Establish a Home Studio Tips About the Licenses and Permits You Need

October 2023, by Daniel Grant

Richard Stankiewicz was an artist revered by all but his neighbors. An early “found object” assemblage artist, he created sculptures comprised of throwaway automotive and machine parts that were welded together and given new life. 

Seen in their finished states in museums, these sculptures seemed like a miracle. But the artist’s former neighbors in Huntington, Massachusetts, saw his backyard turn into a junkyard filled with old drive shafts and engine parts. “People complained about garbage on his lawn whenever he went collecting,” Stankiewicz’s friend and fellow sculptor Elliot Offner once said. “He talked all the time about the complaints he used to get.” 

People often think of artists being hassled by critics and dealers — not their neighbors and local government officials. But it is the locals who may complain the most. 

Some artists may rent a space in which to create work at a commutable distance to where they live, but quite a few artists set up studios in their homes. The latter adds to their convenience and sometimes to their troubles. 

The largest problems are creating too much noise in a residential neighborhood and generating too much traffic. Teresa Saborsky, a stone sculptor in Goshen, Kentucky, said she does not use her air chisels or angle grinder before 10 a.m. or after 7 p.m. because, “I don’t want to push it with my neighbors.” 

Carolyn Muskat, a lithography print artist in Somerville, Massachusetts, has been required to pay $150 to the city for each studio assistant or client so they may park their cars legally on the street. On occasion, she sets up exhibits in her studio, holding those events on Sundays, “because that’s the only day that parking restrictions aren’t in effect.” 

Home Occupation Ordinances 

The number of people in the United States working out of their homes has grown significantly, from 9 million in 2019 to 27.6 million in 2022, according to the U.S. Census Bureau. Undoubtedly due in part to the pandemic, more and more municipalities have responded with rules. 

These rules include the percentage of the dwelling that may be devoted to a business, the number of unrelated people working in the business, the amount of allowable noise and traffic, and signage. Municipalities have also responded with such things as fees for a license to allow such a business to operate within city limits and a permit allowing the business to collect state sales tax. 

The fees may be the same for a sole proprietorship as they are for a large corporation or could be set based on the amount of money earned or the number of hours in which work is done in the home. Raymond Boggs, vice president in charge of small and medium business and home office research at International Data Corp., noted these fees represent a growth area for communities and counties when other forms of tax collection have peaked. 

“Some cities don’t care if you make or lose money,” Boggs said. “They just want their license fee.” Annual permits and licenses to operate a home-based business cost between $25 and $200, and taxes range from $1 to $6 per $1,000 in gross income. A certificate of occupancy may also be required for those taking a deduction for a home office (for instance, a studio) on their income taxes.  

Artists’ studios are a small fraction of the home occupation realm. Topping the list are retail (people selling products from their homes), real estate agents, construction and building trades, and professional services (such as lawyers and accountants), followed by arts and entertainment, domestic services, and health care services. 

Artists are often surprised to find regulations they may associate with computer program developers and Amway distributors apply to them when they work at their own residences. Some artists do not bother to find out if there is a home occupation ordinance, or they hope to stay under the radar of local officials and are only notified of the need to pay a permit fee — and perhaps penalties — when they receive a citation after a neighbor complains.  

Some artists cannot hide from the government, particularly those who inhabit live-work buildings that are specially designated for working artists in the fine and performing arts fields. “In order to be eligible to live in one of our buildings, artists have to be certified as artists. They need to obtain a local business license,” said Linda Schanfein, executive director of ArtHouse, a joint project of the San Francisco Arts Commission and California Lawyers for the Arts that helps area artists find affordable live-work and work-only spaces. Mitigating their requirement to pay the $150 fee is the fact the rents they are paying are “a quarter of what the market rate would be,” she said.  

Painters tend to have the fewest worries about being reported, unless they generate a lot of traffic from visitors, employ numerous studio assistants, or like Kelley Daniel — an artist in Hilliard, Ohio — paint a giant sunflower on the side of their garage. After Daniel did so in 2009, a neighbor complained. Hilliard’s Planning and Zoning Commission, which must approve all changes in building exteriors, forced her to remove the image, saying in a letter, “Garage colors should match or be compatible with those of the house. Exterior colors should be subdued. No more than two colors should be used on Old Hilliard buildings. Color combinations should be simple. Mural has nine colors and a complex design.”  

Daniel ended up working with other artists to revise the guidelines and take them to the city council. In 2019, the city allowed her to uncover her sunflower mural. 

