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

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

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

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