You are beginning your own home-operated e-business consisting of a web store or web site and you want to perform all the tasks required to properly form the business. You register the business name, fill out all the tax forms; however, now you are required to obtain a license to operate within your township. Not a problem except for the additional fees and inspections that are required to obtain the license.

Are the laws necessary, yes, but municipalities need to come into the 21st Century and realize there are exceptions to the standard criteria. Legal and banking documents require an address, in the event of a home business your residential address is required. However, the question is are you truly operating a business from your home if it is strictly e-business? My answer is no.

E-Business resources can and in many instances are not located at the residence. If you are using a web hosting service and your site is acting as a turn-key organization you will not have a server or inventory at your sight. In regard to the bank account the funds are automatically deposited and withdrawn from the account with little intervention from your residence and those accounts are tied to your social security number and not your residency. So what is the problem?

The problem in my opinion is local municipalities requirements for revenue. Many municipalities have over extended themselves and during times of economic restructuring, recession, the municipalities are not willing to let go of workers or reduce wages like the rest of the private sector. So, they need to generate revenue from any source and your home business is just the source. They do not consider you are trying to start a business in the first place so you can pay existing taxes and bills.

Municipalities need to consider another factor, the underground economy. An E-Business is very easy to take underground. It may not seem that way with the World Wide Web, but the vastness of the WWW make it very easy. You can create fictitious business names and off-shore the bank accounts. Where does that leave municipalities? The answer: shorter on revenue.

Municipalities need to bring ordinances into the 21st Century. Driving businesses underground will only hurt the local economy in the long run. Revenue can be obtained once the business starts to grow and hire new employees. Cutting “sweet” deals for larger businesses to move operations into the municipality might be a good idea, but do not penalize the citizens who comprise the community.

Just a thought,

Mike Kniaziewicz