Business License Compliance Thought Leadership

Current Articles | RSS Feed RSS Feed

Business Licenses Q&A: Closing a Store

 

Audience Question: Are there licensing issues involved in closing stores? Is it safe to just let business licenses, food licenses, and health licenses expire/run out?

Andrea Jaffe's Response: There are definitely licensing issues involved in closing a store, and we strongly recommend that you do not just let a license lapse and assume that if you have no activity, then there is no risk. Many municipalities require a license to be closed proactively, so that they do not keep the account active. We have seen municipalities impose late filing fees and penalties (and keep accruing them!) if a license is deemed active, even if the location has closed. Additionally, if a new business enters the premises and incurs violations, this could negatively impact your license account because the authority may associate the violation with the open license at the address that belongs to the previous business.

Joe Vitulli's Response: I completely agree with Andrea. There absolutely are issues involved with closing stores. Failure to actively close out licenses may lead to penalties and double taxation for a company. Don’t assume that you can just let a license expire. In many jurisdictions the Authority will not close out an expired license, but simply put it into a “Failure to Renew” state and charge interest and penalties and then contact a collections agency to get the money.

Editor's Note: This question actually helped give rise to a webinar that we are now planning for July 16th, 2014. It's called Launching Locations: How to Avoid Regulatory Fines When Opening Retail Stores and it will cover compliance issues both during the opening and closing of retail locations.

(Author's Note: Business Licenses, LLC hosted a webinar on June 10th, 2014. During the Q&A, the audience submitted questions. We are going to periodically post those questions to this blog along with answers from the panelists.)

By Alan Ruttenberg

Business Licenses Q&A: Do I Need a License Or Not?

 

Audience Question: I am currently working on a business license for Kansas City MO. There is confusion as to filing a business license or not. Our registered agent contacted the authority and they were not very clear. Can you make any recommendations on what I can do to get clarification or a site that I can go to that might have clear business license guidelines for this particular jurisdiction?

Joe Vitulli's Response: Kansas City has very vague and very broad license requirement. Most businesses will require a license but the category of license varies greatly. In this case, the best option will probably be to read the Code and website information.

Andrea Jaffe's Response: This is a common scenario. The person that you reach on the phone may not be completely knowledgeable regarding the requirements of imposition, especially if the business activity is “non-standard.” We always recommend that you do some background research and try to identify any potential relevant references in the municipality’s statutes. These can often be found on the municipality’s website, or at www.municode.com. Once you have that information in hand, it is a good idea to ask for the City Attorney, rather than a clerk in the licensing office, who may be able to clarify a more obscure determination for imposing a business license.

(Author's Note: Business Licenses, LLC hosted a webinar on June 10th, 2014. During the Q&A, the audience submitted questions. We are going to periodically post those questions to this blog along with answers from the panelists.)

By Alan Ruttenberg

e-Cigarettes Licenses

 

We were asked recently -- and not for the first time -- about licenses for e-cigarettes so it's probably helpful to publicly state the following:

First, based on the number of requests we get for this industry, the e-cigarette business is one of the fastest growing industries in North America.

Second, most authorities in the United States have not yet figured out the proper way to regulate e-cigarettes or the sale of e-liquid. We find that some authorities are lumping e-cigarette vendors together with the sale of tobacco products. Therefore, it's necessary for vendors to obtain tobacco related licenses, even though it is not a tobacco product. Other authorities are working out ways to regulate them without requiring a tobacco license and are in the process or coming up with specific e-cigarette licenses.

The bottom line is that while most states do not yet require e-cigarette dealers to obtain a tobacco or cigarette dealer license, some do and others will be requiring it soon.

We would be remiss if we didn't mention that one easy way to find out which authorities require which licenses is to subscribe to our License Determination Tool. It saves you a lot of headache!

By Alan Ruttenberg

Business Licenses Q&A: Limiting Nexus (Updated)

 

Audience Question: The topic of nexus has come up in different industries and companies that I’ve been involved with through the years. Has Quill or Interstate Commerce laws been used to try limiting nexus for business licenses? If so, has it been successful?

