HomeMy WebLinkAboutDoing Business in Iowa CityNotes for starting a business in Iowa City, page 1
Economic Development Division Wendy Ford
wendy-ford@iowa-city.org
319-356-5248
Neighborhood Services Division Tracy Hightshoe neighborhoods@iowa-city.org
319-356-5230
updated May, 2016
Starting a Business in Iowa City
Write a business Plan It is a good idea to spend the time to write a business plan.
This is essential if you plan to seek financial assistance such
as loans or grants or if you want to attract investment dollars to your business. Writing the plan will help you learn many
things about your business and its industry. The key pieces of
it will detail you intend to sell and distribute your product or serve, and how you will make, spend and reinvest money in
your business. The SBA has a good website about creating a
business plan – see https://www.sba.gov/starting-business/write-your-business-plan
Determine your legal structure
You may want to contact your attorney to get a full
understanding of the legal structure you should choose for
your company. The structure you choose impacts your taxation, liability, risk and control, continuity of existence,
transferability and formality. Some of the more common structures are sole proprietorships, general partnerships, limited liability company (LLC), and corporations (including S corporations). A one-person company usually has three choices: sole proprietorship,
corporation or LLC. More information can be found here: https://www.sba.gov/starting-business/choose-your-business-structure
Register with the state Corporations, limited partnerships, limited liability companies, nonprofits, trademarks or service
marks should be registered with the Iowa Secretary of State. You will need to choose a name
for your business and register the name to comply with the law and then register with state agencies. You can start at this website and learn more:
http://www.iasourcelink.com/regulatory/business-license-home
Keep Good Records
It is important that you keep excellent records from the beginning for every aspect of your
business survival. One way to ensure this is to seek the help of a professional accountant as you get started. As you build your business, you should do what you do best, and let the
accountant help you keep records which will be very important to your banker and for your tax liabilities. Good records can also help you analyze parts of your business that need improvement, such as how quickly you collect from your customers and what products may
need price adjustments.
Understand your tax liabilities; apply with the State
The simplest way to comply with tax liability is through applying on the combined business application form available from the Iowa Department of Revenue. This is where you can register
online for one or more of the following: sales tax, use tax, automobile rental tax, withholding tax
and corporation or partnership income tax. Again, the SBA has a lot of good information at their website: https://www.sba.gov/starting-business/filing-paying-taxes, including links to Iowa’s
Sales Tax registration at the Iowa Department of Revenue.
Notes for starting a business in Iowa City, page 2
A retail sales tax permit from the Iowa Department of Revenue and Finance is required for anyone making a retail sale in Iowa. All sales of tangible personal property in Iowa – other than
those for processing or resale – are subject to sales tax unless specifically exempted by state
law. Sales of services are exempt from Iowa Sales tax unless specifically taxed by state law.
Understand your legal liabilities Liability is risk you are exposed to when starting a business. The two main types of risk are tort risk and contract risk. Tort is an intentional or unintentional harm to a person or person’s
property. Examples included worker injury, product liability, automobile liability and general liability, such as when someone is hurt on your property. Contract risk includes financing risk and risk with vendors and customers. Almost all tort risk can be protected by insurance while
contract risk can be limited in the contract itself.
Hire good people
Employees have many legal rights and one of the most important things you can do is an entrepreneur is understand those rights before you hire an employee. You may want to consider
hiring an independent contractor (as opposed to an employee) as you begin to grow your
business. When you are ready to hire your own employees, be sure you understand workmen’s compensation and unemployment compensation requirements.
Home Based Businesses in Iowa City
There are two types of home based businesses:
Type A are those in which the resident uses the home as a place of work but no employees or
customers come to the site (examples include artists, writers and consultants).
Type B are those where customers regularly frequent the site or where a non-resident
employee works (examples include counseling, tutoring and hairstyling). Permits are required
for Type B businesses. Non-resident employees are prohibited except by approval of a building official through the minor modification process. Applications for permits and minor modifications
are available and fees may be paid at the Neighborhood Development Services.
