Licensing

[One Tough Pressure 580]

We all see the common phrase of "Licensed and Insured" When I see this, I think of a State Contractors license, rather than the ones issued by Cities and Counties.

How does everyone else view this?

In California, the State license that would best apply to our business, is the "Sand and Water Blasting". Most do not blast sand, and even though we "blast water", it is under the 6000 psi that is associated with true water blasting. It all comes down to how each person interprets the phrase blasting.

Also, the law states that if you contract without a license, you must advise the party who hired you that you are not a licensed contractor, and the work must be for under $500.00 for both Labor and Materials

Who here has a State issued Contractors license for Pressure Cleaning? Or who has a General Contractors license that they use while Pressure Cleaning?

[Jon 533]

Licensed and insured.

Licensed: Local city business license.

Insured: Business had basic insurance to cover any damage you do.

Fully insured means above and your equipment plus medical.

Now in CA if you have a contractors license you would say:

CA state Contractors license # - - - - - .

I still disagee we need one here, true water blasting starts above 6000 psi and I was told a higher number by the contractors board once.

All depends on who you ask, and if you ask 10 people your going to get 10 answers as they really do not know.

There is NO license for pressure washers in CA nor is there any sub lic. for it.

[One Tough Pressure 580]

Minor Work Exemption (B&P 7048)

Is it true a contractor's license is not required if the work to be performed is under $500?

B & P section 7048 Small Operations provides an exemption from licensure for minor work if the aggregate contract price, including labor, materials, etc. is less than $500. However, at the time of bid or prior to entering into a contractor to perform work, the person performing the work must provide a written statement of non-licensure to the customer. Requirements for the notice are very specific (B&P 7048(b)). This exemption does not apply if the "minor work" is part of a larger project. Example: A homeowner is having a kitchen remodeled at a total cost of $6,000 and decides to sublet the flooring work which is only $300. The person doing the flooring would not be exempt from licensure because the overall cost of the project was over $500.

Contractor Advertising

Are licensed contractors required to include their license number in advertisements?

Any time a licensed contractor advertises his services whether on paper, over the air waves, or on the Internet a license number must appear. This includes but is not limited to letterhead, business cards, any type of directory listing, airwave transmissions, newspaper ads, or any form of advertising.

Is it against the law for an unlicensed individual to advertise construction services?

No, as long as the advertisement includes a statement that the individual does not hold a contractor's license (B&P 7027.2).

D-38 Sand and Water Blasting

A sand and water blasting contractor uses the force of compressed air in conjunction with abrasive materials or water to clean or prepare surfaces for any protective, decorative and/or functional treatment.

D-06 Concrete-Related Services

A concrete related services contractor installs reusable steel concrete form sections or interlocking pre cast pavers. Performs post-tensioning work, concrete sawing, breaking, curing, floor hardening treatment, coloring concrete, concrete restoration, coring work or operates a concrete pumping service; also includes the application of gunite, but does not include the installation of reinforcing steel.

http://www.cslb.ca.gov/services/GClass.asp#C-61Class

[Jon 533]

D-38 Sand and Water Blasting

A sand and water blasting contractor uses the force of compressed air in conjunction with abrasive materials or water to clean or prepare surfaces for any protective, decorative and/or functional treatment.

Ref. the above, we clean yes, but not to prepare for any of the above reasons. We are not doing decorative work, adding a protection to it and what would functional treatment be if not protective treatment?

We clean it to look clean nothing more, nothing less.

Contractor Advertising

Covered when I said you must advertise your CA contrators lic.

D-06 Concrete-Related Services

A concrete related services contractor installs reusable steel concrete form sections or interlocking pre cast pavers. Performs post-tensioning work, concrete sawing, breaking, curing, floor hardening treatment, coloring concrete, concrete restoration, coring work or operates a concrete pumping service; also includes the application of gunite, but does not include the installation of reinforcing steel.

We do none of the above.

I left out the first one as it really does not apply to us.

NEXT PLEASE.

