February 20, 2008, Lighthouse Point, FL—The City of Lighthouse Point is one of a few Florida cities that have avoided changing regulations to allow issuing a Business Tax Receipt to home-based businesses. Citing legal and neighborhood concerns, the issue has been raised and tabled during the tenure of the last three mayors.
Probably spurred on by new state regulations in 1996, most cities have now adopted a ‘limited use’ business tax receipt. In 2006, the Florida Legislature changed ‘occupational license’ to ‘local business tax receipt’ in response to misrepresentations by contractors to consumers following damaging hurricanes. The Legislature found that some unscrupulous persons presented local “occupational licenses†to consumers as proof of “competency†to perform various repairs and services. By changing the name of the item issued by local governments from occupational license tax to local business tax, they hoped to reduce fraudulent misrepresentations.
The City of Lighthouse Point business ordinance requires a business meet all local and state regulations, including having a business tax receipt. Currently, the city issues a Business Tax Receipt on a limited basis to home-based businesses, if the business meets certain parameters. The applicant must also sign an affidavit and provide proof of purchase for leasing a local commercial mailbox service where the Business Tax Receipt will be publicly posted. By posting the Business Tax Receipt in a commercial enterprise, ostensibly the business is ‘located’ in a commercial zone. The Affiant must also state they are not operating a business in violation of current zoning laws, which forbid businesses from operating in a residential zone.
Research: Random survey of 22 Florida cities:
77% have a specific Business Tax Receipt for Home Businesses
14 % do not have a specific Business Tax Receipt for Home Businesses
9% not determined
Ironically, the only cities found to not have a specific policy are Deerfield Beach, Pompano Beach, and Lighthouse Point. While the revenues may be small in relation to big city budgets, at the common rate of $50 per business, 100 businesses equals $5000, a nice sum in any case. Businesses need a Business Tax Receipt to comply with local, county and state regulations, for membership in the Better Business Bureau and in some cases, to obtain certifications such as Minority Business Certification. Ultimately, creating a Business Tax Receipt for Home Businesses may increase consumer protection, spur local business growth, and increase local city coffers.
Armed with the new state regulation, community requests, and the desire to regulate home based businesses, cities including Pembroke Pines, Fort Lauderdale, Boca Raton, Clearwater and Davie have already created a special tax for home businesses. Most cities are using nearly identical language on their applications restricting business operations to have minimal neighborhood impact. No goods may be sold out of the residence, deliveries are restricted, and no employees on site are just a few. With advanced technologies increasing the number of home based businesses, it’s time our local cities also updated regulations to match the reality of the world we live in today.