Business licensing in Detroit
These information pages can help you get started in learning about some of the laws and registration requirements that may apply to your experiences on Airbnb. These pages include summaries of some of the rules that may apply to different sorts of activities, and contain links to government resources that you may find helpful.
Please understand that these information pages are not comprehensive, and are not legal advice. If you are unsure about how local laws or this information may apply to you or your Experience, we encourage you to check with official sources or seek legal advice.
Please note that we don’t update this information in real time, so you should confirm that the laws or procedures have not changed recently.*
I’m hosting Experiences or a Trip in Detroit. Could I be considered a business in the eyes of the law? What should I be thinking about if I am considered a business? Do I need a permit or license?
The City of Detroit requires these types of businesses to get a permit or license. In general, most Trips and Experiences shouldn’t fall within these business types. If you’re not operating one of these types of businesses, the City doesn’t require you to register, but the State might.
In addition, the Michigan Department of Treasury requires you to register with the Department if (1) you have employees helping you with your Trip or Experience or (2) you sell retail goods like furniture, clothes and jewelry (which they call “tangible personal property"). If you don’t plan to hire any employees or sell retail items as part of your Trip or Experience, you won’t need to register your business with the Department of Treasury.
That said, we encourage you to carefully review the list of businesses that have to get licensed by the City and the State. You should also contact the City and the state’s Department of Treasury, or speak with a lawyer to make sure you’ve met all City and state requirements before hosting your first Trip or Experience.
Example 1, no registration: Anna is a trip host who runs experiences one week per month where she shares her love of handmade jewelry by bringing her guests to her favorite boutiques in Midtown. She runs her experiences alone.
Anna doesn’t need to register her business or get a permit from the City in order to provide guided trips to her favorite places. Because she isn’t selling any retail goods and doesn’t have employees, Anna doesn’t need to register her business with the state either.
Example 2, state registration: Anne is a trip host who runs experiences one week per month where she brings guests to her workshop in Midtown where she demonstrates how she makes handmade jewelry. Guests have the option of purchasing Anne’s jewelry separately after her demonstration. Anne runs her experiences with the help of her employees who also work at her workshop.
Anne doesn’t need to register her business or get a permit from the City in order to show guests how her jewelry is made or to sell her jewelry to guests. But because she is selling a retail goods and has employees, Anna needs to register her business with the state.
Is there anything else I should be thinking about?
Yes. You should consider the following.Assumed Name Certificate
Most Trip Hosts on Airbnb use their own name on their Listings. If you plan on doing the same, you don’t need to fill out any additional forms.
If you don’t want to use your own legal name for your business, you must apply for a Conducting Business Under an Assumed Name certificate with the Wayne County Clerk. To do this, first make sure that the name you want is available using the State Database Entity search and by contacting the County Clerk’s office. Then bring three copies of your completed form along with a $16 filing fee in-person to the Clerk’s office.Home Office
If you run a business out of your home, the Detroit Building Safety Engineering and Environmental Department requires you to use your home predominantly as a place to live, not as a place of business. This means:
- No more than 25% of the home or 500 square feet can be used for business purposes (except in lofts, which may occupy up to 45%);
- In R1 and R2 zoning districts, no advertising can be added to the home; in all other districts, you can have 1 non-illuminated, affixed sign measuring 144 square inches (you can go here to find your zoning district);
- Your business cannot create a nuisance or cause an increase in traffic by visitors, clients, or customers beyond the normal amounts and timing of traffic in your neighborhood;
- You can’t physically change the home in a way that makes it non-residential; and
- In R1 and R2 zoning districts, no employees who do not already live in the home may work at the home, and in all other districts, no more than 2 employees who do not already live in the home may work at the home (you can go here to find your zoning district). At least one off-street parking space must be provided for each employee.
For more details, check out the Detroit Zoning Ordinance (Sections 61-12-381 to 61-12-394). You should also check with the City or speak to a lawyer before hosting an Experience out of your home.Activities and licenses
Depending on the activities involved in your Trip or Experience, you may need to register, obtain licenses, or follow specific rules that apply to that activity. Our section on the various activity specific topics covers some of the typical activities, but it is not exhaustive. You should always check with the City or speak to a lawyer to determine which permits and licenses may be required for the experiences you are offering.Employees
If you plan to hire employees as part of your business, you may also be required to obtain an employer identification number (EIN) from the IRS. (Note: a sole proprietor without employees can use their Social Security Number instead of an EIN.) The IRS also provides other useful information on taxes that apply to small businesses.Tax and accounting
You should also check what tax and accounting rules apply to you, as you may need to pay personal income tax, sales tax, and Michigan business tax. Also make sure you have the right insurance in place to cover all the activities you will be providing.
What resources are available to me to help me get set up as a business?
We encourage you to take advantage of the free resources provided by the Detroit Economic Growth Corporation, including the Guide to Starting and Operating a Small Business, as well as the SBA’s Resource Guide for Small Businesses, Michigan Edition. The Michigan Department of Treasury and the IRS also provide useful information on taxes that apply to small businesses.
Are there additional laws that apply to me as a result of my hosting Trips or Experiences?
Yes. Several consumer protection laws, like the Federal Trade Commission Act and Michigan’s Consumer Protection Act, require you to truthfully describe your Trip or Experience in your Listing so your guests can make informed decisions. This means that:
- The information you provide to Guests must be accurate and not misleading.
- You accurately and completely describe in your Listing the main characteristics of your Trip or Experience, as well as what is included and any special terms and conditions (for example, my favorite local craft cocktail bar Experience includes the first round of drinks, but guests must pay for additional drinks out of pocket)
- You do not offer a service that you do not intend to provide
- Your price is accurate, and you do not List a Trip or Experience at one price and then charge an additional fee when your guests get there.
In sum, this means that you need to provide the services advertised in your Listing, within the advertised dates and times, at the advertised price. For more information, the FTC provides helpful guidance on truth-in-advertising, which we encourage you to review.
*Airbnb is not responsible for the reliability or correctness of the information contained in any links to third party sites (including any links to legislation and regulations).
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