[beclean2 14]

I'm a newbie to these boards, but, not to Pressure Washing so hopefully I don't screw anything up in this post. Anyway, here in VA we are required to have a contractors license to enter into any agreement to perform services over $1000 (although most pressure washing companies in my area do not have one). There is no specific classification for our industry here so my license classification is under Home Improvement although it covers me for contracting with businesses as well. I do know of a case where a local pressure washing company performed a service in excess of $2000 and the customer refused to pay. The company took the customer to court and lost because they did not have a state contractors license and therfore could not legally enter into the agreement.

Well that wasn't to painful so maybe I'll put my 2 cents in another time. thanks ;)

[RyanH 14]

Don't know about the wacky laws in CA, but in GA the license is typically a business license. There is no licensing for pressure washing itself, but the city wants a business license. From what I have learned in talking to others, this is purely a tax-related requirement. The city wants to be able to tax a business on all of its assets and functions, and licensing is an easy way to track businesses. Most banks will not allow you to open a business account without a business license. I happened to find one that does and I will be going there this week to give them my business. I will not get licensed unless I see some personal benefit to it. On my advertisement, I only list "fully insured."

Unfortunately, there is a herd mentality with people on this. Once they see cleaners listed as "Licensed and Insured," they will question--and most likely not contact--others not toting the "licensed" portion.

Just my few thoughts.

Ryan H.

[reed 500]

Ryan, same goes here in Missouri. License to operate a business with of course, fictitous name registration with the state.

Reed

[Mike Williamson 198]

There is no contractor's license in Florida for pressure washing, though particular municipalities may require one (though I'm not aware of any). In this area, you're required to hold a business license in the county in which your operations are based (not necessarily where you perform the work.) To my knowledge there is no limit on the dollar amount of work performed. The $500.00 cap in CA seems silly, since many PW jobs will exceed this, especially in the wood care area.

[One Tough Pressure 580]

We do need to have DBA/Ficticious business names, and they are filed with the County. They are also required to open up a business account, at least at my bank anyway.

People touting the "License and Insured", has had me explaining to customers that others may be licensed by the City, which I am, but that they are not licensed by the State.

I recently found out about this $500.00 cap on services when working without a license, and have a feeling that I lost some potential business because I did not have a State License and yet bid over $500.00. Now that I know about the $500.00 cap, I am looking into the State License.

Jon,

We have been thru this before. It just depends on who we talk to at the Licensing Board of whether we need one or not. It can not hurt, and I would like to continue to be able to charge over $500.00 for jobs, and still be legal.

[Aplus 525]

For me, licensing means a city license to operate a business, and a DBA license thru the county.

I've never been questioned as to what 'licensed' means, but I would tell them that it means I am registered thru the county, and licensed in the city to do business.

[Paul B. 523]

RyanH,

I'm not sure I understand your reasoning behind your post:

"the city wants a business license. From what I have learned in talking to others, this is purely a tax-related requirement. The city wants to be able to tax a business on all of its assets and functions, and licensing is an easy way to track businesses....

...I will not get licensed unless I see some personal benefit to it."

If you don't have a business license, you are not considered a legitimate business by at least your city, maybe county?, and maybe state? (The feds don't care as long as you are paying them your fair share of taxes.) If you are not paying taxes, you could be fined and also accumulate interest that you would be personally responsible for.

Is pressure washing a texable service in your state? If it is, are you collecting taxes on your work?

Are you paying sales taxes on the products that you purchase and apply on your customers homes? Usually, even if service is not taxable, materials are (at least in select states).

If you do deck staining work for example, you would have to collect and pay taxes at least on materials used such as the stain (even if it wasn't required on labor.) As a business, you would be allowed to be exempt from paying sales tax when you purchase your stain, but you would collect it from the customer, and pay it to your state/county. This is how your city/county has money to operate and bring you some of their services.

[RyanH 14]

I chose to not do the tax-exempt route because I don't want to be responsible for keeping track of the taxes. I pay the sales taxes up front to the store and let them handle that work. The only thing I charge for is my "service," meaning I don't factor the cost of the materials into the job when I give an estimate, much like you wouldn't factor the cost of the paper on which your invoice is printed into your overall cost to your customers. I pay taxes to the state/feds in the form of income taxes. All of my equipment/supplies are considered business expenses and are factored into my overall budget as a deduction.