Joe Vitulli's Response: I have seen businesses try to use interstate commerce and the Quill decision to try and limit nexus, but so far they haven’t been very successful. A lot of the case law in Quill is being modified with the Amazon.com decisions and various pieces of legislation on both the federal and state levels. Everything is in a state of flux at the moment.

You can certainly try and push back but you may find yourself banging your head against a wall. The various states, county and local Authorities simply don’t care. The reality is what it is in these cases and you will ultimately need to get the license. A better bet to save your sanity may be to utilize some licensing software to better organize and research your license requirements in a given jurisdiction.

Andrea Jaffe's Response: Each jurisdiction is different, and some specifically have statutes that require a physical location in order to impose their business license. Where the statutory language is less specific, it becomes much more likely that the jurisdiction will try to use a broad interpretation regarding conduct of business activities within their borders. Remember that laws already on the books are strong tools for municipalities to use to increase their revenue (in this case through licensing fees) without creating new, unpopular, taxes. We are seeing much for aggressive enforcement and expansion of imposition as a current trend, rather than successful limitation on the part of the businesses trying to avoid imposition.

(Author's Note: Business Licenses, LLC hosted a webinar on June 10th, 2014. During the Q&A, the audience submitted questions. We are going to periodically post those questions to this blog along with answers from the panelists.)

By Alan Ruttenberg

Business Licenses Q&A: Audits

 

Audience Question: Would a company ever need a business license audit, similar to a sales tax audit?

Amanda's Response: I’d have to know what’s meant by “business license audit” and “sales tax audit.” We have a business license audit service in which we look at a company’s business activity and locations (whether office locations or service locations where services are rendered or products are shipped) and then research licensing from the state level down to the local level. Many companies utilize this product to get an inside look at the status of their business license compliance and where there might be gaps.

Joe's Response: One of the many services available to our customer is an audit/gap analysis showing all the licenses a company should have in a given set of jurisdictions. We can also perform license verifications on those jurisdictions to see what licenses a company currently has and the status of those licenses.

(Author's Note: Business Licenses, LLC was pleased to host a webinar on April 30th, 2014 to discuss emerging trends in business license compliance. During the Q&A, the audience submitted many thought-provoking questions that our panelists didn’t have time to answer. We are going to periodically post those questions to this blog along with answers from the two panelists, Amanda Mattaliano and Joe Vitulli.)

By Alan Ruttenberg

Business Licenses Q&A: Internet Sales Shipping

 

Audience Question: We recently registered and started filing sales taxes in 31 states because of our internet sales shipping to those states. Does this cause any other filing obligations?

Joe's Response: We would need to give a closer look at each state. For example, in Delaware and The District of Columbia, nearly every business that registers for sales tax is also required to have a business license.

Amanda's Response: Licensing is both business activity specific and location specific. For general retail businesses, filing for sales tax doesn’t necessarily make you subject to a local business license but you may have already been subject to a local business license (from the localities perspective) because of shipments of your product to customers within a locality. Now, because you are filing state sales tax returns, the local authority has an enforcement tool to know that you have a customer in their locality and you may be contacted because they want you to apply for a local business license.

(Author's Note: Business Licenses, LLC was pleased to host a webinar on April 30th, 2014 to discuss emerging trends in business license compliance. During the Q&A, the audience submitted many thought-provoking questions that our panelists didn’t have time to answer. We are going to periodically post those questions to this blog along with answers from the two panelists, Amanda Mattaliano and Joe Vitulli.)

By Alan Ruttenberg

Business Licenses Q&A: Occupancy Permits

 

Audience Question: Staffing companies have units commonly referred to as “onsites” where the staffing company embeds a manager at the client site to manage temporary workers. Many jurisdictions want a CO or other occupancy permit before they approve a business license. The problem is that the staffing company has no lease and cannot grant permission for the fire marshall or building inspector to visit the client site. Any insight?

Amanda's Response: In some jurisdictions there is a different application which is for “out of city” licensees. This is for companies who are not located in the city although they may have employees coming into the city or working at a client site. If there is no “out of city” form, you can use the corporate address as the business location so they know you are not physically loated in the city and then submit that you have X number of employees working at a client site.

