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Business License?
DodgeV83
Registered Users Posts: 379 Major grins
Ok let me make sure I have the facts straight...
If I only sell on Smugmug, no on-site or anything else, I do NOT need a business license correct? Smugmug makes the sale, not me. I DO however, have to declare the profit I make from Smugmug as income.
Right?
If I only sell on Smugmug, no on-site or anything else, I do NOT need a business license correct? Smugmug makes the sale, not me. I DO however, have to declare the profit I make from Smugmug as income.
Right?
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A former sports shooter
Follow me at: https://www.flickr.com/photos/bjurasz/
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What do you mean? I just started using a custom domain if thats what you mean. I'd go back to name.smugmug.com if that causes problems.
I'm talking about going to sporting events and taking pictures of athletes. Maybe selling some portraits of my friends.
A former sports shooter
Follow me at: https://www.flickr.com/photos/bjurasz/
My Etsy store: https://www.etsy.com/shop/mercphoto?ref=hdr_shop_menu
I believe you will need a business license if you are "operating" as a business. If you are taking photos with the intent to sell for profit then I believe that may be classed as a business. Could also be a monetary threshold. IRS has a lot of business information on their site. Also surf over to your State web site for information pertaining to what is a business. If you are only doing it as a hobby then maybe not.
At an event last month was informed by the regional muckity-muck that in order to sell images I would need a license. Not sure if they knew what was correct or not - just passing on information.
"Tis better keep your mouth shut and be thought of as an idiot than to open your mouth and remove all doubt"
I had a retail biz for several decades. Never was it even suggested that I needed a business license. I was operating a brick and morter store with a county address vs. a municipal one, but still.... it just never came up.
My understanding of Illinois law here concerning such things was that certain towns or cities can impose a licensing requirement if the city council passes a law as as such. And many towns don't even bother, if the town is small enough. Check your local laws.
And with regard to the IRS, I can't believe they'd overstep local and state laws requiring a license. I'm not a tax lawyer, but even doing business as a U.S. corporation - the issue never came up.
What was required was a state resale tax I.D. number and a Federal Identification (F.E.I.N.). The F.E.I.N. is only for corporate entities. Smugmug Pro sales require that a W-9 be filled in and mailed to them for their records and reports of income to the I.R.S.
"You miss 100% of the shots you don't take" - Wayne Gretzky
Wouldn't every Pro Smugmuger need a business license then? The argument "I took these pictures for fun and later decided to sell them for money" probably wouldn't hold up.
But your not selling them, Smugmug is.
Does anyone have a specific case where they were forced to get a business license, or have their Smugmug site shut down? I really don't think that would hold up in court when you aren't legally, technically, or directly taking customer's money. Smugmug has stated many times that buyers are *their customers*, in the threads arguing against allowing us access to home address and phone number information.
Thanks David! You shed alot of light on the issue for me.
Probably had a license inspector which was not doing his/her job. Even in Rural Alabama I'm required to have a business license. Also if I shoot an event in a city I'm required to get a city business license.
Sure Smugmug says that the purchasers are their customers but I consider the purchaser my customer as well.
Also, if your planning on making any money on youth sport photography you may need to sell onsite.
Good Luck,
"Tis better keep your mouth shut and be thought of as an idiot than to open your mouth and remove all doubt"
Very possibly.
Yea I've considered that, but it requires me going in a direction which I am not willing to go right now.
No, our county just didn't require it in the 80's and 90's. The inspectors and other officials were pretty much all on the take (we're near Chicago!), so they would have gotten around to me in short order, I assure you. Every place is different. But if I was one address farther west, then I'd be obliged to apply and pay the yearly sum to the town I had my postal address in.
"You miss 100% of the shots you don't take" - Wayne Gretzky
> Correct! end of story!
> That depends. Find out if SM issues 1099s for ALL payments or only if payments exceed $600 in a calendar year. In either case your tax liability would be determined by other factors in your earnings history.
Moderator of: Location, Location, Location , Mind Your Own Business & Other Cool Shots
Another issue I've had is that people do not want to purchase online for fear of having the credit card information abused. These people usually give me the money and I process the order. I believe in this case they would be my customer not Smugmug's.
Maybe I need to add a profound statement like "End of Story"
Guess I'm hard headed - Just can't see how if I'm working for a profit by producing a product (photo's) advertising (even if only verbally) and making sales (whether in person or directing them to the web) and take in over the minimum threshold of reportable income, that this is not considered a business.
