Regulation Rare as Snow in July

Most cities in the Los Angeles area have strict codes making it illegal to run a retail business out of a private home, but few agencies crack down on holiday boutiques that sell handmade goods only one or two days a year.

While the city of Los Angeles does not require businesses to buy a license, large-scale sellers pay a business tax, according to Don DeBord, chief of the city’s Tax and Permit Division.

As a general rule, DeBord said, if sales revenue is generated seven different times in the city, the seller must pay a business tax, usually $1.25 per $1,000 worth of gross retail sales. But if it is just a garage-sale type--one or two days a year--no business tax is required.

“Business tax is predicated on sales activity within the city,” he said. “It is a non-regulatory, revenue-producing tax.”

Home boutiques are “not a gigantic problem” in Burbank, although they seem to have become more popular in the last 5 or 6 years as “an outlet for hobbyists who want to make a little extra money,” according to a Burbank licensing supervisor.

“Boutiques are difficult to regulate,” he said. “But we do regulate them” by issuing $10 garage sale permits, which allow the sale of new or used items on a limited basis.

“The first year we ran into boutiques, it was a dilemma figuring out how to regulate them,” he said. “We didn’t want to shut them down, so we came up with the garage sale permit idea.”

He said his office takes action if neighbors complain, but “we don’t get a lot of complaints--maybe only five in the last 5 years. A lot of the neighbors enjoy them.” But, occasionally, “the thing is overdone,” lasting an entire week and attracting a lot of annoying traffic.

The permit requires the sale to be outside, either in the back yard or on the driveway--not in the front yard. “Posting signs is the biggest problem” because they cannot be on public property and often the nails are a hazard.

He said several Burbank inspectors have a regular Friday routine of doing sweeps at major intersections where people post signs for the weekend. Inspectors remove the signs, go to the address and warn people that they need a permit.

The city of San Fernando is one of the few municipalities that polices weekend sales--the most popular time for boutiques and swap meets.

“Since the city is only 2.4 square miles, it doesn’t take much to drive around the whole town,” said Michael Moon, director of finance.

San Fernando offers a business license for a minimum $50 a year, or a special $1-a-day “swap meet” license if you sell less than 20 days a year.

However, for a $10 garage sale permit, residents can sell items at home for up to two consecutive weekends. Even churches and charity events need permits for fund-raising boutiques and rummage sales, he said.

Moon said San Fernando’s business code does not allow in-home businesses primarily because of building and safety rules. “We try to avoid having too much traffic in residential areas,” he said.

If inspectors see signs advertising boutiques, “we warn them,” he said. “Most times, people aren’t aware what the rules are. The codes are designed for public safety and to protect the neighborhood’s aesthetics. We’re not here to hassle people; we’re here to protect the public.” The penalty for operating an unlicensed business could be a misdemeanor citation.

“Boutique merchandise is mostly homemade and is a different type of item than is found in stores, so businesses don’t find this a problem,” said Viki Rudolph, executive vice president of the Santa Clarita Valley Chamber of Commerce. “In our community, most boutiques are done for charitable organizations so they are looked at as fund-raisers, not as competition to business.”