I just read this thread and was disgusted by the treatment you received. While I do not care to comment on state or county ordinances I would like to offer some advice on dealing with HOA's. There are ways to nullify them but they require alot of work, time, and legal fee's. Most states require HOA's to keep a minimum funds reserve in order to be legit. Many HOA's do not keep that balance where it is required to be legally. If you can get the financial information (they legally must provide this to you if you are subject to their rules) and prove they are below the legal threshold it nullifies their authority. Many HOA's also fail to include a key phrase in the rules, regulations, and by-laws which if any of the stipulations are found to be unenforceable voids the entire "contract". Usually when dealing with HOA's once you involve a lawyer (preferably a high powered one) they back down very quickly. It seems that the thought of the cost of a legal battle, bad press, and accusations of constitutional rights violations is not very appealing to them. I can't emphasize enough though that you need to get an attorney to be successful against them. Very few people are successful challenging HOA's without one.
As far as businesses go the IRS does not recognize hobby businesses. Unless you are producing and selling enough stock to meet the minimum additional income declaration of $500 after expenses you are not required to register as a business or report it as additional income. If you do report the income you need to be registered as a business in order to get the deductions. Deductions include: electricity, bedding, water, heating elements, cleaning agents, websites fees, vendor fees, insurance, local taxes paid, transportation costs, vet fees, percentage of home dedicated to business, phone charges, acquisition of new breeding stock, shipping supplies, feeders, business license fees, legal fees, accounting fees, permit fees, anti-venom, and so on. You need to check with your state to find out if the animals are taxed as property but in most cases they are not. Any equipment you declare is taxable as property. Most businesses do not declare every piece of equipment but rather only the large pieces. Equipment must be depreciated as it ages for tax purposes and right off purposes.
I know of very few private hobbyist that generate enough income to bother with the paperwork involved in running a business. Most state and local offices do not consider it worth the effort and cost to enforce business licenses on an individual breeding a few snakes or lizards. However, if you are selling $2500 pet snakes then you had better set up properly, but if the majority of what you do is a handful of colubrid or python clutches or even a litter or two of boas a year you will probably be alright calling it a hobby and leaving well enough alone. Of course if in doubt talk to your tax adviser and lawyer and follow their recommendation. I can tell you I maintain and breed a small colony of snakes (under 50 adults colubrids and boids) and my accountant, after reviewing costs incurred, informed me that if I ran it as a business it would show a loss every year based on what I produce sold at market value and what my expenses are with what would be the additional added expense of costs associated with running a business (in other words the eligible deductions). As it stands currently the hobby is self supporting, in other words; it breaks even or shows a slight profit depending on the year.
The benefit in taxable goods (sales tax on supplies) created by hobby businesses far outweighs the taxes that might be collected on said businesses which is why most municipalities do not force the issue. I have had no problems with showing my animals to people and have known both the game warden and head of animal control for years. The best thing you can do is get to know those who are charged with enforcing the laws and try to work with them. Then if you have a problem they are more willing to help you deal with it appropriately without your jumping through hoops. Hiding the animals as some one else suggested only leads to the conception you are doing something you are not supposed to do or have something you legally should not. The best policy is to be open and patient with people while trying to educate (not lecture) them about the animals themselves. I hope some of this is useful and wish snakelady the best in her future endeavors.
