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Home-based Ecommerce Site - Home Occupation Permit (Zoning)?

     
3:28 pm on Mar 10, 2010 (gmt 0)

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Hi,

I know this will be different for everyone based on location, but for people who have a home-based ecommerce site did you ever submit an application for a "home occupation permit (zoning)" in your area?

I've known my neighbors my whole life so I hope they would not call the town/city on me, but I guess its good to be a little proactive about this.

I don't hold much inventory so I just keep it indoors, and the only issue I can ever see my neighbors complaining about would be just the FedEx/DHL vans that come by. But regardless of my ecommerce business I still see these FedEx/DHL vans come for all my neigbhor's own purchases; so I doubt they even can tell a difference. Lol...

Thank you,

olimits7
3:43 pm on Mar 10, 2010 (gmt 0)

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We did it outta our home for years and no issues. I would do one thing though. Not knowing your country but in the US I would incorporate the business and use your home address as headquaters.

Problem with the home can't get insurance unless the storage area is seperated from the home. We had about 50k in inventory so it was a risk keeping it all in the home.
4:02 pm on Mar 10, 2010 (gmt 0)

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Hi,

Yes, I'm in the US as well and I setup an LLC a while ago but just didn't know what zoning issues I would have now as a home-based ecommerce site.

Thank you,

olimits7
4:33 pm on Mar 10, 2010 (gmt 0)

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Most likely it is breaking some zoning laws but if not reported I would just keep it quiet. You just like to buy stuff online if anyone ever ask ya why fedex comes to the house everyday.
5:52 pm on Mar 10, 2010 (gmt 0)

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That's a good way to look at it; I can just be addicted to online shopping! ;-) lol...

olimits7
6:07 pm on Mar 10, 2010 (gmt 0)

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Except that the neighbors will want to know why FedEx picks up more than it drops off. You'll just have to say you like returning a lot of stuff. :)

Seriously, though, you should also look at your HOA's bylaws and the CC&Rs [en.wikipedia.org] to make sure you're not violating any of those. Less teeth than local zoning laws, but one nasty neighbor could really make your life miserable.

I would NOT use my home address as much as possible in regards to the corporate address. Especially if you are trying to stay under the radar for local zoning laws. Unless, of course, you want irate customers to know where you live.
6:23 pm on Mar 10, 2010 (gmt 0)

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Most areas have "home business" regulations. You'll want to check into those. In most cases it is the street traffic (ie., customers) to the location that will get you in trouble, not FedEx or UPS.
8:01 pm on Mar 10, 2010 (gmt 0)

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If your city requires a business license, you may as well get it. Most cities require a business license to operate a legitimate business: home based or not. (Although many cities do not check for this, and policing home based business licenses is difficult)
5:20 am on Mar 12, 2010 (gmt 0)

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I've operated a small mfg operation and e-commerce store from my home for 10 years. Never got a city business license, just the state license. The way I see it, the city does nothing for my business - it would be different if I had a B&M store.
6:01 am on Mar 12, 2010 (gmt 0)

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Be aware that if a home based business is subject to a tax audit, it's a routine item for the auditors to look for receipts showing that applicable local license fees have been paid.

If you have dodged the city rules and regulations that apply to home based businesses, expect the auditors to apply your own logic to your whole business, and disallow many or all of those home office expenses and related costs that you've been claiming as business expenses.

That could get really icky, really fast.
8:44 am on Mar 12, 2010 (gmt 0)

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Absolutely worth checking out what regulations apply, if you're serious about developing the activity beyond hobby status, and have any substantial investment in inventory. The last thing you want is to lose your stock because you left the oven on, or build up a successful business, then have the authorities come and shut it down and slap you with a big fine for not having done the leg-work beforehand.
3:49 pm on Mar 12, 2010 (gmt 0)

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Be aware that if a home based business is subject to a tax audit, it's a routine item for the auditors to look for receipts showing that applicable local license fees have been paid.


You think the IRS gives a damn about enforcing some pissant burg's ordinances? Is the IRS also going to see if you have a building permit for that illegal toilet you added? Or too many pets in your home office (sadly, we may violate that ordinance)

What jurisdiction are you talking about? What country? Maybe a state tax audit.
11:55 pm on Mar 17, 2010 (gmt 0)

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A) Get a good accountant, tax issues solved. Home based small businesses are much more likely to get audited than SB's with an office. Forget about being reported to the local muni, you just dont want the audit to begin with
B) Dont ask dont tell. The less anyone knows the better. As long as you dont have customers going in and out of your house, you'll be fine
C) Insurance - As bwnbwn mentioned, this is a major problem. I wont tell you how much inventory we have in our house, but its worth more than the house. We're actually considering getting a warehouse this year for the sole purpose of insuring our product
12:33 am on Mar 18, 2010 (gmt 0)

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about enforcing some pissant burg's ordinances


That's not the point.

It's not about enforcing local laws or snitching to local authorities, it's about the fact that tax auditors are certain to interpret whatever inconsistencies they find in a way that benefits them, not you.
12:56 pm on Mar 18, 2010 (gmt 0)

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The way I understand it, it very much depends on what kind of zone your place is in. It might look purely residential but be actually mixed commercial/residential use. That's what my street is, even though there are no public places of business on it. In that case, where I live the only issue is whether you are creating a public nuisance with a lot of traffic, smells, toxicity, and so forth. But that would apply really to anyone, not just a business. So if I were you, I would first find out exactly what kind of zone you are living in. Usually your city will have maps online or you can call city hall. I did this and it set my mind at ease so that when someone threatened me, implying I was not allowed to run a business out of my home, I knew that legally I was fine and could tell him to go jump.
4:48 pm on Mar 18, 2010 (gmt 0)

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Tons of good responses here. What I do is set-up a UPS Store mailbox and list that as my business address. As far as shipping goes, I load up my orders for the day and drop them off at the UPS store. No FedEx trucks in the neighborhood and the neighbors don't know any different.
7:24 pm on Mar 18, 2010 (gmt 0)

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Check with city hall and the county. There should be previously established laws for running a home based business in your area. You may need to pay a small fee for a local license on top of your registration with the state. The fee in my area is based on the number of employees.

Best of luck! We were home based before we outgrew the house and had to buy a proper warehouse. Makes offloading those palletts of shipping boxes and merchandise much easier...