Many states require anyone who engages in commerce to obtain a license, permit, or other legal permission to operate. Across the country, in past years, this led to absurd headlines such as:
Through the work of Libertas Institute, Utah became the first state in the country to legalize commerce for kids by prohibiting local governments from requiring permits, licenses, fees, taxes, etc. Other states have followed, to varying degrees. Below is a list of states with these types of laws on the books.
The exemption is rather simple and broad, covering not just lemonade stands but things like babysitting, lawn-mowing, dog-walking, and other entrepreneurial activities of minors.
**10-1-203. License fees and taxes**
(7) A municipality may not: (a) require a license or permit for a business that is operated: (i) only occasionally; and (ii) by an individual who is under 18 years old;
Similar language was created in 17-53-216(4) ****to apply these exemptions to counties.
Additionally, Utah explicitly exempted infrequent businesses, such as lemonade stands and our Children’s Entrepreneur Market events, from being subject to sales taxes.
**59-12-106.** Definitions -- Sales and use tax license requirements
(2)(m) … You are not required to complete or return this form or to collect sales and use tax if you are not regularly engaged in the business of selling the items you are offering at this event or all of the items that you are selling at this event are exempt from sales and use tax…
Several other state legislatures have passed some type of youth entrepreneurship exemption, though most are narrowed in scope and need improvement.