Licences for a home cleaning business: the full list

What to take away

Licenses for a home cleaning business come in four layers: state registration, state tax accounts, city and county permits, and a short list of credentials that apply only to certain services.

The licenses and permits that apply to home cleaning

Ten documents cover most home cleaning businesses. Each comes from a different office, and each renews on its own schedule.

State business registration. Every LLC and corporation files with the Secretary of State or its equivalent: the Division of Corporations in Florida, the Department of State in New York. Sole proprietors working under their own legal name generally file nothing at the state level.

Filing costs are one-time. Texas charges $300, California $70, Delaware $90, Florida $125 and New York $200. Yearly upkeep follows. Florida's annual report is $138.75, and California charges $20 every two years for a Statement of Information, on top of an $800 minimum franchise tax.

Registered agent. Most states want a registered agent with a physical street address in the state. You can serve as your own if you live there. Commercial agent services typically charge $50 to $300 a year, and a mailbox address does not satisfy the rule.

Trade name. If you invoice under a name other than your own legal name, most states or counties require a filing, usually called a DBA. Fees typically run $10 to $100. New York City files these business certificates through the county clerk.

Sales tax permit. Register with the state revenue department before your first invoice if your state taxes cleaning. Some states tax residential work but not commercial, or one-time jobs but not recurring contracts. The permit is usually free. The reporting duty is not.

California issues a seller's permit through CDTFA at no charge. Texas issues a sales and use tax permit through the Comptroller for free. Hawaii requires a General Excise Tax license, also free, at 4% retail and about 4.712% on Oahu with the county surcharge. New Mexico applies gross receipts tax to most services at 4.875% plus local options.

Employer Identification Number. The IRS issues an EIN free, usually within minutes online. Payroll processors, banks and W-9 forms all ask for it. No license depends on it, but almost every other account does.

Local general business license. Cities and counties license any business operating inside their limits, including home-based service businesses with no storefront. Chicago issues these through the Department of Business Affairs and Consumer Protection. Seattle uses a business license tax certificate, and Los Angeles a business tax registration certificate.

Fees typically run $25 to $400 a year and often scale with gross receipts. Renewal is annual or biennial.

Home occupation permit. If you work from a residence, most municipalities require this permit, and it is separate from the business license. It governs how much of the home you can use for business, how many vehicles can park there, whether you can store commercial quantities of chemicals, and whether employees can report to the address.

Fees typically run $50 to $250. A few cities add a conditional use review when chemicals or a work van are involved. Ask before you buy in bulk.

Workers' compensation insurance. This is not a license, but it works like one: most states require it once you have employees, and clients ask for proof of coverage. Most states start at the first employee. Alabama and Mississippi use five, South Carolina and Florida four, Georgia three. Texas does not require it for most employers. Confirm your threshold with the state agency.

Unemployment insurance registration. Register with the state workforce agency before or at the first hire. The Texas Workforce Commission and the Florida Department of Revenue are two of those agencies. Most states use the federal test of $1,500 in wages in a calendar quarter, or one employee in 20 weeks.

Federal unemployment tax runs 6% on the first $7,000 of wages and drops to 0.6% with the state credit. Most states also want new hire reporting within 20 days.

Occupational licenses for specific services. Basic residential cleaning is unlicensed in most states. Mold remediation is not. Florida licenses mold assessors and remediators through the Department of Business and Professional Regulation, Texas through the Department of Licensing and Regulation, and New York through a Department of Labor mold program.

Asbestos abatement requires a state contractor license. Pest control runs through agriculture or structural pest control boards, such as the California Structural Pest Control Board, and applying pesticides is a different business from cleaning.

Trauma and biohazard cleanup usually falls under state medical waste rules, which can mean a generator or transporter registration. Work that generates hazardous waste needs an EPA Identification Number, issued through your state environmental agency.

Lead-safe work in pre-1978 housing needs EPA firm certification, $300, plus a certified renovator on staff who has completed an eight-hour course. If your service menu includes any of these, get the license before you take the job.

The rest of this article is the five-call protocol that produces the exact list for your address, plus a record sheet for keeping the answers straight.

Why the list changes by address

Three variables move the answer, and all three are local.