As for the business license, I do my business in several counties and even more cities, so being licensed by a single county or city doesn't make much sense. I do not have a "place of business;" i.e., I do not have a business site which is accessible by the public (I work out of my house).

The trailer and truck bave tags, on which I pay property taxes each year. I figure the counties get enough in taxes from them.

Now, in the next few weeks I will be going to an accountant to get set up as a small corporation, so whatever he/she suggests I do in the way of licensing and taxes, I will do.

Now, my little rant. If income taxes were eliminated on EVERYTHING and EVERYONE (rich, poor, ugly, nice, etc.), I think we would see more businesses grow and flourish. When I vote, I don't vote along any particular party line, I vote for the candidates who want to see a sales tax imposed on everything. That way, taxes have to be paid, simply, and nobody has to worry about tax accountability in growing their business.

Done ranting.

Ryan H.

[Jon 533]

If you recieve checks made out to a business name you will need a DBA and proof it is registered with the country then published for 4 weeks once a week.

The banks require that before you can open an account in CA and I am sure most other states too.

Taxes, some states require all service companies to collect tax, some don't and I am glad CA does not.

Ryan is smart to go the exempt route, a pain to have to keep so many sets of books and pay quarterly taxes.

I hope the day never comes we are forced to pay the money needed to have a license as it would really be a money tree for the state more then for us.

[Paul B. 523]

(I understand these vary by state, county and city.)

My P/W business is set up in Ohio as LLC (Limited Liability Company) and is filed under the states provisions and administration. This registers the company and keeps anyone else from using the company name I registered. LLC is shown on all company advertising and documents.

In addition, the county requires a business license, regardless of a business having a store front or being operated out of your home. (Some businesses are not allowed to be run out of your home based on county or city zoning ordinances). Sales taxes are administered by the state, but the final % are arrived at by each county. The state determines what business should collect taxes on services.

Just as an example, in Ohio I collect sales tax on materials and service on all work my company performs (per state laws).

I charge Sales & Use Taxes per county where the work is performed. Ohio has 89 counties and the sales tax varies from 6.5 to 7.5% per county. They require that I collect, track and file these sales taxes. I send the state all monies collected and they disburse it to the counties that I collected from.

RyanH, you say:

"The only thing I charge for is my "service," meaning I don't factor the cost of the materials into the job when I give an estimate, much like you wouldn't factor the cost of the paper on which your invoice is printed into your overall cost to your customers."

Every expense of my business (including the paper the invoices are printed on) are factored into the hourly rate or total estimate I present to my customer to arrive at the net income I wish to have at the end of the year. It's a function of doing business.

Not all states have income taxes (such as Florida, Nevada and Alaska), as they generate sufficient income from tourism, gambling and in the case of Alaska oil. Most states do not have these luxuries and do not wish to further burden their residents with high taxes on food products. The low income groups do not pay very much if any income tax and also pay no taxes on food products (other that what is consumed in a restaurant).

[Paul B. 523]

Jon,

I agree, licensing or certification for P/W's would be a waste all around.

It would be nice if sales taxes were quarterly - they are monthly if you collect over $200 in 6 months. Paid twice per year if under $200.

I spend thousands of $ a year on materials that I can be exempt from paying taxes on to my supplier. (We have many jobs where materials alone are in excess of $500.) If I didn't file exempt on these, I would double pay sales tax on this portion.

...I only need one set of books.

Services were exempt from labor sales tax for a long time in Ohio, (only having to pay sales tax on materials).

Some services are still exempt, but they are fewer every month.

I'm afraid income taxes may never disappear as there are too many jobs at risk of disappearing along with it (such as the IRS and all their employees, tax attorneys and all their employees, CPA's and..., etc., etc.).