Now if I were taking photo's of a more general nature, architecture, landscape, etc.., which may be marketable to a larger cross section then maybe I can see were this may be defined differently. Only because the photographer is not involved in getting the majority of people to view the site. As where with the youth sports I am directly involved with the sales. In other words the people that purchase youth sports photo directly connect the sale with me.
I'll try to shut-up now. Some people say I can be over-bearing, but I don't believe it!
"Tis better keep your mouth shut and be thought of as an idiot than to open your mouth and remove all doubt"
OK, no argument from me!
I never said anything about his NOT being in business. Go back and read. He asked if he needed a business license if he sells exclusively through SM.
Regardless of the method of generating income, the statutes regarding business licenses are varied and almost always determined by local (county or municipal) law (in the U.S.)
Regardless of his location (in the U.S.) if he is earning income in the form of payments for his services from a retailer, in this case SM, he most probably doesn't need a local license. Doesn't mean he isn't "in business" or that he doesn't have to pay taxes on "reported" earnings.
If SM does not issue a 1099 for sales, the IRS has no info on the income.
Moderator of: Location, Location, Location , Mind Your Own Business & Other Cool Shots
Forget the license go shoot and sell... if someone asks you about it (someone of official status in LAW ENFORCEMENT), then ask questions and go get one.
Where I live you don't need to register as a business, though it costs like $10 for 5 years or something like that.
Glass: >Sigma 17-35mm,f2.8-4 DG >Tamron 28-75mm,f2.8 >Canon 100mm 2.8 Macro >Canon 70-200mm,f2.8L IS >Canon 200mm,f2.8L
Flash: >550EX >Sigma EF-500 DG Super >studio strobes
Sites: Jim Mitte Photography - Livingston Sports Photos - Brighton Football Photos
Okay the reference about the IRS was for information pertaining to BUSINESSES (setup, allowable deductions etc...) not in regard to a BUSINESS LICENSES.
Another reason I keep chiming in is if I'm abiding by the law (I know much debate on whether you need a BL or not but my County and Muni say I do) and getting my BL's ($125/year) it kind of pi$$e$ me off when someone enters my territory and shoots without the proper BL's (not to mention the intruder not charging sales tax). :thwak :soapbox
"Tis better keep your mouth shut and be thought of as an idiot than to open your mouth and remove all doubt"
wrong end of a fine which would exceed the cost of a BL. Better to find out
whether you do or don't from the local BBB
In most cases, ignorance of the law is not considered an excuse.
Something else to consider is the CC&R's of a homeowner's association.
Some restrict you from having any home based business :eek1 Yet another
reason not to get involved with HOAs...
City/County Zoning laws could have a similar effect.
"Tis better keep your mouth shut and be thought of as an idiot than to open your mouth and remove all doubt"
www.fitephotography.com
Canon 1D MkIIN, Canon 50D, Canon 300 f/2.8L, Canon 70-200 f/2.8L, Canon 24-70 f/2.8L, Canon 85 f/1.8, Canon 1.4 Extender,
Canon 580 & 420 Flash, Pocket Wizards,
Alien Bee 800, Other misc stuff
I included my State and Municipal BL's together.
I don't have a studio either. I have the State "Photography - Transient" license $18.34 and also have a Municipal License ( your supposed to have one for any city you shoot in if your making sales) $105.00 . I rounded off the rest to $125.00
Sorry for any confusion.
How do you handle your sales tax?
"Tis better keep your mouth shut and be thought of as an idiot than to open your mouth and remove all doubt"
As far as Income Tax, (as said before) you need to declare it as income - probably on a seperate form then your day-job wages. In the eyes of the law, you're an Independent Contractor, colluqially known as a '1099,' after the IRS form (that smugmug sends straight to the IRS for you) that is designed for independent contractors.
Sales tax is another issue entirely. Legally, you shouldn't have to pay your state & county government any sales tax, as the transaction (for purposes of the law) took place in California - on Smugmug's servers. States cannot legally tax (through sales tax) transactions that happened in other states. You are just the delivery man, in this case.
My Light came on!
I know I've not been in the main stream on charging sales tax in the past but I think I figured out a way to convert. Smugmug is a gallery, which is hosting a show with my work being featured (for an ego boost), just like any brick and mortar gallery. I'm not involved in the sales therefore I'm not involved the the sales tax.
Yes that's what ya'll said all along but I had to frame it for my mind (which can be tricky)
"Tis better keep your mouth shut and be thought of as an idiot than to open your mouth and remove all doubt"