There are several regulations and restrictions that auto repair shop owners should consider before opening. While the US is one of the easiest places in the world to open a new business, there are some important steps to take and local laws to research, especially for occupations and services that involve heavy and dangerous equipment. Here we’ll take a look at which licenses and certifications apply specifically to aspiring auto repair shop operators.
These factors may vary from state to state, but they generally apply to all newly established auto repair shops.
Establish a Business Entity
To keep things professional and avoid any annoying inquiries from tax officials, you’ll have to register your business with the local authorities. The organization (for tax purposes) of your business can be in the form of a limited liability company, a sole proprietorship, or a partnership. These terms simply categorize your business differently depending on whether you are acting as an individual or plan on hiring employees or equal partners to determine what kind of taxes you’ll have to pay.
For a normal auto repair shop, you’ll most likely need to register the name of your business with your state’s Department of Motor Vehicles or county clerk. At this stage you’ll get a tax ID number (or EIN) and any information regarding zoning requirements or the needed permits to handle hazardous materials.
Sales Tax Permit
Almost every business in the US is required to pay sales tax on their goods and services. Auto repair shops are no different. But to get this process started and ensure every transaction is properly logged and operating within the law, you’ll have to file for the right permits with the county clerk and/or the state department of tax and finance. Some states or counties may have local sales tax regulations that are separate from federal sales tax. It’s important to cover both bases to avoid any confusion when filing taxes for your business in the future.
Once you’ve found a location that fits the zoning requirements and fire and safety codes for an auto repair shop in your area, the next priority should be purchasing the appropriate insurance policies for your business and your employees. Auto repair shops particularly should be interested in fire insurance, workers’ compensation insurance and liability insurance. The shop may also need to have proof of inspection by the local zoning authorities or city planners, depending on where the shop is located.
ASE Certifications (Automotive Service Excellence)
Though it may not be required in every facet of your shop, ASE certifications are a group of credentials that could raise your credibility as a quality auto service provider in your area. ASE certifications are recognized throughout the country as one of the leading standards for measuring the quality of vehicle repair and vetting mechanics. There are eight certifications covering various aspects of automotive repair:
Apart from trade certifications, here is a checklist of operational procedures specific to auto repair shops. Since this is a space where you and your employees will be regularly handling hazardous materials, it’s good practice to maintain strict guidelines and safety codes in every corner of the shop, not only to ensure you pass state inspections with flying colors, but also maintain a safe environment for the community. Licensing and Certifications Needed to Open an Auto Repair Shop