In this video, we'll explore whether you need a city business tax receipt and if so, the key questions you'll need to answer. We'll be using Amy's web business as our example. Note that this process is the same for both sole proprietorship and LLC business. You will see the video repeated in both chapters. If your business is located within the city limits, you'll generally need a city business tax receipt. But if your business is in an unincorporated area outside the city limits, you most likely won't need one.
But remember, these rules change from state to state, so you'll have to call your local city office to confirm their specific policies. So, how do you find out if your business is located within the city limits? You'll need to conduct a property address search. Let's try this for Amy's web business. First, we'll need to check whether Amy's proposed business address, in this case, her house, is located within the city limits of Orlando.
A quick Google search shows that Orlando is in Orange County. So now we can go to the Orange County property appraiser website and and do a property search. Now, we'll click on Search and type Amy's home business address. The results show that the property, it's located within the city limits because it says municipality Orlando. However, if the property was outside the city limits, the results will say municipality Un-Incorporated. Since Amy's business is located within the city limits, she will probably need to apply for a city business tax receipt, but she should call the city business office to confirm this. Let's look at the typical requirements on a city tax receipt application. You will generally need to enter a business name, business start date and business address. In addition, most cities will ask for your fictitious name registration number if you used one, and the federal employment identification number. Furthermore, if you own an LLC, you may have to provide a copy of your LLC articles of organization. All applications have a section where you describe your business type. You'll want to use a short description like web design and development. After providing the business information, usually you will have to provide the owner's information, including things like owner's name, phone, address and driver's license number.
Applications may also include a section for the fire department. In most cities, commercial buildings will require a fire department inspection. However, most home offices are exempt from this inspection. Even if the fire inspection does not apply to your business, you might have to provide the information about your home office, like square footage, number of fire alarms and property owner information. The application might also include a section for planning and zoning.
Cities are generally divided into different zone districts, which allow different kinds of business activities. If you are using a home office, your zoning probably will be residential and you probably won't have to worry about zoning approval. Each county has its own zoning policies, so please check with your local city office about rules and regulations in your area. All city tax receipt applications have a section for state licenses and certifications. However, you can skip this section because web designers and developers don't currently require a state license or certification.
If you're applying for a home business license, the city might ask you to fill out a separate home business application or affidavit acknowledging the limitations of a home office. For example, some common office limitations are maximum square footage, making changes to the exterior appearance of the building or adding a sign, storing inventory on site or having business clients visit the home. The city could also ask for additional documents, like a notarized letter of approval from the property owner and a floor plan of the home showing the dimensions of each room and the area to be used for the home business.
Finally, you will have to submit the city tax receipt application and pay the fee. Generally, fees are based on variables, such as square footage and number of workers. Once the application is reviewed, the city will let you know if it has been approved and how you will receive it. Usually, city tax receipts are delivered by mail. City business tax receipts need to be renewed annually. Even though the city should send you an invoice when the expiration date approaches, make sure that you mark your calendar to have enough time to submit the renewal paperwork.
Late payment penalties are applied to any unpaid business tax receipt renewal. Remember that if you don't receive an invoice, it's not an excuse for non-payment. After receiving a city business tax receipt, you might have to apply for a county license or tax receipt as well. We'll cover these in the next video.
- Understanding your business-structure options
- Choosing your business structure using five key questions
- Establishing business names and fictitious business names
- Obtaining local licenses and permits
- Applying for city/county tax receipts
- Opening a business bank account
- Understanding state and federal taxes