[pianotech] Business Definition

[David Boyce]

I have been thinking some more about the tax matter.

Wim, you say
> On the other hand, here in Hawaii I have to collect sales tax on all 
> transactions, including public schools and churches, (and then pay it 
> to the state). Because of that I have to have a business license, but 
> only to collect and pay the taxes, not to be in business.

That seems fair enough. In the UK there is a kind of sales tax called 
Value Added Tax, but small businesses whose turnover is below a certain 
amount, do not need to be concerned with it. Larger businesses have to 
be VAT Registered, and collect the tax on goods and services, and pay it 
to the government.

In Rick's case, there seem to be two issues he is facing:

> List, my municipal office in town just told me I need to get a contractors license to do business in the city.
> They also consider me to be violating zoning laws by operating a business in a residential zone.
The first issue is the matter of needing a Contractors License.  There 
must be some ordinaces or statutes written down that give the definition 
of Contractor and that specify who must obtain a license as one.  It is 
surely the right of the Citizen to be able to examine the 
statutes/ordinances for himself, and to be able to make an Appeal if he 
thinks that a city official is applying them incorrectly.

In a broader view, is it legal for a  city to empose an additional tax 
on the self-employed?

It is a long-established principle in US law - taken enough times to the 
Supreme Court - that a State or other local authority, may not impose a 
tax on a freedom that is guaranteed to the citizen by the Constitution 
of the United States. Thus if, for example, you have political views and 
you wish to distribute pamphlets in your neighborhood at election time, 
or you put out leaflets advertising church services, a State or City 
cannot require you to obtain a license for doing so, because those 
freedoms of expression are enshrined in the US Constitution, and no City 
or State may tax them.  I don't know how this would apply in respect of 
an extra tax on a self-employed person, however.  Expert legal advice is 
needed, I guess!

On the second matter, of zoning:
The question here, it seemeth to me, is What constitutes a Business 
Premises.
Of course it is sensible that a residential district should be 
protected. Thus if an employed hairdresser, for example, were to leave 
the shop where he or she works, and decide to set up a self-employed 
business, it is understandable that the City would take a dim view of 
building a large extension with shop window and doors to the front of 
the house and putting up an illuminated shop sign.  That is a matter of 
protecting the residential status of an area.  But if the service the 
haridresser wanted to provide, was entirely a mobile one, visiting 
housebound clients in their homes, surely the hairdreser's home is not 
becoming a business premises?

Or, imagine a college professor whose 5-year employed Tenure comes to an 
end. The college says, We would still like you to teach classes for us, 
but on a self-employed basis. We will pay you a small Retaining Fee to 
keep you available to us for a year, but you must invoice us for your 
work, on a consultancy basis, and your taxes will not be deducted at 
source - you will be self-employed and must do your own taxes.  What has 
changed regarding his home? It is now the home of a self-employed 
person, that is all. He makes out his invoices and does his 
book-keeping, at his desk at work, outside of hours.  How has his home 
become a business premises? Surely it has not!

Unless you argue that in order to carry on a business, you need enough 
sleep, and since your home is where you sleep, it is integral to your 
business. But that is silly!

Best regards,

David.
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