It is important that home businesses do not detract from the residential character of the
neighborhood, are limited in extent, are compatible with residential use, and are clearly
secondary to the use of the home as a residence. The business may not exceed 25% of the floor area of the principal dwelling and there can be no indication (such as noise, odor, smoke or
extensive lighting) that there is a business inside, except for one non-illuminated sign that is one square foot or smaller in size, attached to the dwelling. Neither customers nor deliveries are allowed between 10 p.m. and 7 a.m., and Type B businesses are limited to 10 clients or
customers a day.
Commodities may be sold from the home, but only if they are produced in the home and are
part of the home business. Any home-based food production businesses must obtain a permit through Johnson County Health Department.
The business must not generate parking needs in excess of what is normal in the neighborhood. Vehicles used for delivery and pick up are limited to those normally servicing residential
neighborhoods. Commercial vehicles more than 7.5 feet tall may not be stored in residential
zones, so may not be used for a home occupation.
Notes for starting a business in Iowa City, page 3
Home based businesses prohibited in Iowa City include veterinary clinics, kennels, parking, eating, drinking, medical/dental offices, self-service storage, and any type of repair or assembly
of equipment with internal combustion engines (cars, motorcycles, snowmobiles, marine
engines, lawn mowers, chains saws, etc.), or large appliances such as washers, dryers and refrigerators.
Does your Business type require a permit to operate?
Neither the City of Iowa City nor the State of Iowa require a “general” business license to operate, however, many specific types of businesses are required to obtain a license or permit.
The table below lists some of those types, whether a permit or license is required and by whom.
For most required Iowa City permits, you apply at the City Clerk’s Office (noted CC in the table) and pay your fee there.
We strongly recommend that you search the State of Iowa Business License database to see if your business type requires a license in Iowa.
Business Type Ci
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St
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Co
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Notes
Abbreviations and
contact numbers for
agencies noted
below
CC - City Clerk, (319) 356-5040
CM - City Manager, (319) 356-5010 NDS – Neighborhood Development Services, (319) 356-5120
PW - Public Works, (319) 356-5139
County - Johnson County Public Health Department, (319) 356-6040
Alcoholic Beverages
CC x Permits are issued by the state Alcoholic Beverages Division. Information and applications for new or renewal
permits can be found on the Iowa Alcoholic Beverages web site www.iowaabd.com. In addition to the electronic
filing of the application the city has additional
requirements which must be met before new or renewal licenses/permits are issued. A checklist of city
requirements specific to alcohol permits can be obtained
at the clerk’s office.
Ambulatory vendor CM For moving around the Pedestrian Mall and selling items.
Cigarette Sales CC Application, fees and other obligations to fulfill under
Iowa City’s Cigarette Education Ordinance. See also www.iowaabd.com/tobacco.
Construction Trades
CC
Dancing CC Permit necessary only if in connection with the sale of
alcohol.
Day Care Centers x x Licensed through the Iowa Department of Human
Services http://dhs.iowa.gov/licensure-and-registration
Notes for starting a business in Iowa City, page 4
Business Type Ci
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Notes
Electricians,
plumbers, mechanical
x
Sign installers, sewer & water
installers
NDS Direct supervision of contractors licensed by the City of Iowa City for that particular trade is required for fire
alarm, fire sprinkler installation, maintenance sewer and
water installations, and sink installations.
Fire alarm, sprinkler installers x
Food trucks (operating on
public property)
NDS
Funeral Homes x x
Home based
businesses
NDS See page 2.
Hotels, Motels x x
Outdoor Service
Areas
CC Required to serve alcohol outdoors on private property.
Restaurants,
groceries, catering, etc.
NDS x x Permits are required for any food-related business
including grocery stores, restaurants, food cars, catering, certain home-based products and vending machines.
Building and equipment plans must be approved before construction or remodeling can occur.
Sidewalk Café PW x x Both local and state permits are required. A sidewalk cafe is an area for the sale of alcohol, food, or beverages
on City-owned property. Contact the Public Works
Department.
Tattoo parlor x x Call the state Dept. of Public Health (515) 281-7726
Vehicles for hire CC To operate a limousine, pedi-cab, taxicab, transportation
network vehicle company (individual drivers in network covered by company permit), or horse-drawn vehicle,
you must obtain a permit.
