Do I need to obtain city business license?

[kpham]

What is the name of your state? California

I've set up an LLC in California providing "Sofware Consulting Services". I'm also the register agent for my business. I do not have or plan to operate my business from a fix location. Any works I do will be at clients' sites.

I have signed up a client who is the Navy - a branch of the Department of Defense - and will be performing services at this client site which is located in San Diego city but is designated as a US Government facility.

In this situation, am I doing business in San Diego city and do I need to obtain a San Diego city business license ?

Appreciate any guidance from business experts.

Kim

 

[clueless3]

Software contractors don't need to get a business license in every city that their clients happen to be in. Officially, they need to check with the city that they "operate" out of (eg, the city where their home is), to see if the license is required for their pariticular business, but they can probably get away without getting the business license in that city, as long as there's not a lot of client traffic going in and out of the house. (Since they have to OPERATE the business out of some place, they can't say that they work "out of nowhere". The PRINCIPAL place of business can be logically taken to be the address that they use to register with the State; if it's not the address of the Resident Agent, then it's usually their home.)

However, if you plan to deduct part of your home as your office in your or your LLC's income tax, then you may as well try to get the business license as it would solidify your case, legitimizing your claim with the IRS, especially when MANY cities in California do NOT require business license at all; in many cities, the fees are a fixed $50 per year; in some other cities, software contractors don't need to get a license, as long as the traffic in and out of the house is low. The tax advantage is so much greater than the cost of the license, in most cases.

Check with your home city about the license. It may end up not costing much at all, if any.

 

[tranquility]

You will have to check the statutes of the cities you work in and where your business location is. We had a client who repaired air-conditioning. He had trucks with his name and number on them. He went to a new client in a city he had not been in before. Later, the city wrote a letter to the business saying a city employee saw the truck stopped in their city and presumed he was doing work in that city. They then demanded the client get a business license and pay a penalty.

Some cities in CA are getting very aggressive in getting the business license tax they feel they deserve. Look into the specific laws in the places you plan to go and act accordingly.