BUSINESS REGULATIONS LOCAL REQUIREMENTS

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1 BUSINESS REGULATIONS When you start a new business of any kind, navigating the licensing, permitting and regulations required may seem overwhelming. Sometimes obtaining all the licenses and permits you need takes extensive time and may also involve significant cost to your business. The permits required to do business often differ from city to city and county to county. The information provided here includes detailed information about Arkansas state requirements and any federal regulations. However, the discussion of local city and county requirements is more general. It is imperative that you check with your local government agencies to determine exactly what is required in your community. In addition to general licenses and permit requirements, there are a number of environmental regulations that apply to gasoline storage tanks. Information about these regulations is found following the general business information. LOCAL REQUIREMENTS Zoning Approval and Building/Sign Permits Before your store was built on its current site, zoning approval was required to ensure that the building met any zoning laws in place. If you plan any additional construction on the site, a building permit will be needed. In addition to that, many communities also require a sign permit, which can likely be obtained from a city agency. Business License Many cities and counties require all businesses to have a business or privilege license. These licenses are generally renewed annually and can be obtained in the

2 city in which your business is located. If the business is outside the city limits, check with your county collector or county clerk to determine if a permit is needed. Business Property Assessment As a business owner, you must assess the Commercial Business Personal Property, including equipment, furnishings and non-gasoline inventory. The deadline for assessing with your local county assessor is May 31 of each year. A 10 percent penalty is charged for missing the assessment deadline. Be sure you assess immediately if you are purchasing an existing business. To avoid liability, make sure there are no back taxes owed by the previous owner before you commit to buy the business. When you assess, you will complete a worksheet provided by the assessor listing the business property by category. The assessor will generate an invoice based on the business amount, age, and type of equipment. Be sure you itemize leased equipment, even though the equipment owner will be the one who is taxed. Taxes can be paid from the first working day of March through October 10 without a penalty. Local Taxes Arkansas has more than 275 local taxes in which local governments define their respective tax rates. It is important that you check with local taxing authorities to determine which taxes you must collect for your location. In addition to general local sales taxes, some areas also have an additional sales tax on restaurant and lodging (sometimes called a hamburger tax). If your facility includes food service, you may also be required to collect this tax. STATE REQUIREMENTS

3 Labor Laws Any business that employs four people or more with gross sales of less than $500,000 per year must comply with state labor laws. (If sales are more than $500,000, Federal labor laws apply.) These laws relate to minimum wage, overtime, and child labor. The Arkansas Department of Labor can provide you with specific information on these topics. Please contact: Arkansas Department of Labor West Markham, First Floor Little Rock, AR (501) State Withholding As an employer, you must register with the state of Arkansas and obtain a state withholding packet for remitting state income tax. Using the Federal Employer Identification Number, you will submit Form AR4ER to register your business. State income tax is remitted on a monthly basis and tax reports must be submitted quarterly. To obtain Form AR4ER or learn more about withholding, contact: Arkansas Department of Finance and Administration Revenue Department 7th and Wolfe Streets (501) Sales and Use Tax All retail businesses are required to have a sales tax permit and pay monthly sales tax that has been collected. To obtain the permit, complete an application and return it, along with a non-refundable fee, to the Department of Finance and Administration. Taxes are paid monthly. For more information on sales and use tax, contact: Arkansas Department of Finance and Administration Revenue Department 7th and Wolfe Streets

4 (501) State Unemployment Insurance Unemployment insurance payments are collected by the Arkansas Employment Security Department. This cost is paid quarterly and is based on each employee s earnings. You must register with ESD using your business Employer Identification Number. For more information, contact: Arkansas Employment Security Department P.O. Box 2981 Little Rock, AR (501) Workers Compensation Insurance Any business with three or more employees must obtain workers compensation coverage. In addition, you are required to post a sign in a conspicuous place within the business to inform employees how to handle a workplace injury. For more information, contact: Arkansas Workers Compensation Commission Fourth & Spring Streets (501) Restaurant and Food Services Anyone in food services, including convenience stores, must obtain specific permits for these services. Each county has an on-site inspector who must visit your facility and approve your kitchen plans. The county inspector can provide you with the necessary applications for permits obtained from the Arkansas Department of Health. For more information about food service regulations, contact: Arkansas Department of Health Division of Environmental Health Protection 4815 West Markham