[One Tough Pressure 580]

In my city, if you are operating from home, you need to have a home occupation permit, in addition to the City Business License. They have a long list of things that you are not allowed to do as part of the Home Occupation permit, one being no commercial vehicles at the residence. I use magnetics to get around this, but the registration is for Commercial plates as well as the insurance.

I disagree with Jon and Paul in regards to a State License. Not only would it help to deter the amateur from entering this field, it would acknowledge pressure cleaning as a trade.

It would also allow companies that offer this service, to legally charge over $500.00 for a job. Guess I am a criminal in this regard, as I have charged that many times, before I found out that a license is required to contract for over that amount. I will only charge $499.99 from now on.

=As much as people do not want any more regulation from the goverment, this is one thing that I would like to see happen. It would raise the bar.

[Jon 533]

Paul B. I can understand agree if you buy wholesale with a retail number your not paying tax so you have to collect it from customers and pass it on to the state, someone has to pay that tax.

Labor normally is exempt but not in all states.

Running a business out of your home, some allow some don't, here I have to have a permit and they can come inspect my home to be sure I am only using for what the permit claims.

My permit has limitations, NO customers are allow here, not to have work done nor to talk business over coffee. It does allow me to store equipment and supplies.

I have no problem there as I don't want customers knowing where I live anyway.

Don't get me wrong about pressure washers not being licenses as contractors, sure it would help weed out the low ballers and others but it would also in my opinion weed out some of the true and good guys too.

Then there is the little thing about not all test and licenses are equal, both within each state and from state to state.

Things should be standardized for contractors thoughout the USA. That way it not only is fair and equal but weeds out all the bad seeds, HOPEFULLY!

[Paul B. 523]

Call me a pessimist but I don't think licensing would weed out the bad seeds or raise the quality bar enough to justify the negatives - there are many bad doctors, nurses, lawyers, financial advisers, brokers and car mechanics out there. (Need I continue?) It may, however, raise the financial bar - which would be enough good news for some of the advocates of licensing.

You see, the problem I see with licensing is that the testing would most likely be very week and overpriced and as Jon said, unless nationally administered, be inconsistent (lawyers and doctors require testing by state - I can't see P/W's). I can't see it having any more validity than being a Flood or Wolman's certified deck specialist. And ...you could still have many non-licensed part timers out there.

The $500 amount doesn't apply in every state (only special states that already overburden almost all small business owners). Go Arnold!

[One Tough Pressure 580]

That $500, has been around before Arnold ever even thought of becoming Governor. It is not new, just news to me recently.

I used the word deter earlier and that is what it will do. Can't eliminate all the bad seeds, but sure can help. There will always be some bad ones, so all we can do is try and reduce them.

[Paul B. 523]

I agree with reducing the bad seeds, I'm just not sure additional laws and regulations are the optimum way to approach it. After all, there are too many other approaches that are available.

Off the top of my head, these are some areas I would address before creating more laws and initiating cost barriers:

Contractor education,

Customer education, (increasing customer access to BB's, improving BB quality, National advertising)

Generating additional customer referrals such as: Amy's List,

Improving PW association

Improving manufacturer's product quality,

Consumer report for contractor products

Getting the manufacturers to increase consumer education

Reducing Workman's comp. costs

Reducing Liability Insurance costs

Reducing and simplifying small business taxes.

[RyanH 14]

Paul, it sounds like what you are suggesting will one day lead to a type of union for pressure washers. As far as that idea goes, I say not only no but HELL NO!!! (I have my own reasons for disliking unions).

As far as your comment about the IRS losing jobs---GREAT!!! Nothing I'd like better than to see that bloated division of the government downsized considerably. I don't like the idea of any entity creating more need for itself.

And as far as the taxes on items drastically increasing the cost of the items, consider this:

When you go to the store to pay for a banana, you see only one price. That banana, however, had to be grown on some piece of property, managed by some person, harvested by some person and some type of equipment, packaged in some type of material, loaded onto some type of vehicle, shipped to a store where it must be stocked by some other person.

