Senior spouses will recall a time when operating a home-based business on a military installation was an illicit activity that could result in having you and your family kicked off base. While you wouldn’t want your neighbor to receive an eviction notice for selling jewelry, regulations that would prohibit home-based businesses on base would put a convenient stop to the endless stream of shopping party invitations!
For as long as most junior spouses have been alive, however, operating a home-based business on a military installation has been not only legal, but encouraged as a means of helping military families supplement their income. As with anything in the military, though, running your business from your dining room table (or spare-bedroom-turned-office if you’re lucky enough to score a larger house on your installation) comes with its own set of regulations.
As military spouses, we need to be flexible with both our work and living situations. Though you may prefer to live off base, you might find yourself in a situation where living on base makes more sense for your family for a short period. And if you have a home-based business, then it’s important to know how living on base could affect you. Approach your business activities in a manner akin to operating within the confines of a rather strict Home Owner’s Association.
5 Ways that Operating Your Home-Based Business on a Military Installation is Similar to Operating under an HOA:
- There’s a Regulation that Permits You to Have a Home-Based Business. Most HOA’s specify that home-based businesses are permitted. Some states, such as Maryland and Vermont, have enacted state laws to permit home-based businesses that override any HOA regulation that prohibits them. On military installations, the DoD Authorization Act, Section 806, Employment Opportunities for Military Spouses, passed on November 8, 1985 permits home-based businesses. This law was written specifically to give spouses the opportunity to earn supplemental income.
- You Must Request Permission to Operate Your Business. Anyone pursuing a commercial venture in family housing must first obtain prior permission from the base commander. This applies to family housing in all branches of the service. The family housing management branch can help you ensure that your request is submitted through the proper procedures.
- Solicitation is Prohibited. As with an HOA, door-to-door solicitation is prohibited. This prohibition on solicitation also applies to door-to-door signage. If your business relies on operating in your neighborhood, then this significantly limits your options for advertising your home-based business in your market. If you’re planning on operating a business that requires customers in your immediate vicinity, then you’ll need to think of creative ways to market to them, such as through paid advertising in your family housing newsletter or through social media marketing in spouse’s groups for your military installation. MilitaryByOwner also offers local advertising opportunities to help you reach military families at your installation.
- You Must Operate within Local and State Regulations, Too. Just as if you lived in an HOA community off-base, you’re still subject to local and state regulations. So, unless your business is an online-based business registered in a tax-friendly state such as Delaware, then your business is subject to local taxation. Similarly, your business is also subject to local and state licensure and continuing education requirements
- Orderliness is Valued More Highly than Your Profiteering! Air Force Housing Manual Section 15-4 (a) states, “In no case will commercial activities be authorized or continued at the expense of community tranquility, safety or the installation mission.” Both the Navy and Army have similar language written into their housing authority manuals, too. That statement means that if Susie raises the heckles of her neighbors by overpromoting her Scentsy or Pampered Chef sales, then the base commander is entitled to shut down the operation. The same goes for little Timmy’s after school dog walking service. If Timmy can't keep Mrs. Smith’s yelping Yorkie from harassing and attacking the neighborhood dogs on his daily walk, then Mrs. Smith may need a new dog walker, as Timmy’s operation fails to meet safety standards for the installation.
Unlike off-base housing, there are some facts that military spouses should understand about operating a home-based business on a military installation.
Types of Businesses are Limited. When considering operating a home-based business on a military installation, some of the traditionally approved home-based business options are:
- Accounting
- Animal grooming
- Computer programming, maintenance, and repair
- Craft or design services
- Direct sales, such as Stella & Dot, Mary Kay, and Rodan & Fields
- Dog walking
- Event planning
- Hairdressing
- Housecleaning
- Tutoring
- Transcription
- Sewing/tailoring
- Woodwork
- Writing
On base, in-home childcare is an entirely separate matter. It is subject to more stringent regulations as child care falls under the purview of the base commander and the Child Development Center.
Capitalism Does Not Reign on Base. While you may believe that competition serves to help your potential customers, the base does not permit a healthy dose of competition with its own merchandise and services. No business on base can be construed to be competing with the installation’s main commercial enterprise, the Exchange. The base commander is not permitted to approve the home-based business application of a business that fits the criteria of a competitor.
This situation is even more challenging for military spouses overseas. Many military spouses own photography businesses, which is a viable, portable business. However, on installations where the military Exchange on base has photography services, spouses are not permitted to run their own photography service. Military spouse Jennifer Lucia put forth a petition on Change.org to request that spouses receive permission to operate home-based photography businesses in OCONUS military housing. However, her petition (AAFES Exchange Photography Services) ended, as it only received 319 out of 1,181 signatures toward her goal.
The Higher Your Rank, The Smaller Your Market. The Joint Ethics Regulations are quite clear on the fact that you cannot solicit sales to subordinates. In section 2-205, Limitation on Solicited Sales, the regulation states, “A DoD employee shall not knowingly solicit or make solicited sales to DoD personnel who are junior in rank, grade or position, or to the family members of such personnel, on or off duty.” However, if the individual chooses to purchase a good or service from you upon seeing an advertisement, then that does not constitute solicitation, and is thus legal. The regulation reads, “The posting of an advertisement in accordance with Federal Government building management policies does not constitute solicitation for purposes of this section.”
If you operate a home-based business on a military installation, look for our upcoming blog on home office deductions to see how where you choose to live can affect your tax deductions!
