HOUSE OF REPRESENTATIVES STAFF ANALYSIS
BILL #: CS/HB 403 Home-based Businesses
SPONSOR(S): Commerce Committee, Giallombardo and others
TIED BILLS: IDEN./SIM. BILLS: SB 266
REFERENCE ACTION ANALYST STAFF DIRECTOR or
BUDGET/POLICY CHIEF
1) Regulatory Reform Subcommittee 10 Y, 6 N Wright Anstead
2) Commerce Committee 14 Y, 8 N, As CS Wright Hamon
SUMMARY ANALYSIS
The Florida Constitution grants local governments broad home rule authority, and county and municipal
governments may also exercise those powers of self-government that are provided by general or special law.
As such, general law and home rule authority determines whether local governments are able to regulate
businesses, and to what degree. Currently, some local governments have enacted ordinances specific to
regulating home-based businesses, or businesses which operate out of a residence. Some local governments
regulate the types of businesses that may be carried on at a residence, and others regulate the space in which
business may occur.
The bill provides that local governments may not enact or enforce any ordinance, regulation, or policy, or take
any action to license or otherwise regulate a home-based business in a manner that is different from other
businesses in a local government’s jurisdiction.
In order to be considered a home-based business, the bill requires that:
the business operates, in whole or in part, from a residential property;
the employees of the home-based business reside in the residence, except for up to two employees
that do not reside at the residence. However, employees of the home-based business that do not
primarily work at the residential dwelling are not required to reside in the dwelling;
parking for the business activities of the home-based business complies with local zoning requirements;
as viewed from the street, the use of the residential property is consistent with the uses of the
residential areas that surround the property, but incidental and short term business uses and activities
are permitted; and
the activities of the home-based business are secondary to the property’s use as a residential dwelling.
The bill provides that home-based businesses will only be subject to applicable business taxes in the county
and municipality where the home-based business is located.
The bill allows any adversely affected current or prospective home-based business owner to challenge any
local government action regulating home-based businesses. The prevailing party may recover reasonable
attorney fees and costs.
The bill has an indeterminate fiscal impact on local governments and does not appear to have a fiscal impact
on the state.
The bill has an effective date of July 1, 2021.
This document does not reflect the intent or official position of the bill sponsor or House of Representatives.
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DATE: 3/10/2021
FULL ANALYSIS
I. SUBSTANTIVE ANALYSIS
A. EFFECT OF PROPOSED CHANGES:
Present Situation
Local Government Authority
The Florida Constitution grants authority for broad home rule by local governments. Non-charter county
governments may exercise those powers of self-government that are provided by general or special
law.1 Those counties operating under a county charter have all powers of self-government not
inconsistent with general law or special law approved by vote of the electors.2
Likewise, municipalities3 have governmental, corporate, and proprietary powers that enable them to
conduct municipal government, perform functions, provide services, and exercise any power for
municipal purposes, except as otherwise provided by law.4
Local Business Tax
The local business tax authorized in ch. 205, F.S., represents the fees charged and the method by
which a local government authority grants the privilege of engaging in or managing any business,
profession, or occupation within its jurisdiction.5 Counties and municipalities may levy a business tax.6
Revenue Sources Based on Home Rule Authority
Pursuant to home rule authority, local governments may impose proprietary fees, regulatory fees, and
special assessments to pay the cost of providing a facility or service or regulating an activity. A
regulatory fee should not exceed the regulated activity’s cost and is generally required to be applied
solely to the regulated activity’s cost for which the fee is imposed.7
Businesses and Occupations
General law determines whether local governments are able to regulate occupations and businesses,
and to what degree.8 If state law preempts regulation for an occupation, then, generally, local
governments may not regulate that occupation.9 For example, Florida law currently preempts local
regulation with regard to the following:
assessing local fees associated with providing proof of licensure as a contractor, or providing,
recording, or filing evidence of workers’ compensation insurance coverage by a contractor; 10
assessing local fees and rules regarding low-voltage alarm system projects;11
tobacco and nicotine products;12
firearms, weapons, and ammunition;13
1 Art. VIII, s. 1(f), Fla. Const.
2 Art. VIII, s. 1(g), Fla. Const.
3 A municipality is a local government entity created to perform functions and provide services for the particular benefit of the population
within the municipality, in addition to those provided by the county. The term “municipality” may be used interchangeably with the terms
“town,” “city,” and “village.”
4 Art. VIII, s. 2(b), Fla. Const. See also s. 166.021(1), F.S.
5 S. 205.022(5), F.S.
6 Ss. 205.033 and 205.043, F.S.
7 The Florida Legislature, Office of Economic and Demographic Research, 2020 Local Government Financial Information Handbook, p.
9, http://edr.state.fl.us/Content/local-government/reports/lgfih20.pdf (Feb. 10, 2021).