Joe's Response: I have seen in some jurisdictions that the staffing company may be covered under the building’s CO or the client’s business license for the site, but then the staffing company gets a license for their headquarters even if it is outside the jurisdiction. It will ultimately depend on the jurisdiction to decide how they want to handle the situation.

(Author's Note: Business Licenses, LLC was pleased to host a webinar on April 30th, 2014 to discuss emerging trends in business license compliance. During the Q&A, the audience submitted many thought-provoking questions that our panelists didn’t have time to answer. We are going to periodically post those questions to this blog along with answers from the two panelists, Amanda Mattaliano and Joe Vitulli.)

By Alan Ruttenberg

Business Licenses Q&A: Canadian Address

 

Audience Question: Our head office is in Canada but I find many jurisdictions in The United States are reluctant to send licenses to Canada even though we have indicated Canada as our mailing address. They will send them to our local branches in the U.S. even though they are not set up to handle them. We end up getting them late.

Joe's Response: This is a common problem that is not unique to Canada. American companies often have a similar problem with certificates, renewal statements, and tax returns being sent to local addresses rather than corporate headquarters. This is why we employ people to hunt down copies of the renewed licenses and/or renewal forms so that our customers don’t have to do it themselves!

Amanda's Response: Yes, we see this a lot... not only with businesses who have international mailing addresses but also with businesses that are required to get a local business license for a facility that can’t accept mail. This is very frustrating for many companies and it’s definitely a data point in favor of the argument that jurisdictions are not getting smarter (an online option to print a renewed license could help).

(Author's Note: Business Licenses, LLC was pleased to host a webinar on April 30th, 2014 to discuss emerging trends in business license compliance. During the Q&A, the audience submitted many thought-provoking questions that our panelists didn’t have time to answer. We are going to periodically post those questions to this blog along with answers from the two panelists, Amanda Mattaliano and Joe Vitulli.)

By Alan Ruttenberg

Business Licenses Q&A: Subcontractor Listings

 

Audience Question: I’ve seen some jurisdictions request subcontractor listings this year. Have you noticed that from many jurisdictions?

Amanda's Response: It’s part of a broader effort to achieve greater licensing enforcement. An authority that has one company applying for a license tries to get info about other companies by requesting things like subcontractor listings and supplier lists.

Joe's Response: Many jurisdictions require subcontractors to be licensed and many others require the general contractor to be licensed even when not preforming actual work. This is an area ripe for enforcement since, in many instances, both the general and subcontractor believe the other is properly licensed.

(Author's Note: Business Licenses, LLC was pleased to host a webinar on April 30th, 2014 to discuss emerging trends in business license compliance. During the Q&A, the audience submitted many thought-provoking questions that our panelists didn’t have time to answer. We are going to periodically post those questions to this blog along with answers from the two panelists, Amanda Mattaliano and Joe Vitulli.)

By Alan Ruttenberg

Business Licenses Q&A: State Level Responsibility

 

Audience Question: I’ve started seeing local jurisdictions push responsibility to state level departments to cover business and health licensure. Do you see this as something that will be more widespread going forward?

Amanda's Response: If this is a trend, it’s not very widespread. Perhaps contractor licensing may be an area where local licensing will move to the state level. Health licenses tend to be done at the county level (especially for restaurants) but in Florida it is done at the state level. In some areas of California, counties share a lot of responsibility for health licenses.

Joe's Response: We have seen examples of this in a few different fields. Interestingly, we have also seen the reverse, where a state has local and county inspectors do the inspections. I see it more as convenience for the different authorities than a real trend however.

(Author's Note: Business Licenses, LLC was pleased to host a webinar on April 30th, 2014 to discuss emerging trends in business license compliance. During the Q&A, the audience submitted many thought-provoking questions that our panelists didn’t have time to answer. We are going to periodically post those questions to this blog along with answers from the two panelists, Amanda Mattaliano and Joe Vitulli.)

By Alan Ruttenberg

All Posts