DP Tool Club 12/CD_ASCQ_12_0294.iso/vrac/sba93_4b.zip/F254.SBE

Text File | 1993-10-01 | 8KB | 187 lines

        ┌───────────────────────────────────────────────┐
        │     LICENSING REQUIREMENTS FOR BUSINESSES     │
        └───────────────────────────────────────────────┘

@Q      "Never forget that the bureaucrat who smiles when
@Q       something goes seriously wrong has already found
@Q       someone to blame it on." -- Jenkins' Ninth Law of
@Q       Business Survival

IN GENERAL.  Almost any kind of business activity you en-
gage in will require a city or county business license,
which is usually fairly simple to obtain.  In addition, a
few kinds of businesses will have to obtain licenses from
the federal government to operate.  Many kinds of busi-
nesses, occupations and professions are also licensed and
regulated by the state government.  While there are wide
variations in the kind and extent of requirements for ob-
taining necessary federal and state licenses, these require-
ments usually relate to educational attainments, experience
in the particular field, passage of examinations, submis-
sion of detailed applications, meeting financial or bonding
requirements, or some combination of the foregoing, plus
payment (almost always) of a licensing fee or tax.

Also, you need to be aware of certain local city or county
permits that you may have to obtain, such as from the coun-
ty health department if you will be in the food business,
from the fire department if your business may have large
crowds on the premises (restaurants, theaters), or various
permits for construction, remodelling or zoning.  In some
areas you may also have to prepare an environmental im-
pact report before you can build or do other preparatory
work.

FEDERAL LICENSING.  Some of the federal licensing require-
ments you may encounter in different business activities
include the following:

____________________________________________________________

        ACTIVITY                 FEDERAL REGULATORY AGENCY
____________________________________________________________

Rendering investment advice     Securities and Exchange Com-
                                mission

Providing ground transport-     Interstate Commerce Commis-
ation as a common carrier       sion

Preparation of meat products    Food and Drug Administration

Production of drugs or          Food and Drug Administration
biological products

Making tobacco products         Treasury Department, Bureau
or alcohol                      of Alcohol, Tobacco and
                                Firearms

Making or dealing in            Treasury Department, Bureau
firearms                        of Alcohol, Tobacco and
                                Firearms

Radio or television             Federal Communications Com-
broadcasting                    mission
____________________________________________________________

@CODE: CA
             CALIFORNIA LICENSING REQUIREMENTS

In California, most businesses, occupations and professions
are likely to be licensed and administered by one of the
many divisions of the California Department of Consumer
Affairs.  In addition, the State Business and Transporta-
tion Agency licenses various financial institutions through
its Banking and Insurance departments; real estate firms
through the the Department of Real Estate; and the manufac-
ture, distribution and sale of alcoholic beverages through
its Department of Alcoholic Beverage Control.  A number of
activities are also regulated by various state agencies
other than Consumer Affairs or the Business and Transporta-
tion Agency, as well.

Local business license taxes in California cities and coun-
ties are often in the form of a flat fee or a percentage of
payroll.  However, many of the larger jurisdictions, includ-
ing Los Angeles, San Francisco, Sacramento, Oakland and
Fresno, have adopted license taxes based on the gross re-
ceipts of the business.  There are usually only a few, lim-
ited deductions from "gross receipts," for purposes of com-
puting such taxes, such as "non-business income," like in-
terest or dividends or sale of business assets, and other
items like federal excise taxes.  Be sure you don't over-
look any such deductions, which may be important in reduc-
ing your local business taxes.

The tax rates imposed by local taxing jurisdictions for
business licenses often vary considerably, depending upon
the type of business involved.  For example, Los Angeles
distinguishes between nearly 50 different types of business
classifications.  Obviously, where there is room for inter-
pretation as to certain types of income of your business,
it can save you money to treat ambiguous items as a type of
income having a lower rate, if you have a choice, rather
than as a type of gross receipts subject to a higher rate.

Some jurisdictions, like San Francisco, impose a payroll
tax.  San Francisco recently extended its payroll tax (ret-
roactive to January 1, 1993) to small businesses having be-
tween $100,000 and $166,667 in annual payroll, at rates of
1% of payroll or higher.  Those with payrolls under $100,000
continue to be exempt from the tax.

@CODE:OF
@CODE: HI
               HAWAII LICENSING REQUIREMENTS

The state of Hawaii has a bewildering number of licensing
requirements for businesses, occupations, and professions.
In addition to specialized activities like medicine, law,
architecture, and the like, there are also many more mun-
dane businesses (such as cleaners and laundries, travel
agencies, etc.) that are also subject to special licensing
requirements.  Licensing fees may range from a few dollars
to $1,000 or more.  For specific information on licensing,
contact the Hawaii Dept. of Commerce and Consumer Affairs,
on the first floor of the Kamamalu Building, at 1010
Richards Street in Honolulu.  Phone:  [phone].  Or,
go to the Hawaii Business Action Center (One-stop center
for all state permits at 1130 N. Nimitz Hwy., Suite A-254,
in Honolulu).  From Oahu, call the Business Action Center
at:   1-808/586-2545; or, use Neighbor Islands Toll Free
Number:  1-800/225-6723

@CODE:OF
@CODE: DC FL
@CODE:EN
                   @STATE LICENSING REQUIREMENTS

The state also licenses a great number of business activi-
ties and professions, as well as the obvious ones such as
the medical, dental, and legal professions, and various
financial institutions.  If you feel there is any possibil-
ity that the business you are entering or are engaged in
requires a state license to legally operate, contact one or
more of the major licensing agencies in the state capital
for more information on what may be required for your par-
ticular type of business.

@CODE: NV
Nevada has revised its Business Privilege Tax, effective
July 1, 1993.  Formerly, that tax was based on the average
number of employees a company had, generally at the rate
of about $25 or $30 tax per employee per calendar quarter.
The tax is now a flat $25 per employee per quarter.  You
may not conduct a business in Nevada unless you first ob-
tain a business license from the Nevada Department of
Taxation and pay a $25 fee.

@CODE:OF
@CODE: WY
Wyoming imposes an annual license tax on corporations,
based on corporate assets located and employed within the
state.  The license tax has been raised, and beginning
January 1, 1994, will be as follows:

     License Tax                    Corporate Assets
     -----------             -------------------------------
     $25 (now $10)           Not over $ 50,000
     $50 (now $20)           Over $50,000, up to $100,000
     $100 (now $50)          Over $100,000, up to $500,000
     $200 (now $100)         Over $500,000, up to $1 million
     $200 (now $100)         For every additional $1 million
       additional              (or fraction) over $1 million

   (Maximum corporate license fee limited to $50,000 a year)

@CODE:OF
@CODE: WA
With only a few limited exceptions, such as for farmers and
real estate rentals, the state of Washington requires almost
every person, partnership or corporation doing business in
the state to apply for a license and register before commenc-
ing business activity.

@CODE:OF