The amount of taxes tied up into that one banana is quite enormous. You have income taxes, social security taxes, etc. paid on every individual who had their hands in the process of growing that banana to putting into your grocery cart. The sales taxes on the fuel required for the vehicles had a sales tax on it (as well as any income taxes on the people who had their hands in processing the fuel, and building the vehicle, and making the parts to build the vehicle......). The land on which the banana was grown had property taxes imposed on it by the local government. The producers pass those costs right along to your hungry hands.

So many taxes you are already paying for in the store for that banana before you even pay your state and local sales taxes. From I remember, somewhere around 23% of the cost of almost every product is for the accumulated taxes. By eliminating all of the income and property taxes along the line, 23% of the cost can be saved. The idea proposed by a few senators was to do this and then impose a 24% sales tax on all goods. Mathematically, this comes out to be somewhere around a 1% increase in the cost of goods, but you get to keep ALL OF YOUR INCOME, not only 60 - 80% of it like the tax payers do now. But the "poor" people won't vote for this because they don't understand the current tax burden on the tax payers.

Sorry for the off-topic rants.

Ryan H., who believes that *most* poor people are poor because they make the choice to be poor.

[Paul B. 523]

I don't care for the size and organization of the IRS and the support systems associated with it myself, however, I do not see it disappearing as there are too many people profiting from it.

Without a long dissertation on my part, I understand product taxation - I just don't believe higher sales taxes (especially to the higher tax rates of 23-24%) would benefit the lower income level people, since their burden would increase and they are already not paying much if any income tax. Also, most products already have sales tax in addition to the income taxes, as certain communities (because of their size) can not sustain existance or growth without it. Having said that, I am also against our income tax system the way it is, but I visualize it differently.

I am by NO means advocating a union for P/W's.

I'm NOT in favor of unions myself (however I do recognize their place in history and the fact that they did help against greedy and un-caring employers).

I am also NOT in favor of systems that rely solely on government licensing and control of every move and every breath we take.

Neither Socialism or Communism works very well and I just see us heading away from Democracy, the more we allow government controls in lieu of "self control". What I am supporting is Non-Unionized organization(s) that would benefit this trade. I see this as a voluntary contribution that would not benefit specific individuals per say, but the entire trade.

I also believe that if a community creates a law that requires all business to have licensing, than it is that community's responsibility to help the businesses that obey the laws and punish the ones that do not. Businesses should have to show their operating licenses to bid on work. (Maybe even to the extent where the consumer should be fined for using non-licensed contractors.)

Similarly, I think there should be more crackdown on businesses that use illegal labor or that pay employees under the table or avoid taxes, workers comp., etc.

These businesses help promote OUR high taxes and low wages in lieu of higher profits in the owners pockets.

In otherwords, I don't believe we need more laws, bat rather, need better enforcement of the ones that are already in place.

[Jon 533]

The only reason they have laws are for people to break them so they can be fined.

Hence TAXED.

Now I don't want to start a long fight over murder, rapist, and all the other ills we have here but face it, a law is broken, you get fined, fine=tax= MONEY for the state, county and city.

What Paul B. says about if a city has a law concerning licensing it should enfoce that law and require as Paul says to show the license in order to get business.

[Paul B. 523]

Jon,

"The only reason they have laws are for people to break them so they can be fined. Hence TAXED."

This statement is probably more true today than it was 25-30 years ago. We've so lost the meaning of what laws were for.

[newlook 265]

This is a great topic for the PWNA to tackle and hopefully provide direction. It is a tough position as all states are different when it comes to licensing.

There is no real classification for power washers in CA. I contacted them several times and asked for direction. Everytime I called I received different answers.

I agree with Alan that by having a state license would certainly bring creditability to our industry and to the company that posses the license.

For me ~ I have a city business license. Before I was issued my license, my city called the State Contractors Board and asked whether or not I needed a specific license to conduct business. They were told no.

Though our industry is rich in heritage it is still very much fragmented as it relates to overall standards. I think this is a wortwhile topic and should be kept on everyones radar screen for future discussion.

Alan/Jon ~ Let me know when you guys want to meet. I would like to see the PWNA Chapter idea manifest itself for us out here in Calif.

Cheers!