Industry Retooling in Response to COVID-19

In response to the daily disruptions caused by the COVID-19 pandemic, the service sector continues to provide necessary services and supplies. Many companies across the country have chosen to retool their business models to both meet current demand and operate more effectively in the present environment. LicenseLogix is monitoring two major industries where businesses are shifting their operational priorities in the fight against COVID-19: The commercial cleaning and hand sanitizer industries.

Commercial cleaning has seen a significant spike in demand as a result of COVID-19. In order to meet increasing demand, existing cleaning services have opted to expand their operational footprint while new companies are beginning to emerge in the commercial cleaning industry space for the first time1. Whether existing or new, commercial cleaning businesses are required to register for state sales tax, and in many instances, they must procure a municipal business license. Similarly, businesses shifting their operations to commercial cleaning are required to update existing licenses and tax accounts. Companies with business licenses must also file updates to reflect all activities conducted by the company. Additionally, it is important to note a commercial cleaning contractor license requirement exists in certain states. Regulatory hurdles do exist – whether it be a license, permit or tax – and it is imperative to be aware of such hurdles. LicenseLogix is fully equipped to update your license to reflect any operational change or apply for a new license type should your business require it. LLX can also conduct research as to whether a specific industry license requirement now exists for your business.

Other business shifts are appearing in surprising areas. It is not every day that the Dirty Water hard liquor distillery in Plymouth, MA receives purchase orders from the IRS, ATF and FDA2. Dirty Water, much like thousands of other distilleries throughout the country, has pivoted from an operational focus of spirits to hand sanitizer in an effort to help frontline workers, government agencies, and the public combat COVID-19.

Businesses shifting their operational focus to hand sanitizer production will likely encounter strict approval and permit requirements, although some of these regulations have been revised to accommodate businesses that already hold a Federal Distiller Permit. The Alcohol and Tobacco Tax and Trade Bureau (TTB) exempted permittees from obtaining formula approval if they are using a formula consistent with World Health Organization (WHO) guidance. In addition, Congress temporarily eliminated a tax on alcohol production used for hand cleaners. To qualify for the exemption, the product must adhere to updated FDA Guidelines, which requires firms to register their facility and products in the FDA Registration and Listing System. LicenseLogix can assist with this filing requirement as well as any businesses applying for or updating TTB Distilling Permits.

The shifts in the distilling and commercial cleaning sectors are just two examples of industry adaptation during the current global pandemic. Since the initial outbreak of COVID-19, dozens of industries have reformulated their business models in an effort to assist the public3,4. If your business is thinking of shifting its operational focus and/or you have any questions regarding business license compliance, please contact LicenseLogix today.


1 https://www.delawareonline.com/story/news/2020/04/02/disinfecting-cleaning-business-thriving-during-coronavirus-pandemic/2907088001/

2 https://www.atlasobscura.com/articles/do-distilleries-make-hand-sanitizer-covid

3 https://fortune.com/2020/04/21/coronavirus-pandemic-covid-19-live-events-companies-temporary-hospitals/

4 https://www.cushmanwakefield.com/en/insights/covid-19/retooling-manufacturing