Obtaining Necessary Licenses and Permits

Before beginning business in Utah, the best resource for knowing what licenses and permits may be required is a consultation with a licensed Utah Attorney who specializes in business law. Furthermore, the State of Utah (www.Utah.gov) and the Small Business Administration (www.SBA.gov) have some helpful online resources. Local Chambers of Commerce and county and city Governments similarly provide additional resources on the subjects of licenses and permits.

Before operating a business, an owner or other authorized person of the business must ensure that the business and, in certain instances, each of its operators and employees obtain the required licenses. Failure to do so in advance of beginning operations can subject the owner and perhaps its operators and employees to civil and criminal penalties. Among others, see Utah Code § 76-8-410 (“Every person who commences or carries on any business, trade, profession, or calling, for the transaction or carrying on of which a license is required by any law, or by any county, city, or town ordinance, without taking out the license required by law or ordinance is guilty of a class B misdemeanor.”).

Various licenses and permits affect businesses. For the purposes of this chapter, they include (A) Business Licenses, (B) Professional and Trade-Specific Licenses, and (C) Other Licenses and Permits.

 

Business Licenses.
Business licenses are generally governed by city and county ordinances, and procurement of business licenses is generally achieved through the city and county offices. In unincorporated areas within a county, business licenses are governed by the county. Commonly in Utah, cities, and not counties, require business licenses in incorporated areas of a county.2

For example, if George were to open a business within the Salt Lake City limits (which lies within Salt Lake County), he would need to apply for and obtain a Salt Lake City Business License. Moreover, since Salt Lake County does not require a county business license except in unincorporated areas of the county, George need not obtain a Salt Lake County Business License. On the other hand, if Suzan were to open a business within an unincorporated area of Salt Lake County, she would need to obtain a business license from Salt Lake County and not from any particular city.

A common standard for who must obtain a business license in a particular city (or county) is anyone who engages in or carries on any business within that city (or county).3 Below is a representative example of how one of Utah’s largest cities, Salt Lake City defines “business” in this context of activities requiring business licenses:

Means and includes all activities, trades, professions, or callings engaged in within the corporate limits of Salt Lake City carried on for the business of gain or economic benefit, except that the acts of employees rendering service to employers shall not be included in the term “business” unless otherwise specifically prescribed.4

Salt Lake City’s definition for “engaging in business” is as follows:

Means and includes, but is not limited to, the sale of tangible personal property at retail or wholesale, the manufacturing of goods or property, and the rendering of personal services for others for a consideration by persons engaged in any profession, trade, craft, business, occupation or other calling, except the rendering of personal services by an employee to his employer under any contract of personal employment.5

In essence, if Leonard is engaged in any for-profit activity and is not doing so as an employee under an employer-employee relationship, then Leonard is responsible for obtaining a business license before engaging in those activities. Without the applicable business license, Leonard could be cited with civil fines or charged with Class B Misdemeanor criminal penalties.

Normally, applying for a business license is simple.6 Increasingly, a business license application can be completed online for many counties and cities, while many counties and cities may still require a physical form, that can be obtained online or from the city or county offices, to be completed. A fee, which will vary from city to city and county to county, will generally be required with the application. A business owner should contact the city and county where business will be conducted.

For the business license approval process, an inspection by the fire marshal and approval by the city inspector may be required for zoning compliance. Once an initial business license is obtained, annual renewal and fees are usually required to be paid by the business for each year the license remains in force. The business owner should independently ensure that the business activities comply with fire code and zoning ordinances.

In general, a business license is issued to the business that applied for the license and cannot be transferred to another business. Furthermore, a business license is normally specific to the line of business listed on the application. Contact the business licensing division of the city or county to learn whether a new or additional business license is required for the new line of business.

Even if the same business with a business license is engaged in business under another DBA (“Doing Business As”) the name on the business license, a separate business license certificate might be required—even if no fee is charged for the second certificate. Furthermore, a business license may be required for each place of business for one business— even if in the same city or county.

A business’s license should be visible in the main reception area of the business. The purpose is dual: to ensure that the business’s clients know it is properly licensed and to enable the city or county to inspect for proper display and licensure.

Professional and Trade-Specific Licenses.
The Utah Division of Professional Licensing (DOPL) is the main agency in Utah that governs professional licensing. Others agencies in Utah include the following:

Utah Insurance Department (Insurance Agents and Agencies) Utah Department of Commerce Division of Real Estate (Realtors) Utah Nursing Assistant Registry (CNAs)

Utah State Bar (Lawyers)

Bureau of Emergency Medical Services (EMTs)

County Health Departments (Food Handlers and Establishments) Motor Vehicle Enforcement Division (MVED) (Motor Vehicle Related Businesses)

It is also worth noting that the United States Government governs the licensing of certain professions, some of which are identified below. Below is a list of professions licensed under the DOPL7):

Accountancy Acupuncture ADRP

Architect Athlete Agents Athletic Trainer

Building Inspector Burglar Alarm Chiropractic

Clinical Mental Health Contractor

Controlled Substance Handler Cosmetology

Court Reporter CS Precursor

Deception Detection Dental

Dietitian

Direct-Entry Midwife Electrician Engineer/Land Surveyor

Environmental Health Scientist Factory Built Housing

Funeral Service Genetic Counselor Geologist

Health Facility Administrator Hearing Instrument

Hunting Guides/Outfitters Landscape Architect

Lien Recovery Fund Member Marriage & Family Therapy Massage

Medical Language Interpreter Medication Aide – Certified Naturopathic

Nurse

Occupational Therapy Optometrist Osteopathic Physician Pharmacy

Physical Therapist Physician Physician Assistant Plumber

Podiatric Physician Preneed

Private Probation Provider Professional Employer Org Psychologist

Radiology Recreational Therapy Respiratory Care

Security Companies & Guards Social Work Speech/Audiology

Substance Use Disorder Veterinarian

Vocational Rehab Counselor

Below are some businesses and trades which are governed in some form by the United States government, together with their applicable governing agencies.8

Agricultural: U.S. Department of Agriculture (USDA).