Notes for starting a business in Iowa City, page 5
Be in the (right) zone and get a building permit
Every business must operate in the appropriate zone. If you find a location you like,
check to make sure it is allowed in that zone. It is easy to find out – just contact Neighborhood and Development Services at 319-356-5230. They will connect you with someone who will ask the specific Iowa City address and the type of business you want
to operate there.
The development process is easy to navigate, if you understand the steps ahead of time. Following are circumstances you may encounter as you prepare to open or expand a business in Iowa City.
If you are moving in or renovating existing facilities…
1. Check the zoning code to verify the type of business (the use) you are intending is permitted.
2. Apply for a building permit to make physical changes to a structure or change the
primary use of the property, contact Development Services at (319) 356-5120.
3. If you are re-roofing and there is no change to the structure or sheathing, re-siding, or putting in concrete sidewalks, patios, or driveways you are not required to obtain a building permit, but some regulations still apply. Contact Development Services at
356-5120.
4. Follow steps for new construction.
If you wish to install a sign for your business…
1. You will need a Sign permit and the sign must comply with zoning codes.
2. Contact Development Services (319) 356-5120.
3. Sign permits are also available online http://www.icgov.org/documents/signapprmt.pdf
If you need to do any construction to open your business…
If you are building new facilities 1. Determine the zoning of the location you are considering a. To determine the zoning classification see the Iowa City Zoning Code website,
there is a link to a map indicating zoning or contact Neighborhood Development
Services; http://www.iowa-city.org/weblink/0/doc/1522551/Electronic.aspx
b. If the current zoning does not permit the type of use you desire, and there are not other locations that would work for you that are appropriately zoned, contact the Urban Planning in Development Services at (319) 356-5240.
c. The Urban Planning Division can work with you to determine if you may obtain a
special exception or re-zoning.
2. Contact Neighborhood Development Services (319) 356-5120 a. Building permit applications are available through Development Services at City Hall and online at http://www.iowa-city.org/icgov/apps/GEN/buildingapp.asp
Notes for starting a business in Iowa City, page 6
b. Submit your completed building permit along with a site plan and architectural drawings. Note: if your project is large, it may require a major site plan review
which may add three to six weeks to the process.
c. Depending on where you build, you may be subject to other laws and additional
material (such as grading permits, design review, flood plain permits, and sensitive areas ordinance compliance information) may be required. Contact Neighborhood Development Services for information.
d. Electrical permits, Mechanical permits, and Plumbing permits are required for all
new construction and new construction is subject to the site runoff ordinance.
3. Your design professional should have information on fire code compliance. If you are unsure of whether you are subject to the fire code, contact the Fire Department (319) 356-5257.
4. After construction is complete, an Occupancy permit is required before the structure
may be used. Contact Neighborhood Development Services (319) 356-5120.
If you are changing the use of an existing building without construction …
1. You will need a Certificate of Occupancy and may still require a building permit,
contact Development Services (319) 356-5120.
2. If the existing structure does not contain a fire suppression system, contact the Fire Department to verify if your use will require one (319) 356-5257. 3. You may wish to contact them to verify that an existing structure complies with the
Fire Code also. Fire Department (319) 356-5257.
Other Resources
Iowa Black Business Coalition ........................................ www.iowablackbusiness.com
Training, programs, educational opportunities in a membership organization
Iowa Department of Revenue and Finance ..................................... https://tax.iowa.gov
Taxes, sales tax permits Iowa Economic Development Authority ............. www.iowaeconomicdevelopment.com
Entrepreneurial resources, state research and information
Iowa Secretary of State .................................................................... www.sos.state.ia.us
Business services and state filing information Iowa SourceLink Business Concierge Service .......................... www.iasourcelink.com Variety of information and resources for business start ups
Johnson County Government ................................................www.johnson-county.com
Department of Public Health
Small Business Development Center .............................................. www.iowasbdc.org
2500 Crosspark Rd., Coralville, IA 52241 Free business management assistance to owners of for-profit businesses.
Contact: Paul Heath @ 319-335-3742
The Iowa Center for Economic Success .................................. www.theiowacenter.org
Microloans and business education