It may have something to do with sales tax. In Cal there is no sales tax on service(s). You will have to set up your accounting to track the tax vs. non-tax aspects of the business. As far as I know you won't necessarily have "two" businesses.
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You would think the govt would want to make it easier for peeps to step out into a small business.
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About two weeks after buying my own business and discovering all the BS and all the proverbial "hoops" I had to jump through in order to please the Gov. I became a Republican.
Bill