Chapter 20
Licenses, Permits, and Sales Tax
The first thing you need to do is to get all the licenses and permits that are required by your local and state government in order to do business legally. This includes paying state sales tax. In this chapter I will cover those permits that apply to mobile food service vending.
I will not be covering the broader but essential subjects of how to register your business with the state and federal government or how to file and protect your company name. These topics, along with choosing a business legal structure, setting up a bookkeeping system, paying federal income tax, and hiring employees is covered in detail in the companion book, “Hot Dog Profits: Business Management Made Easy”.
License and permit requirements vary so much from state to state that it would be impossible to list them here. The best I can do is tell you what I needed, and then point you in the right direction so you can obtain the correct information for your area from reliable sources.
I can tell you that in my area I need a City Business License, a County Merchants and Manufacturers License, a Health Department Permit, and a State Sales Tax Certificate.
The best way to find out what you need is to go to your city clerk’s office and ask. The local Chamber of Commerce is also a good source of info. And definitely visit your Secretary of State’s website. Most states have a “Starting a Business” section that lists all the requirements at the state level including how to pay your sales tax.
Here’s a tip. When registering for a sales tax certificate, the state will usually require you to post a bond based on your projected quarterly sales. Since you are a new business, this is just a guess. Guess really low, like $750 a month. This will drop you into the lowest bracket and your bond will be minimal.
Hi STEVE. I am trying to get my business license, is it wise to say that I will be doing small venues, like birthday parties and carnivals to start out when I go to get license?
Yes Jaime, that’s a good way to go. Sometimes the city will ask you where you will be setting up. If you don’t have a location yet it’s best to say you will be doing parties and special events. That leaves you flexible. Good question!
Thanks for the reply. Another question, would the same regulations apply for counties within the state or is it the same throughout the whole state.
Many are county or even city level. For example, your sales tax is paid to the state but the percentage is based on your city.
Steve,
What if I am legal in Indiana but got to my friends plant which is private property but in Illinois. Would I still need a local permit?
Yes, you would at least need a health permit and vending license. Illinois wants it’s money too.
hi steve I am living in Toronto Canada . not much too say yet , just reading and learning. I think it is great course, loads of information. can’t wait too get started, talk soon thank you.
Glad you like it Wade!
what are all of the permits needed to start other than the health dept and peddlers permits from each of the towns?
It depends on your local codes. Start by asking down at city hall. They will have the info you need.
Any help in the process of starting permitting a hot dog cart in Polk county Florida would be welcome. As in where to start. Thanks Hal and Jess Becker
Start by going down to city hall and asking what permits you will need and who issues them.
Hey Steve in my state they are requiring me to have a Commissary ( which cost $400 per month) to store my food for the night because I can not have it at my house. They are requiring me to get one even if I buy food from day to day. So how do I factor that in my prices or do I just have to eat that cost for now or is they a way to claim it in the tax return. I am trying to get everything set up still. I am in the planning stage and I don’t want to over charge the customer but at the same time I don’t want to be losing too.
Hi Christopher,
Allow me to share my personal commissary strategy. I think it will help you satisfy the commissary requirement for free.
A commissary is nothing more than a health department approved kitchen. It could be a restaurant, bar, church, VFW Hall, donut shop, etc. All you need is a letter to show the inspector that says the facility agrees to let you use their kitchen.
Here’s how to get that letter:
If you approach a local restaurant and just ask to use their kitchen, what’s in it for them? Not much. Even if you offer to pay them rent, the tiny additional income doesn’t make it worth it.
The whole key is to remember everyone’s favorite radio station, wii fm (what’s in it for me?)
What does every business want? MORE CUSTOMERS!!!
What do they have to do to get more customers?
They have to advertise and that’s expensive!
You just have to think about it a little differently – from their perspective. What’s in it for them?
Don’t even talk about rent, talk about how you happen to have advertising space available on your cart and promotional materials…
On the fliers you distribute, on the rear window of your tow vehicle, and on the menus that your customers will post on bulletin boards in their break rooms at work – all over town!
Tell them that thousands of people each month will see it and ask them how much that kind of exposure would cost them in traditional advertising? Thousands.
And you’ll do all this for them FOR FREE in exchange for a commissary agreement.
That’s the winning pitch.