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Text File | 1997-09-11 | 8.7 KB | 204 lines

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

IN GENERAL.  Almost any kind of business activity you
engage 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 businesses,
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 obtaining necessary
federal and state licenses, these requirements usually relate
to educational attainments, experience in the particular
field, passage of examinations, submission 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 county
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 impact report
before you can build or do other preparatory work.

FEDERAL LICENSING.  Some of the federal licensing
requirements 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
transport as a common           Commission
carrier

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
broadcasting                    Commission
____________________________________________________________

@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 Transportation
Agency licenses various financial institutions through its
Banking and Insurance departments; real estate firms through
the Department of Real Estate; and the manufacture,
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
Transportation Agency, as well.

Local business license taxes in California cities and
counties are often in the form of a flat fee or a percentage
of payroll.  However, many of the larger jurisdictions,
including Los Angeles, San Francisco, Sacramento, Oakland
and Fresno, have adopted license taxes based on the gross
receipts of the business (or, in some cases the higher of
a tax based on gross receipts OR payroll).  There are
usually only a few, limited deductions from "gross receipts,"
for purposes of computing such taxes, such as "non-business
income," like interest or dividends or sale of business
assets, and other items like federal excise taxes.  Be sure
you don't overlook any such deductions, which may be
important in reducing 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
interpretation 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.

@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 mundane
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: CA DC
@CODE:EN
                   @STATE LICENSING REQUIREMENTS

The state also licenses a great number of business activities
and professions, as well as the most obvious ones such as the
medical, dental, and legal professions, and various financial
institutions.  If you feel there is any possibility 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 particular type of business.

@CODE: NV
Nevada imposes a Business Privilege Tax on firms that
operate in the state.  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 full time employee per calendar
quarter.  The number of full-time employees is determined
by taking the total number of hours worked by your employees
in the quarter and dividing by 468.  Certain qualifying new
businesses may have the tax reduced in their first four years
of operation as follows:

    Time Period                Percentage Tax Reduction
    ------------------------   ------------------------
    First 4 quarters                     80%
    Second 4 quarters                    60%
    Third 4 quarters                     40%
    Fourth 4 quarters                    20%

To qualify for the reduction of the tax, a business located
in a county of 35,000 or more in population must have at
least 75 employees on the payroll and $1 million in capital
investment by the fourth quarter of operation.  These
amounts are reduced to $250,000 and 25 employees in smaller
counties. NEV. REV. STAT. Sec 364A.170(2). In addition, the
type of business must be approved as one that is consistent
with the Nevada Commission Economic Development's plan for
economic diversification and development.

An employer's tax liability is limited to a maximum of
$100,000 per calendar quarter.

Also, you may not conduct a business in Nevada unless you
first obtain 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, is 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 is 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 commencing business activity.

@CODE:OF