5 Little Rock, AR (501) Alcoholic Beverage Control A state permit is required to sell beer and native wine in your store. Filing for this permit requires a criminal background check and attendance at an educational seminar. Your application must be submitted 30 days prior to an Alcoholic Beverage Control monthly meeting. In addition to obtaining the permit, it is important to understand the legal obligations of selling alcoholic beverages. As the owner of a retail establishment, you may be criminally charged along with your employees if an illegal sale is made. In addition to criminal charges, you may also lose your license to sell beer and native wine. Three ways to help control improper sales are: 1. Require identification from all purchasers who appear to be under 30 years of age; 2. Do not sell to anyone who appears to be intoxicated; and 3. Do not sell outside the legal hours. For additional information about permits and laws affecting the sale of alcoholic beverages, contact: Arkansas Department of Finance and Administration Alcoholic Beverage Control Division 1515 West 7th Street, Suite 503 (501) Tobacco Sales A special permit is required to sell cigarettes and other tobacco products. A sales tax permit number is needed to apply for the tobacco sales permit. The tobacco

6 permit fee is based on the anticipated weekly gross sales of cigarette and tobacco products by your business. If you are purchasing an existing business, you must receive a new permit before purchasing or selling any cigarette or tobacco products. Permits must be renewed annually no later than June 30. For additional information or to apply for a tobacco permit, contact: Arkansas Department of Finance and Administration Arkansas Tobacco Control Board 101 East Capitol Avenue, Suite 204 (501) Cold Medication Sales In 2005 the Arkansas legislature approved a law requiring cold tablets containing pseudoephedrine and ephedrine to be sold only by a pharmacist. Cold medicines with pseudoephedrine in a liquid or liquid gel capsule can be sold in convenience stores. Your grocery supply sales representative can provide you with additional information about which products can legally be sold in your business.

7 FEDERAL REQUIREMENTS Employer Identification Number (EIN) Employer Identification Numbers are used to report withholding taxes (both federal and state) for your employees. An application (form SS-4) for this number should be submitted to the Internal Revenue Service six to eight weeks prior to hiring an employee. In addition, some vendors and suppliers will request your EIN in order to do business with them. When your EIN is issued, the IRS will forward a booklet and materials for remitting your federal withholding taxes on a monthly or semiweekly basis and submitting tax reports on a quarterly basis. For more information or to obtain a copy of SS-4, contact: Internal Revenue Service Taxpayer Education Federal Building, 1st Floor 700 West Capitol (501) or (800) Federal Labor Laws If your business sales are more than $500,000 and you have more than four employees, you should contact the U.S. Department of Labor to discuss child labor laws, minimum wage, Occupational Safety & Health Administration regulations, the Americans with Disabilities Act, and the Family Medical Leave Act. To learn more about OSHA requirements and workplace safety, contact: Occupational Safety & Health Administration Office of Small Business Assistance 200 Constitution Avenue, NW - Room N-3660 Washington, DC (202)

8 For more information about the Americans with Disabilities Act, contact: U.S. Department of Justice Disability Rights Section, Civil Rights Division 950 Pennsylvania Avenue, NW Washington, D.C (800) For general information about federal labor laws, contact: U.S. Department of Labor Frances Perkins Building 200 Constitution Avenue, NW Washington, DC (866) 4-USA-DOL Federal Unemployment Tax Federal Unemployment Tax works with state unemployment systems to collect taxes for each employee. Employers may take a credit against the federal tax for amounts paid into state unemployment funds. Federal Unemployment Tax deposits are made quarterly using Form 940 or 940-EZ. More information is available through the Arkansas Employment Security Department, which coordinates all unemployment tax issues for Arkansas employers, at: Arkansas Employment Security Department P.O. Box 2981 Little Rock, AR (501) Immigration All U.S. employers are responsible for completing and retaining Form I-9 for each individual they hire for employment in the United States. This includes citizens and non-citizens. On the form, the employer must verify the employment eligibility and identity documents presented by the employee and record the document information on the Form I-

9 9. Acceptable documents are listed on the back of the form. To obtain a copy of Form I-9 or learn more about immigration, contact: U.S. Citizenship and Immigration Services 20 Massachusetts Avenue NW Washington, DC (800) While this may appear to be a lengthy list of actions needed to get your business up and running, many of them only require your attention once a year. The following is a list of permits and registrations you are required to address on an annual basis: Business License Renewal (depending on local requirements). Business Property Assessment no later than May 31. Property Tax Payment no later than October 10. Workers Compensation Insurance renew policy annually. Tobacco Sales Permit no later than June 30. Alcohol Beverage Control Permit no later than June 30. Please be aware that this list does not address items that you will handle more frequently than once a year or on an as needed basis. This would include things like income tax withholding, sales and use tax payments, unemployment insurance payments, and a variety of forms completed each time you hire a new employee.