Tuesday, February 07, 2006
Writers and working from a home office: sometimes zoning laws can matter
At this point, it’s useful to provide a functional decomposition of just what zoning means with respect to “work at home.” In many cases, a person will get a business license from his or her locality, and may very well pay some local taxes based on income from the business, or may have to pay tax on physical property (computers, vehicles, equipment) used in the business. The taxes may be very low for small businesses, or may not kick in until a certain income stream is reached. The license will normally be associated with an assumed name (or assumed business name) legally registered with the local and/or state government. The assume name is recognized by financial institutions, vendors, creditors, and other stakeholders. Registering a business license and an assumed name must take place, for example, if one wants to self-publish or self-distribute a book that one has authored, or even a small independent film that one has made. (The ISBN system for books is keyed to these names.) Registering an assumed name (even if that name is used only as a domain name on the World Wide Web and is properly registered with an ICANN-recognized registrant) will help protect the business owner from possible trademark infringement claims (although the name might have to be registered separately in every state if the product is shipped to every state (even electronically by the Internet), usually not a practical option for a small business.) The business, wherever it is operated, normally must comply with zoning laws, and if it is operated from the home or apartment as a home based business, the business owner usually needs a home occupation permit (and often a sales tax permit from the state). However, the converse is not true. A home occupation does not necessary imply the existence of a business entity (proprietorship, partnership, or corporation). A free-lance writer who submits articles for publication to third parties and gets paid at least once for such a submission and who created and submitted the work from home technically has a home occupation. (So would the writer who at any time in the past got his or her own ISBN under a business name or even his or her own name—which is allowed—to publish a book.) A locality like LA, Chicago or some New Jersey communities known to have pursued writers in the past, would likely follow a “don’t ask don’t tell” rule on home occupations that don’t have separate business names—they would be likely to act or even find out only if another party complained (and such a party could be a competitor, a person who lost a “real” job to the freelancer, a heckler who did not like the person or what the person says or exposed, or even in some cases a family member who feels insulted). Therefore, zoning laws could be invoked for reasons that have little to do with the actual residential values of the property where the person works. Of course, a home occupation that actually does affect the neighborhood (with traffic, hazardous materials, appearance, and the like) would easily attract attention of zoning regulators even without the need for a business license.