8 Art. VIII, s. 1(f), Fla. Const.; Art. VII, s. 9(a), Fla. Const.; Art. VIII, s. 2(b), Fla. Const.; s. 166.021(1), F.S.
9 Id.; Wolf and Bolinger, supra note 17.
10 S. 553.80(7)(a)5.c., F.S.
11 S. 489.503(14), F.S.
12 Ch. 569, F.S., and s. 386.209, F.S.
13 S. 790.33(1), F.S.
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employment benefits;14
polystyrene products;15
public lodging establishments and public food service establishments;16 and
disposable plastic bags.17
Conversely, Florida law also specifically grants local jurisdictions the right to regulate businesses,
occupations and professions in certain circumstances.18 For example, Florida law specifically
authorizes regulations relating to:
zoning and land use;19
the levy of “reasonable business, professional, and occupational regulatory fees, commensurate
with the cost of the regulatory activity, including consumer protection, on such classes of
businesses, professions, and occupations, the regulation of which has not been preempted by
the state or a county pursuant to a county charter”;20
the levy of local business taxes;21
building code inspection fees;22
tattoo establishments;23
massage practices;24
child care facilities;25
taxis and other vehicles for hire;26 and
waste and sewage collection.27
Home-based Business Regulations
Currently, some local governments have ordinances specific to regulating home-based businesses, or
businesses which operate out of a residence. Some local governments regulate the types of
businesses that may be carried on at a residence, and others regulate the space in which business
may occur. Examples include:
In Volusia County, home-based businesses are required to occupy no more than 25 percent of
the habitable floor area of the residence,28
In Tampa, home-based businesses may not be conducted in any accessory building;29
In Naples, home-based businesses are not allowed to conduct retail, wholesale, or warehousing
activities at the residence;30 and
In Gainesville, a home-based business may not have more than one automobile used for the
home-based business parked on the premises within view of surrounding properties. Such
automobile may not have more than two signs, not exceeding two square feet in area, each
mounted flat against or painted along the sides.31
Effect of the Bill
The bill provides that local governments may not:
14 S. 218.077, F.S.
15 S. 500.90, F.S.
16 S. 509.032, F.S.
17 S. 403.7033, F.S.
18 Supra note 16.
19 S. 125.01(1)(h), F.S.
20 S. 166.221, F.S.
21 Ch. 205, F.S.
22 S. 166.222, F.S.
23 S. 381.00791, F.S.
24 S. 480.052, F.S.
25 S. 402.306, F.S.
26 S. 125.01(1)(n), F.S.
27 S. 125.01(1)(k), F.S.
28 Volusia County, FL., Ch. 72, art. II, div. 8, s. 72-283.
29 Tampa, FL., Ch. 27, art. VI, div. 2, s. 27-282.5.
30 Naples, FL., Ch. 56, art. III, s. 56-92.
31 Gainesville, FL., Ch. 30, art. V, div. 2, s. 30-5.37.
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prohibit, restrict, regulate, or license home-based businesses in a manner that is different from
other businesses in a local government’s jurisdiction; or
enact or enforce any ordinance, regulation, or policy, or take any action to license or otherwise
regulate a home-based business in violation of the provisions in the bill.
In order to be considered a home-based business, the bill requires that:
the business operates, in whole or in part, from a residential property;
the employees of the home-based business reside in the residence, except that up to two
employees that do not reside at the residence may work at the residence. However, employees
of the home-based business that do not primarily work at the residence are not required to
reside in the residence;
parking related to the business activities of the home-based business complies with local zoning
requirements;
as viewed from the street, the use of the residential property is consistent with the uses of the
residential areas that surround the property. However, incidental and short term business uses
may be conducted at the residence; and
the activities of the home-based business are secondary to the property’s use as a residential
dwelling.
The bill allows a home-based business that operates from a residential property to operate in an area
zoned for residential use.
Home-based businesses will only be subject to applicable business taxes in the county and
municipality where the home-based business is located.
The bill allows any adversely affected current or prospective home-based business owner to challenge
any local government action regulating home-based businesses. The prevailing party may recover
reasonable attorney fees and costs incurred in challenging or defending the action, including
reasonable appellate attorney fees and costs.
The bill provides that it does not supersede any current or future declaration or declaration of
condominium adopted pursuant to chapter 718, Florida Statutes, cooperative document adopted
pursuant to chapter 719, Florida Statutes, or declaration or declaration of covenant of a homeowners’
association adopted pursuant to chapter 720, Florida Statutes.
The bill provides an effective date of July 1, 2021.
B. SECTION DIRECTORY:
Section 1 Creates s. 559.955, F.S., relating to requirements for home-based businesses.
Section 2 Provides an effective date of July 1, 2021.
II. FISCAL ANALYSIS & ECONOMIC IMPACT STATEMENT
A. FISCAL IMPACT ON STATE GOVERNMENT:
1. Revenues:
None.
2. Expenditures:
None.
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B. FISCAL IMPACT ON LOCAL GOVERNMENTS:
1. Revenues:
Indeterminate. The bill provides that home-based businesses will only be subject to applicable
business taxes in the county and municipality where the home-based business is located.
2. Expenditures:
Indeterminate. The bill allows a party to challenge any local government action regulating home-
based businesses. The prevailing party is entitled to recover reasonable attorney fees and costs
incurred in challenging or defending the action, including reasonable appellate attorney fees and
costs.
C. DIRECT ECONOMIC IMPACT ON PRIVATE SECTOR:
The bill may allow more home-based businesses to operate more freely and efficiently.
D. FISCAL COMMENTS:
None.
III. COMMENTS
A. CONSTITUTIONAL ISSUES:
1. Applicability of Municipality/County Mandates Provision:
The county/municipality mandates provision of Art. VII, s. 18 of the Florida Constitution may apply
because this bill prohibits local governments, except the county and municipality where the home-
based business is located, from collecting business taxes from home-based businesses. However,
an exemption may apply given that laws having an insignificant fiscal impact are exempt from the
requirements of Art. VII, s. 18 of the Florida Constitution.
2. Other:
None.
B. RULE-MAKING AUTHORITY:
The bill neither requires nor provides authority for agency rulemaking.
C. DRAFTING ISSUES OR OTHER COMMENTS:
None.
IV. AMENDMENTS/ COMMITTEE SUBSTITUTE CHANGES
On March 9, 2021, the Commerce Committee adopted one amendment and reported the bill favorably as a
committee substitute. The committee substitute provides that the bill does not affect or supersede any current
or future condominium association declarations, cooperative association documents, or homeowners’
association covenants.
This analysis is drafted to the committee substitute as passed by the Commerce Committee.
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DATE: 3/10/2021