Whenever I get a chain email with a link to these types of stories, which are very light in details and are clearly designed to create shock, I am always dubious.
I would be surprised if it was just a coincidence the city got involved and it wasn't another business who didn't want to deal with competition -- given a choice between a fifty cent glass of lemonade from a cute 7 year old girl and a $2 Coke from a licensed stand, who would go to the legitimate stand?
There is a huge gray area when it comes to child run businesses. At what point does a kid selling beverages go from just a kid earning a few dollars to an actual business? The same thing with lawn mowing -- I think everyone agrees that it's fine for a 9 year old to mow lawns in the summer but what is the cutoff for when it needs to be treated like a business; 5 yards, 10 yards, etc.?
How should these things be determined -- by age or total revenue? Or should it be based on location -- front yards are OK, as well as art festivals, but not downtown?
When I was a kid and teenager, I shoveled snow, mowed yards, and sold drinks to construction workers. I made pretty decent money at it too. Looking back, I was in direct competition with legitimate businesses -- of course I could mow a yard for $5.00 when I didn't pay taxes, have a license, insurance, etc. I could also resell cans of Coke for 40 cents when I had no overhead.
My kids do the exact same thing now. Maybe a landscaper will report them to the permitting office and we'll make national news.