Where you are. States differ on whether residential cleaning is a licensed occupation, on whether cleaning services are taxable, and on workers' compensation thresholds. Counties and cities then add general business licenses and home occupation permits on top.

New York adds one more layer. LLCs with an office in New York City or roughly two dozen other counties must publish a notice of formation in two newspapers, which typically costs several hundred dollars to more than $1,500.

What you do. Maintenance cleaning, post construction cleanup, mold or pest work and waste hauling sit in different regulatory categories. Move-out cleaning is unregulated nearly everywhere. Mold remediation is licensed in Florida, Texas and New York. The line is drawn by the state, not by how the work feels.

Who works for you. Employing people activates a large set of obligations that do not apply to a solo operator, and it is the single biggest change in the list. The wider compliance context sits in the licensing and compliance guide.

The five-call protocol

Set aside a week. Make the calls in this order and record every answer on the sheet at the end. Each answer changes what you ask next, so starting at the city produces confident wrong conclusions.

Call one: the Secretary of State or equivalent

Ask:

Call two: the state occupational licensing body

Ask:

The second question is the one that earns the call. Owners are usually right that basic cleaning is unlicensed and wrong about one service on their menu.

Call three: the state revenue department

Ask:

Get this answer in writing if the department offers written guidance. A wrong assumption here accumulates quietly for as long as nobody notices.

Call four: the county and city clerk

Ask:

The storage question constrains purchasing directly, so ask it before you buy in bulk. What ends up on the vehicle is set by the equipment specification, and how much of it you can hold at home is set by this answer.

Call five: the state labor and workers' compensation agencies

Only if you will have employees, and ask before the first hire rather than after.

The federal side of the same questions is covered by the compliance assistance material for new employers, and the wider set of employment and training obligations follows from what these two agencies tell you.

The record sheet

Keep one row per answer. It takes minutes and it is the difference between a compliance position and a memory.

The three things people mistake for licenses

Bonding. A fidelity or janitorial service bond covers employee theft from a customer. It is normally a customer expectation rather than a legal requirement, and it does not cover damage. Coverage for a small operation typically costs $100 to $300 a year.

Insurance. General liability is usually a contractual requirement from clients rather than a licensing one, though workers' compensation is a genuine legal obligation set by your state.

Certification. Trade association credentials are voluntary. They can be worth having, and they are not a license. Describing one as though it were is an advertising problem as well as a factual one. Be careful how any of this appears before you advertise to a customer.

What applies regardless of licensing

Two obligations attach to the work itself once you have employees, and no license question changes them.

The hazards of the trade are described in the Occupational Safety and Health Administration: Cleaning Industry overview. These include chemical exposure, ergonomic strain, slips and biological risk. The overview also describes the standards that attach to each.

Chemical duty applies to essentially every cleaning company. Employers whose workers handle hazardous chemicals must provide a written program, container labels and warnings, accessible safety data sheets, and information and training. That is set out in the Occupational Safety and Health Administration: Hazard Communication Standard.

Ask your state whether it operates its own occupational safety plan, because that changes which office you deal with. Federal OSHA runs the program in about half the states. California's Cal/OSHA requires a written Injury and Illness Prevention Program, and Washington's Department of Labor and Industries requires an Accident Prevention Program.

If you keep an office or any location the public visits, accessibility obligations apply there. The U.S. Department of Justice: ADA Guide for Small Businesses explains what businesses serving the public owe.

Vehicle registration and insurance requirements attach to how the vehicle is used, not to what it carries, so confirm the position on business use before the first job. What is in the vehicle comes from vehicles and equipment on the list. How it may be driven and parked is a separate question for your insurer and your local authority.

Common questions

How long does the protocol take?

About a week of calling, mostly spent waiting for callbacks. It is the cheapest week of work in the whole launch. Doing it after you have started is how a business discovers a missing registration during a client's vendor review.

Can I just use an online formation service?

They handle entity formation competently and they do not answer the local layer, the service-specific layer or the employment layer. Those calls are still yours to make.

What if two offices give different answers?

Get both in writing, note the discrepancy, and ask an attorney in your state. This happens, particularly between state and local offices, and a documented attempt to resolve it is worth having.

Does anything change when I hire my first employee?

Yes, more than at any other point. Several employer duties begin or expand:

Make call five before the hire, not after.