Printmakers are more apt than painters to draw the notice of neighbors because the cleaning solvents they use could have odors or affect air quality, and they also may have assistants or buyers who arrive regularly. 

Artisans who use kilns and sculptors have an even greater likelihood of affecting a neighborhood’s residential character. Saborsky, who also uses a blacksmithing forge, claimed she “can’t set up a permanent structure unless it’s approved by a homeowners association,” requiring her to do much of this work in her driveway. Rain and snow put her out of business, but “I need to be very mindful of other people.” 

Rules vary from one municipality to the next. The Washington, D.C., Department of Consumer and Regulatory Affairs stipulates that no more than 25% of the dwelling’s floor space can be used for the home occupation. The city of Fort Collins, in Colorado, allows up to 50%. 

In Seattle, no outdoor storage of items associated with the business is permitted, and in Bernards Township, New Jersey, commercial vehicles must be parked in a garage, not in a carport or in the driveway or on the street, although purely residential vehicles may be parked in those places. 

Goshen, Kentucky, with a population of just under 1,000, has few zoning regulations, allowing homeowners’ associations to chart their own course. Larger communities and counties are more likely to have ordinances. 

The home-based business permit in the village of Homewood, Illinois ($100 fee, paid with application, plus an annual $60 charge for annual inspections), stipulates that “the area set aside for home-based business use shall not exceed 20% of the total floor area of the residence,” while the Home Occupation Permit Application for Gresham, Oregon ($75 per year) forbids nonfamily members and nonresidents as employees, and “the home occupation shall not involve customers or clients coming to the residence.” 

Acceptable home-based businesses in Spanish Forks, Utah (between $25 and $300, based on expected gross income), are subject to 14 requirements, including no “exterior displays nor display [of] goods which are visible from the outside,” while rules set by the city of San Jose, California ($150 flat fee), restrict the amount of gas that may be stored in a residentially zoned building (that would affect welders) and prohibits any “Blight on private and public properties (old furniture, car parts, appliances, etc.),” That would rule out a Stankiewicz-type artist.  

Know Your Rights 

Peter Caruso II, a lawyer in Boston who represented artists on behalf of Volunteer Lawyers for the Arts of Massachusetts, said local ordinances restricting artists’ studios at their homes have been challenged successfully on constitutional grounds. “The government cannot tell you what you can put in your backyard unless there is a compelling governmental interest, such as something that attracts rats or endangers the public,” he said, adding that under the 14th Amendment to the U.S. Constitution, “the government cannot restrict someone’s ability to earn a living.” 

If a community’s zoning rules are so specific that an artist would not be able to create at all, that would violate their 1st Amendment rights. He said disputes between artists and their local governments do not reach the Supreme Court — or usually any court — but result in the artists repairing relations with the neighbors, applying for a license, and paying any citation.  

“It’s advisable to know what the local law is,” said Barbara Hoffman, “but compliance is another issue.” She is an attorney in New York City who represents several fine artists. Compliance may have its drawbacks for artists because they are entering an indeterminate relationship with a governmental agency. 

As with any other business, artists might be required to post their business licenses prominently where they work. They are potentially subject to unannounced inspections of the workplace to ensure compliance, with it possible their documents and records be reviewed at the same time. 

Artwork deemed pornographic by a city inspector might be subject to a municipality’s adult entertainment laws. Artists should contact the local planning and zoning authority and perhaps an attorney to determine which course of action to take. 

Some things to keep in mind are: 

Studio Tax Deductions 

A home studio is a business use of one’s home, permitting artists to deduct expenses that are a percentage of their rent, mortgage interest, utilities, insurance, repairs, condominium fees, home depreciation, and real estate taxes in proportion to the square footage of the home studio in relation to the entire house or apartment. An art studio that occupies 15% of a house may result in a write-off of 15% of all home expenses against art sales income. 

 The home studio must be an exclusive use of that space, rather than a shared or mixed use, so an artist would not be able to make deductions based on a bedroom that also is used for someone to sleep in. However, Joshua Kaufman, a Washington, D.C., lawyer who frequently represents artists, said that “nothing triggers an audit by the IRS more than home office deductions,” particularly for artists when they do not earn a profit in at least two years in a five-year period. 

Those whose expenses are greater than income in four out of five years are deemed “hobbyists” by the IRS, making them ineligible for artwork-related deductions. He said that on the positive side, information given to the IRS is “not shared with a municipality,” so artists operating a home studio without proper permits or licenses will not be turned in by the federal government. This helps artists avoid the contradictory problem of deducting home office expenses for the IRS while claiming to the community the art is only a hobby to avoid obtaining a license or certificate of occupancy.