire department.
  • 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. Additional permits may be required.
  • Sign Permits. Some cities and towns have sign ordinances in effect that restrict the type, size, or location of signs placed on your property.
  • 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.
  • Check with Your Homeowner’s Association (HOA). While your local HOA won’t specify licenses or permits, if you live in a planned residential neighborhood or complex, the HOA can restrict the type of business activities you conduct in your home.