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#159534 - 02/09/07 09:23 AM License, Registration & Bond fees
sparky 134 Offline
Member

Registered: 09/04/04
Posts: 92
Loc: Joliet, Il, USA
How do you handle the costs for license, registration and bond fees ? Do you add them to the cost of the job ? Do you try and average them across all jobs for the year ?

I personally add them to the job that requires them.

Here is why I am asking. I bid a job, was told by the GC we are doing the job BUT the customer has made revisions to the drawings, resulting in less work. The GC wants me to register with the village (which requires license, bond, reg.) to the tune of $200.00.

Since I don't have a contract on the job yet I sent him a C/O for the $200.00. He replied that NONE of his subs ever charge HIM for these costs. I replied that the other subs are probably including the costs but not breaking them out separately. According to him they are a cost of doing business (for me). He said he is paying for me to work in the village for the next year and if I get another job in the village he has paid for me to work. I replied what if I don't get another job. I have then lost $200.00 on your job.....

The GC said they average the costs of all the bond, reg's, etc. for the year and spread them out across all jobs. Not exactly sure how that would work due to a varying work load.

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#159535 - 02/09/07 11:01 AM Re: License, Registration & Bond fees
Happi_Man Offline
Member

Registered: 06/12/02
Posts: 213
Loc: Columbus, Ohio - USA
I usually bill the permit for the actual job to the GC but the registation and bond fees are my cost to do business in that municipality. That GC probably had to pay licensing and bonding fees to that municiplaity too. That's my view anyway, its an indirect job expense.

How about this fun fact: In the State of Ohio, we have to pay a Commercial Activity Tax at a minimum of $150.00 per year. The state's almost precise wording says that this is a tax we have to pay for having the priviledge of operating a business in Ohio. A priviledge...wow.




[This message has been edited by Happi_Man (edited 02-09-2007).]

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#159536 - 02/09/07 12:37 PM Re: License, Registration & Bond fees
ITO Offline
Member

Registered: 11/26/06
Posts: 341
Loc: Texas
1) Any cost directly associated with that job only is billed to that job, like the permit.

2)Any costs for license, insurance or whatever that applies to all work done by your company are covered as an overhead expense. (It’s should be part of your markup).

3) Not sure what “The Village” is but if they require some form of bond or fee to do business there, and you want to do work there, then you need to take care of it as part of your overhead.

5) You can not get a change order unless you have a contract, if they change the plans pre-contract then give them a new proposal.

6) DO NOT pull a permit for a specific job unless you have a contract.

[This message has been edited by ITO (edited 02-09-2007).]
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#159537 - 02/09/07 01:12 PM Re: License, Registration & Bond fees
sparky 134 Offline
Member

Registered: 09/04/04
Posts: 92
Loc: Joliet, Il, USA
Ito,

The village is the municipality in which the work will be performed. They require an electrical contractor to supply them (the village) with a surety bond in the amount of $10,000.00 which costs me $50.00. The bond is only good for work performed within that municipality. The village also requires a $150.00 registration fee from me in order to perform electrical work within the village. This registration typically lasts for one year although some municipalities expire all registrations on Dec.31 regardless of when it was purchased.

My electrical license and insurance are figured into my overhead. I see the bond and registration fees as a direct cost to the job, same as if I needed to rent a piece of equipment for the job.

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#159538 - 02/09/07 02:19 PM Re: License, Registration & Bond fees
LK Offline

Member

Registered: 01/21/03
Posts: 1721
Loc: New Jersey
"How about this fun fact: In the State of Ohio, we have to pay a Commercial Activity Tax at a minimum of $150.00 per year. The state's almost precise wording says that this is a tax we have to pay for having the priviledge of operating a business in Ohio. A priviledge...wow."

Well that's cheap try New Jersey, $550 every year, we have to pay for having the priviledge of operating a business in New Jersey.

We had those local fees years ago, then back in the 60's when state licensing came in, the local fees were made illegal, a good reason to lobby for state licensing.



[This message has been edited by LK (edited 02-09-2007).]

