View Full Version : Do you have a Business License?
05-02-2005, 03:08 PM
I've been wading through the government pages on the web trying to determine if I need a Business License. This is further complicated by being a resident of California where everything is more difficult because there is an environmental protection law covering EVERYTHING!
I've figured out that I need a seller's permit if I am going to sell something, I guess. Do any of you have that? What other steps has anyone taken to legitimize their art business?
05-02-2005, 03:18 PM
Here in Colorado, we get a business name/license if we sell a substantial amount and want to claim expenses against the sales. If it's just a random sale here and there, which it is for me at this point, I just put the sale money on the tax return as income and leave it at that. Of course, I COULD do the business deal and declare a loss (I figure it's gonna be a loooong time before I make more than I spend art-wise!), but right now it's scarecly worth it.
We also don't need a seller's license for the city unless we're setting up somewhere and selling paintings from a park or roadside, etc. by ourselves. If we're part of a bigger arts show, the show sponsors usually take care of any needed permits, etc.
I think the bottom line is how much you intend to sell and how. Rent a gallery and start selling like a retailer and yes, you'll need all the requisite licenses and permits that go with any business. When I had my little art supply shop, I combined my teaching, sales of paintings, and sales of art supplies under one business umbrella...was much easier that way and worked well for me. Not sure that would still be kosher these days, but there were no complaints back then...both the feds and the state got their due, so they had nothing to complain about. Even with all that, it took me two years to show a VERY small profit!
If I were you, I think I'd check out the Business section on WC! and see what they recommend. You might also ask a local accountant how best to handle it.
PS...there ARE advantages of becoming a true business. I became one back when I had the shop because the business number the state assigns allowed me to order at wholesale prices from my supplier. And it really does help offset cost of supplies, gear, etc.
05-02-2005, 09:24 PM
yikes- accounting gives me a headache- I will just stay with Martha on her estate and put candles in glasses if I ever sell anything! :angel:
05-02-2005, 09:26 PM
I'm also in Colorado, and I do have a business license. I only have to remit and file sales taxes once annually, so it's not too much of a problem. I decided to register my business name and get the license mainly so that I could purchase framing supplies at wholesale cost. Quality frames are so expensive!
But every state and county is different, so I think it would be good to check out your local situation. Most states and counties have good info on their websites.
Good luck.......paddling the waters of government do's and don'ts can be quite an experience!
05-05-2005, 08:04 AM
I'm in Ohio, and I have a transient vendor's license, which allows me to sell in any county in the state, sell, and collect sales tax which I submit twice a year--also allows me to get "wholesale" prices at some stores, not pay sales tax on supplies, and get into a crafter's wholesale store. I also have a registered business name, which allows me to have a business checking/debit account.
For federal, I believe you only need a "license" if you're going to have employees or be incorporated. If you're a one-person business, you can just use your social security number as your indentifying number for your business. That's what's actually on my transient vendor license. Then, you file a schedule C with your tax return every year. The lady who does my taxes gave me a handful of different classifications of expenses, and that's how I track what I spend every year. It's not really hard. Doing it this way does allow you post a "loss" on your taxes, but if you do that too often, most accountants will take you over to, I believe it's something like income from a hobby, which means that you can only deduct your expenses up to your income, but not over.
I'm no expert, but this is what I found out.
You might want to call your local Small Business Administration, they often offer free services to get you going, or mentoring services by retired professionals. Ohio even has a department called "First Stop" which sends you a kit with all of the forms and "directions" <ahem> on how to fill them out. It's basically one guy and a phone, that when you call him, he says, "Yeah, yeah, yeah, what kit do you want?" And, they have an arts/crafts business kit which I got, included federal forms as well.
05-05-2005, 09:37 AM
In Mass. and Maine you need a sales tax number. Well, if you only sell a couple of things now and then you probably don't but sice I sell antiques in both states I needed it anyhow and doing shows you absolutely need it. Most show venues won't allow you to sell without it. It isn't really a license though, I don't think.
I think it depends on your state. BUt probably not....she said, not having a clue what she is talking about! :D
05-05-2005, 10:06 AM
Mikki - it sounds like CA could be difficult. I would sure cover all your bases with them if you plan on opening a business, or selling a bunch of paintings on your own. If you sell through a Gallery, you can check with them, but I would imagine they would take care of reporting and turning over any sales tax due to them.
If you open a business, you will need to report your income to both State and Federal - it is easy to get a Federal ID number. My accountant helped me with that.
As Sandy mentioned, if you plan on setting up at art shows and events, you will probably need a license (maybe city and state??).
05-05-2005, 11:58 AM
Thanks everyone for all the great information! Once again I feel strongly compelled to get the heck out of this messed up State! They are so busy courting big corporate types, they don't even have a category for Artist or Hobbyist or Craftsman or anything like it. My County is very helpful about getting a seller's permit and whatever else I might need at the County level. Guess I'll start with a seller's permit and shell out the bucks for an accountant to set me up otherwise. What a hassle! There is no way I'll ever sell enough to exceed my expenses!
vBulletin® v3.5.8, Copyright ©2000-2020, Jelsoft Enterprises Ltd.