Alcoholic Beverages: U.S. Treasury’s Alcohol and Tobacco Tax and Trade Bureau (TTB) in addition to the local alcohol beverage control board.

Aviation: Federal Aviation Administration (FAA).

Firearms, Ammunition and Explosives: Comply with the Gun Control Act’s licensing requirements, which is administered by the Bureau of Alcohol, Tobacco, Firearms and Explosives (ATF).

Fish and Wildlife: U.S. Fish and Wildlife Service. Commercial Fisheries: NOAA Fisheries Service. Maritime Transportation: Federal Maritime Commission.

Mining and Drilling on Federal Lands: Bureau of Ocean Energy Management, Regulation and Enforcement (formerly the Minerals Management Service).

Nuclear Energy: U.S. Nuclear Regulatory Commission

Radio and Television Broadcasting: The Federal Communications Commission (FCC).

Transportation and Logistics: U.S. Department of Transportation provides maximum weight guidelines. Permits for oversize/ overweight vehicles are issued by state governments.

Licensure of attorneys is, in certain respects, different than many business and professions. Attorneys are considered to be part of a self- governing profession. The Utah State Bar is a nonprofit nongovernmental organization; however, its authority derives from the Supreme Court of Utah. The general rule is that “only persons who are active, licensed members of the Bar in good standing may engage in the practice of law in Utah.” Utah SCR 14-802. “The ‘practice of law’ is defined as the representation of the interests of another person by informing, counseling, advising, assisting, advocating for or drafting documents for that person through application of the law and associated legal principles to that person’s facts and circumstances.” Id.

In general, proper professional licensure of any business or profession has important implications from both a legal requirement standpoint and from a liability standpoint. A person engaging in activity that only a licensed professional is legally authorized to perform will be held to the standards of a practitioner of the profession. Thus, for example, if Jan as an Accountant offers legal advice9 to her client (regardless of whether the advice turns out to be incorrect according to the standards for attorneys), she would be in trouble for not only engaging in the unauthorized practice of law, but also may be liable to her client for the damages caused by the incorrect legal advice.

Requirements and applications for professional licenses are typically available on the website for the applicable licensing agency. After initial licensure, the agency will usually require periodic renewal with the applicable fees.

Other Licenses and Permits.
In addition to the previous licenses and permits, it is important that business owners be aware of the numerous other required licenses and permits that may govern or apply their area of business. Below are a few common examples.

Construction, Renovation, and Demolition Permits.
Obtaining other licenses and permits may be necessary in a variety of circumstances. One example is construction permits. This type of permit may apply if the business determines it will construct or improve the space in which it operates. The following is an example from the Salt Lake City Building Services (BSCE) website10:

No person, firm or corporation shall erect, construct, enlarge, alter, repair, move, improve, remove, convert or demolish any building, structure or premises, or make any installation, alteration or improvement to the electrical, plumbing or mechanical system in a building, structure or premises, or cause the same to be done, without first obtaining the prescribed permits for each such building or structure or premises from the building official.

Zoning Compliance.
A business must comply with zoning restrictions. To find out what type of commercial activities are permitted at the potential business location, a business owner would want to contact the city and county offices where their business is physically located. Zoning restrictions are not set in stone: property owners can apply to have them changed. However, neighboring businesses or residences will be notified of proposed zoning changes and may provide some resistance to the changes. A change to a zoning restriction, often called a variance, is generally handled on a one-off basis, but is not guaranteed to be granted.

Fire Department Permits.
Some activities require a permit from the local Fire Department, such as using flammable substances. A couple examples might include an auto body shop that paints cars or a gas station.

Sign Permits.
Most cities and counties have restrictions on the size and location of business signage. Contact the local city or county offices where the business is physically located to learn the scope and applicability of these restrictions.

Sales Tax Licenses.
A person starting a new business or buying an existing business that sells tangible personal property or taxable service may need to apply to the State Tax Commission for a State Sales Tax License. A sales tax license is non-transferrable. A business purchaser should ensure that the sales taxes for the business are paid-up prior to purchasing the business or require a credit on the purchase for paying the sales tax. Furthermore, “[a] separate sales and use tax license must be obtained for each place of business.” Utah Admin. Code r. 865-19S-7.

Health Department Licenses.
If a business plans to sell food directly to consumers or indirectly through retailers, a permit from the local Health Department will likely be required. The details of the regulations can be obtained from the local Health Department.

Conclusion
Obtaining the proper licenses, registrations and permits is a critical component of legally operating any business in Utah. Before starting a business or purchasing or leasing a business location, an entrepreneur should ensure that the zoning allows the anticipated business activity. If it does, the entrepreneur should turn his or her focus towards obtaining each of the necessary licenses, registrations and permits for the business and its employees, many of which are outlined above. Once all of those items have been secured, the entrepreneur can then turn his or her efforts to the actual successful operation of the business.