End of the Year Housekeeping for your Business
With the New Year approaching, now is a great time to review the health of your business. Make sure you are in compliance with all necessary license requirements so your business can be more productive next year. Any business operating without a license, or with an expired license, may be subject to penalties, such as harsh fines. LicenseLogix can handle all of your business licensing and compliance needs while saving you time and money.
Here are some things to consider as the year comes to an end:
Did you begin transacting business in another state?
If you have been doing business in another state, you may need to register your business entity in that jurisdiction. This process is known as foreign qualification. In order to register you will likely need to file a Certificate of Authority or Authorization to Transact Business from the Secretary of State. You will also need to assign a Registered Agent in the new state and you may be required to register and pay for the applicable state fees and taxes.
Did you hire a new employee?
There are many steps required to make sure you are compliant with federal and state regulations after you hire a new employee. In order to be compliant with payroll taxes you will need to set up a withholding tax account and a state unemployment tax account (SUTA). Employers are required to withhold state and federal income taxes as well as social security and Medicare from their employees’ wages. Employers are also required to pay social security and Medicare taxes and State and Federal Unemployment Taxes. Businesses must also have the proper payroll tax accounts and ID’s established within a state where your business has employees. The required application process for each registration varies greatly from state to state.
In addition, if you have hired an employee who lives in another state, you may have to foreign qualify in that state as well as obtain any basic business license needed within the jurisdiction where they are operating. Whether or not a basic business license is needed is determined through analyzing numerous factors that vary between states, counties, and municipalities.
Did you begin selling a new product or service?
Your business may be required to collect sales tax on your new products or services. Sales tax is generally imposed on retail sales, leases, rentals of most goods and on some services. The United States contains an estimated 11,000 sales tax jurisdictions and the requirements of each are subject to periodic changes. Only a few states do not collect a sales tax (AK, DE, MT, NH, OR). To legally make taxable sales, you will need a Sales Tax ID Number which enables your business to collect the required taxes, be issued sales tax exemption and/or obtain resale certificates. A local business tax certificate may also be required for all businesses operating within a city or county. This tax certificate is used to identify and collect local sales and use taxes. Your business will also need all the applicable licenses and permits on any regulated products or services you may be providing such as food, drugs, cosmetics, tobacco products, or medical devices. This is not an exhaustive list and is dependent on your industry.
Have you opened a new business location?
A business that is expanding into other states may need to apply for Sales Tax ID number at the state and possibly county/local level. In addition, depending on where the business is operating and the type of activity it will be conducting, a business may need a basic business license in the jurisdiction where it is operating.
In addition to a basic business license, each state, county, and city differs when it comes to registering and licensing different types of industries. For example, healthcare organizations, general contractors, debt collection agencies, insurance agencies, charitable organizations, and tobacco companies each have their own specific licensing requirements. This is not an exhaustive list and is dependent on your industry.
Did you close a location?
If you have closed a business location, many states require you to actively withdraw your licenses – do not just let them lapse! You must officially dissolve your business so you are no longer liable for taxes and filings in that state. You must also cancel any kind of permit or license you hold within the state, county, and/or municipality level in the jurisdiction where you were operating. It is also very important that you pay your taxes (employment-related, income, sales, etc.) and any other debts within that state so you are not responsible for any further penalties incurred after closing.
Did you change your ownership or officers?
When certain types of material changes are made to a business, they need to be amended officially. In most instances, if you are changing the ownership or officers of your business, you will need to notify state and local licensing agencies within a specific timeframe (e.g., 30 days). In some cases, you will need to reapply for new business license. In addition, when a corporation undergoes a change in ownership that affects the structure of the business (e.g., from Sole Proprietorship to LLC or Corporation), the new organization is required to register as a new sales vendor. The former organization must file a final return and surrender the old sales tax permit.
Are all your business licenses active and in good standing?
The repercussions of operating your business without the proper license can be severe, causing a company to lose money and goodwill. When businesses are licensed in multiple jurisdictions or maintain licenses for numerous entities they can expect to have renewal dates littered all across the calendar. Before the end of the year, make sure you verify the status of all licenses your business currently holds and confirm you did not miss any renewal dates this calendar year. Our secure web-based Client License Information Center (CLiC) lets you quickly access all renewal dates and associated state fees.
There is no better time to start planning ahead then the end of the year. A year-end review will tackle the time-consuming management of the ongoing compliance requirements for your business. The licensing process can involve completing confusing applications, gathering supporting documentation from many different departments, and interacting with state and local bureaucracy. The experts at LicenseLogix can take over all license research, assembly, and filing. Our goal is to prepare everything related to the license application except the client’s signature so you can concentrate on more important day-today duties of your business.
Using LicenseLogix to handle your business licensing will remove an enormous amount of unnecessary stress from your plate, make you more productive, and save your company time AND money. Let us help you get your business off to a great start in the New Year. Call us at (800) 292-0900 for a free quote or contact us here.