Summertime is business license renewal season, at least where I’m located in Mount Pleasant. Does your business have a current business license and are you registered in all the jurisdictions you should be?
Basically, every entity doing business is required to have a business license before opening their doors. This is an annual fee based on activity and gross receipts. If your business changes location, ownership, or closes doors, a change form needs to be submitted to the office. Each jurisdiction has different forms, deadlines, and rates so do the research for your area! For example, Mount Pleasant sends renewals on June 20 and renewals are due July 31 each year.
Fees are based on receipts and the type of business in operation. Be sure you pick the correct classification. Once a business has been open for one year, fees are based on your previous year’s accounting records.
It is not uncommon for one business to have more than one license. If a business conducts more than one type of business from a single location, each business is classified separately. Or if there are mobile services or sales, a business license may be needed for each location of these services or sales. Be sure to check with all jurisdictions you do business in! For example, you may groom pets in Summerville as well as Mount Pleasant. You may need a license in each jurisdiction.
Any W-2 employees can operate under your business license. If you use subcontractors, they must have their own separate business license.
Refusal to purchase a business license will result in court costs, fines, and maybe even jail! There are also penalties and interest for late filings and renewals.
This is an area where you want to do your research and make sure you’ve got the correct licenses.
Have a great summer,
Jordan Ilderton, CPA