tax: Municipal governments often impose a hotel/motel room tax to generate additional revenues. You should check with your municipality to see if they impose this tax. Some municipalities exempt B&Bs.
(d) Goods and Services Tax (GST) and Harmonized Sales Tax (HST) in Canada: If your business is located in Canada and generates an income of at least $30,000 per year, you must register with the appropriate tax agency for remittance of sales taxes. In most provinces and territories, taxes are remitted to Canada Revenue Agency (CRA). In Quebec, taxes are remitted to Revenu Quebec.
If you are registered with a tax agency, you must charge your guests sales tax on their transactions, and remit the taxes. This sales tax is usually called GST, but some provinces have replaced the GST with the HST, which combines the GST with their own Provincial Sales Tax. Ontario, Newfoundland/Labrador, and New Brunswick have an HST of 13 percent, Nova Scotia has 15 percent, and British Columbia has 12 percent. These figures are subject to change; check with your local tax agency for up-to-date information.
If your business generates less than $30,000 per year, you have the option not to register with the tax agency. In that case, you would not collect taxes from your customers. Keep in mind that most groceries are tax-exempt; however, taxes may be charged on paper products, garbage bags, cleaning supplies, and so on. Services such as accountants, booking agents, and contractors must often charge GST or HST as well. Note that sales taxes on business purchases can be recovered as a business expense.
Most small B&B operators in our area have chosen not to register with a tax agency. You must be the final judge, but let your accountant be your guide.
5. Bylaws and Zoning
There are many regulations you must adhere to before you can open your doors for business; it is not enough to register your name. You must also consider local bylaws and zoning requirements that affect your business.
Municipal bylaws specifically regarding B&Bs are strikingly similar across North America. Most municipalities regard B&Bs as a special type of business, different from hotels and motels. The majority of bylaws concerning B&Bs reflect some or all of the following limitations:
• The dwelling is residential.
• No more than one meal per day is served.
• No guest cooking facilities permitted.
• Length of stay is limited.
• The number of guest rooms is limited.
• Off-street parking is required.
• Must be owner-operated.
• Any building changes must be reversible to the original residential use.
• Its operation must not affect the characteristic of the neighborhood.
• It must be licensed and inspected.
Zoning bylaws exist to control the type of activity allowed on any piece of property. You must check with your municipality to determine if a B&B is allowed on your property. Most municipalities do allow this type of business in a residential zone. If they do not, you can and should apply to your council for a zoning variance before you proceed with your plans.
6. Business Licenses and Inspections
Before you are granted a business license, the municipality will probably require your premises to undergo fire, building, and health inspections. Even if your municipality does not require a license or inspections, it is useful to look at the details of typical inspections to identify how you can make your home as safe as possible. Any steps you can take in this direction will also help your insurance premiums.
6.1 Fire inspection
You should contact your local fire department for advice on the best way to meet specific code requirements. A fire inspection will concentrate on the following criteria:
(a) Containment is the ability of the structure to resist the spread of a fire so that the occupants can escape. The building materials used in the floors, walls, and ceilings need to have a specific rating of fire resistance. Typically, the local fire code would require these materials to have a fire resistance rating of three-quarters of an hour.
(b) Egress refers to the number and type of escape routes available to occupants during a fire. The fire codes in your area will specify the number of stairways and exit doors required for your home. A typical code would require one fire exit from each of the first and second floors, and two fire exits from the third floor. In a B&B, the interior stairway is usually considered to be a fire exit.
(c) Detection specifies the number, locations, and types of fire and smoke detectors needed in your B&B to adequately warn your customers. Typical codes call for smoke detectors on all levels of the house and heat detectors at special locations.
(d) Suppression refers to the number, locations, and types of fire extinguishers needed to meet your local fire code. Typical codes call for five-pound multi-purpose dry chemical extinguishers on all levels and at all exits.
6.2 Building inspection
A building inspection will first concentrate on the physical integrity of a house and its general state of repair. If you have kept your home well maintained, you should have no problem. An inspection will also review the availability of proper customer accommodations. Your municipality may have guidelines that specify the number of bedrooms allowed, the washroom facilities needed, and the eating arrangements required.
Safety concerns include anything that could present a hazard to your guests. Typical problems could be loose floor boards, unsafe electrical wiring, etc.
The inspector will also review any regulations about signage: the type, size, and location of any signs advertising your business. You can contact your local building department to find out the standards.
6.3 Health inspection
A health inspection will be concerned with the following:
(a) What is the availability and quality of water, light, and heat? Generally, water must be potable (drinkable), and the temperature of the hot water must be restricted to avoid scalding. Light levels for bathrooms and hallways will have to meet minimum standards and room air temperatures must meet minimum and maximum allowable limits. A typical code specifies a maximum bath or shower water temperature of 120°F (48.9°C) and light levels of 30-foot candles in the bathrooms and 10-foot candles in the hallways. The minimum winter room temperature might be set at 68°F (20°C).
(b) Your house may have to meet minimum size requirements for the guest bedrooms, bathrooms, sitting rooms, and eating areas. The location of these rooms is also important. Typical codes specify bedrooms to be a minimum of 65 square feet (6 m2), with dining and sitting areas to be a minimum of 15 square feet (1.4 m2) per person. The codes might also note that furnace or utility rooms cannot be used for sleeping areas, and that bathrooms cannot open directly into any food-preparation or dining area.
(c) Bathroom specifications cover the health and safety of guest bathrooms. Typical codes specify that grab bars and nonskid surfaces for tubs and showers must be in place. Other requirements might include mechanical ventilation and lockable doors for privacy.
(d) Linen requirements deal with the availability of private towels and washcloths and the minimum number of bed linen changes. Generally, bed linen must be changed after each visitor, or once per week, whichever is less, and clean towels and facecloths must be provided for each guest.
(e) You must consider the proper storage, preparation, and disposal of guest food. Typical codes require that the refrigerator maintain a minimum temperature of 45°F (7.2°C) and that sanitary procedures for food preparation areas be carried out. The code might also specify adequate garbage storage and disposal.
7.