Licensing for Short Term Sales
With the 2018 holiday season approaching, businesses are gearing up for the busiest commercial time of the year. Many retailers, in an effort to maximize holiday sales, open temporary, seasonal locations, or "pop-up stores". This year, two internet giants will experiment with the model for the first time. Facebook will be hosting pop-ups in Macy’s, while the e-commerce retailer Wayfair will host numerous pop-ups in select malls in New Jersey and Massachusetts. Hundreds of more companies in the United States and abroad will also try to cash-in on this trend. While pop-ups can help your business increase visibility and revenue, there are some important regulatory hoops through which your business must jump through in order to remain compliant.
Is your pop-up store opening in a new state?
If so, you’ll probably need to Foreign Qualify in that new state. Make sure you register your business with the Secretary of State’s office before engaging in business. You will also need to register for state- level Sales Tax, Payroll Taxes, and any state-level regulatory business licenses that are applicable to your business.
Sales & Use Tax accounts need updates!
Even if you are not opening your pop-up store in a new state, your current state may require you to update your Sales Tax account with the additional location, even if your new location is only temporary. Certain states even require a new Sales Tax registration for each and every business location.
Local licensing laws can be tricky.
The city and county in which you are opening your pop-up store can have a big impact on the types of licenses you’ll need to obtain for your seasonal address. Many cities and counties have a basic business license that all businesses must obtain to operate. Temporary operations often trigger basic business license requirements. Some jurisdictions also have special permits specifically regulating seasonal pop-ups. For example, Chicago introduced a Pop-Up User License this past October. The license is designed to regulate such ventures, while also giving the applicant the option of not having to obtain a year-round Business License for temporary store-fronts or restaurants. If your business already holds a license in the locality, make sure you don’t need to add your pop-up location to that license account! If you are operating in a jurisdiction that has local sales or withholding taxes, you need to make sure you are appropriately registered.
Licensing can be particularly stressful during the bustling holiday season, but what’s far worse is losing holiday revenue to heavy fines. LicenseLogix is an expert in licensing new business operations. Let us help your business capitalize on the season. Contact a LLX guru at 800-292-0909 or get a free quote today!