Be a Legal Eagle: Federal, State, and Local Rules and Regulations
Every business in the United States, no matter how big or small, must follow governmental rules and regulations on the state and local level.
There are many different types of regulations that companies need to comply with in order to do business.
Taxes
You will have to register your business with the state for tax purposes. These regulations vary by state, but most include the following:
- Depending upon you state, you may be required to register your business and obtain tax permits. This is done through a tax agency. A permit to collect sales tax when a customer purchases a product from you is one example.
- Income Taxes: There are few states that do not have an income tax for businesses and corporations. The type of tax you will pay will depend upon the structure of your business. For example, LLCs will be taxed as a separate entity, whereas a sole proprietorship will be taxed using a regular 1040 personal income tax form.
- Employment Taxes: Other taxes you may have to do with employees. If you have employees, you may have to pay workman’s comp and/or unemployment insurance. Some states also require that you pay for temporary disability insurance. These states include California, Hawaii, New Jersey, New York, and Rhode Island, plus Puerto Rico.
City and County Business Regulations
You city and your county are likely to require a permit to operate your business.
To find out if a license is needed, you can search on the Internet using your county name and state.
You can also call your city or county’s local government office and they will be able to assist you. You might find that a license is not required.
Business Zoning?
Zoning refers to how property can be used. Common zoning categories include:
- Residential
- Commercial
- Industrial/Manufacturing
- Agricultural
- Recreational
Be sure to consider zoning before signing a lease. Different zoning requirements allow for different businesses. For instance, you would not be able to manufacture goods in a residential zone.
If you are going to set up your business in your home, you need to research local zoning laws. Depending upon your business, city ordinances may or may not allow your business in that area.
Even if they do allow you to have a home-based business, they may have restrictions such as signage laws.
You also need to look into any neighborhood covenants that may be in place. Your neighborhood rules may be stricter than the government laws.
You can find information regarding zoning and sign permits by inquiring at your local town or city planning board.
Knowing and understanding the different state and local regulations will help you set up your business correctly.
If you don’t follow the rules, you can end up in both financial and legal trouble.
Next Page:
15 Simple Steps To Establishing a Federal Tax ID Number
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