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#159539 - 02/09/07 04:37 PM Re: License, Registration & Bond fees
sparky 134 Offline
Member

Registered: 09/04/04
Posts: 92
Loc: Joliet, Il, USA
LK,

From what I have heard, the proposal for state licensing of electricians in Illinois has been presented to the Illinois General Assembly and they keep turning it down.

Don't know why. There are so many villages, cities, towns, etc that offer licensing. Some tests are 20 questions and some are 300 hundred.

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#159540 - 02/09/07 06:39 PM Re: License, Registration & Bond fees
ITO Offline
Member

Registered: 11/26/06
Posts: 341
Loc: Texas
Sparky,

If that will be your only job in that municipality then yes add it to the bid, but if you will do (or intend to do) more work there then cove it in overhead. It’s really not something you can get a change for and you probably don’t want to talk to your client about it or you will get into the same conversation you already have had with him about this. Just make sure it is covered one way or another. If there are deductive changes comming then keep $250 from one of the changes and cover it that way.

Unless you have a contract there is nothing really to do about it, if your client insists you get it now, ask for a “letter of intent” or better yet a contract, then go take care of your fees.


[This message has been edited by ITO (edited 02-09-2007).]
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#159541 - 02/09/07 06:44 PM Re: License, Registration & Bond fees
Jps1006 Offline
Member

Registered: 01/22/04
Posts: 609
Loc: Northern IL
What I do is print out a copy of this: (I got from this site)
 Quote:
(65 ILCS 5/11 33 1) (from Ch. 24, par. 11 33 1)
Sec. 11 33 1. The corporate authorities of each municipality may require the registration of electrical contractors, and may impose an annual registration fee of $25 on each registered contractor. An electrical contractor who is registered in one municipality, however, shall not be required by any other municipality to be registered or to pay a registration fee in the other municipality.


I give it to the GC and tell them I am not legally obliged to pay those fees. They are more than welcome to argue with the village, I won't. I pay (1) license, (1) registration, and (1) bond to my hometown as overhead because that is the one that validates my license.

The fact that the GC says none of his other trades bill the job tells me he is either lying (most likely), inexperienced, or does all his work in the same village and uses the same subs that are already paid up.

I have this entered as a line item in Quickbooks as permit disclaimer

 Quote:
Permit to be obtained and paid for by others. Price does not include any village or city registration, license, bond (if required) or permitting fees. Your Company here Electric, Inc. is currently licensed, bonded and registered in Your city here. Other cities or villages may be extra if registration is not current.


Last time I had a guy (a long time ago) give me this line
 Quote:
is paying for me to work in the village for the next year and if I get another job in the village he has paid for me to work

I told him if I got another job in the next year I'd mail him a check for half the fee. At least he had a sense of humor and got the point.

Every GC I work for understands this fee is billed to the job.


[This message has been edited by Jps1006 (edited 02-09-2007).]

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#159542 - 02/09/07 07:50 PM Re: License, Registration & Bond fees
sparky 134 Offline
Member

Registered: 09/04/04
Posts: 92
Loc: Joliet, Il, USA
 Quote:
quote:
--------------------------------------------------------------------------------
(65 ILCS 5/11 33 1) (from Ch. 24, par. 11 33 1)
Sec. 11 33 1. The corporate authorities of each municipality may require the registration of electrical contractors, and may impose an annual registration fee of $25 on each registered contractor. An electrical contractor who is registered in one municipality, however, shall not be required by any other municipality to be registered or to pay a registration fee in the other municipality.


I have used this successfully in two villages. One claimed no knowledge of this law and the other said, "Yes, we are aware of it and since you mentioned it we can't charge you."

I had one village tell me I can argue the fee but by the time the village makes it decision the job would have been completed a LONG time ago... In other words, just pay the fee.

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#159543 - 02/09/07 07:56 PM Re: License, Registration & Bond fees
Jps1006 Offline
Member

Registered: 01/22/04
Posts: 609
Loc: Northern IL
If you state in the proposal that none of those fees are included, then it's not yours to argue, let the homeowner or GC fight them. If they want you to include those fees in your contract, then no problem, let the owner or GC pay them through you.

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