Advice on Business Licence, preferably VA

msf · February 1, 2007

I was just wondering whats involved in getting a business license. Im in VA if that matters.

I want to offer portraits part time, and I figured having the company registered would be good.

Im not sure where to start, who to talk to, or how much it will cost.

Scott_Quier · February 2, 2007

Disclaimer: I'm not a lawyer. I'm not an accountant. I'm not qualified to offer either leglal, tax, or accounting advise. So, what I have to say is almost worth what you have paid to read it. That having been said....

Welcome to DGrin. I'm in Newport News. To get a business license you need to:

Determine if you are going to be a sole-proprietor, LLC, or INC
Determine what name you are going to use. If SP, you will be named in "official" documentation as John Doe, DBA Business Name
If LLC or INC, you need to apply to the state for incorporation. LLC is easy (one sheet of paper) and $50 (maybe it was $100 - don't remember). You will need a Tax Id Number to file your application. Get that from the Fed IRS.
Now, go to your city/county and let them know that you are starting up. NN charged me $50 tax based on estimated revenues. Then I had to go to city Codes Compliance office to schedule an inspection to "make sure my home-office met code" and that I wasn't working out of my unfinished garage. That cost me another $50.
After that, I'm legal. I also just received a request to itemize my business assets (equipment) for Business Property Tax assessment.

Now I'm waiting for the next tax notice - don't know what it will be called, but I'm sure it'll be a doozy!

Good luck on your venture.

bsvirginian · February 2, 2007

Where in Va.? BS

msf wrote:

I was just wondering whats involved in getting a business license. Im in VA if that matters.

I want to offer portraits part time, and I figured having the company registered would be good.

Im not sure where to start, who to talk to, or how much it will cost.

Scotty_R · February 2, 2007

Scott has given you very good advice, but remember, Scott is a full time professional photographer. Before you align yourself with the IRS and the Commonwealth of Virginia Department of Taxation, your city/county Commissioner of the Revenue, the Commonwealth of Virginia State Corporation Commission and a whole bunch of other agencies, I would suggest you decide just how much revenue you're going to generate taking portraits part time. If you generate $10, 15, maybe $20K in revenue a year, then you can always report the income on your federal and state tax returns under your own social security number. Not necessary to go the whole banana with incorporation, reporting monthly/quarterly to the various tax authorities, etc.

As Scott suggests, talk to a CPA or a tax lawyer for absolute advice, but whatever you do, open a separate checking account to monitor your income and expenses for the photography work. That way, you'll have an audit/paper trail of everything associated with the business. Later on when you're shooting more and more, then you can think about incorporating, LLC, etc.

Good luck.

Scott_Quier · February 2, 2007

Scotty_R wrote:

Scott has given you very good advice, but remember, Scott is a full time professional photographer.

Thanks for the compliment and I'm not full time - yet. But, I'm trying.

Scotty_R wrote:

I would suggest you decide just how much revenue you're going to generate taking portraits part time. If you generate $10, 15, maybe $20K in revenue a year, then you can always report the income on your federal and state tax returns under your own social security number. Not necessary to go the whole banana with incorporation, reporting monthly/quarterly to the various tax authorities, etc.

Good luck.

This is correct. The expected income level will be a prime driver in deciding if you are going to go SP, LLC, or INC. If you do the SP route, your income is reported on your personal taxes, just like any other income source. You also report expenses on your personal taxes (but not in excess of your earnings). Works well, this is the route my wife has taken with her business.

Another driver in deciding your SP, LLC, INC decision is how much you need to protect your personal assets (house, car, etc) from litigation. Litigation can come from just about any direction - a client falls down in their house while you have your gear set up in the other corner. Could happen. LLC and INC don't provide as much protection as they used to, but what protect you do get is better than SP. SP offers no such protection.

As Scott_R says, invest a couple of $$ consulting with someone who knows what they are talking about. I met with the family accountant (does our personal taxes and my wife's business taxes, etc) and got what, so far, appears to be great advice. It cost me about $75 for a little over an hour of her time. Just the process of starting a business relationship is worth that little bit of change.

GeorgeT · February 2, 2007

This is a good question. At what point does a hobby income become a business and need for local license, DBA? So far, I treat it as a hobby income. When do I have to say it is a business? I have no home studio. Everything on location.
GT

msf · February 2, 2007

Scott_Quier wrote:

Disclaimer: I'm not a lawyer. I'm not an accountant. I'm not qualified to offer either leglal, tax, or accounting advise. So, what I have to say is almost worth what you have paid to read it. That having been said....

Welcome to DGrin. I'm in Newport News. To get a business license you need to:
Determine if you are going to be a sole-proprietor, LLC, or INC

Determine what name you are going to use. If SP, you will be named in "official" documentation as John Doe, DBA Business Name

If LLC or INC, you need to apply to the state for incorporation. LLC is easy (one sheet of paper) and $50 (maybe it was $100 - don't remember). You will need a Tax Id Number to file your application. Get that from the Fed IRS.

Now, go to your city/county and let them know that you are starting up. NN charged me $50 tax based on estimated revenues. Then I had to go to city Codes Compliance office to schedule an inspection to "make sure my home-office met code" and that I wasn't working out of my unfinished garage. That cost me another $50.

After that, I'm legal. I also just received a request to itemize my business assets (equipment) for Business Property Tax assessment.

Now I'm waiting for the next tax notice - don't know what it will be called, but I'm sure it'll be a doozy!

Good luck on your venture.

Thanks for the replies everyone. I would have responded sooner, but I didnt realize my settings were not set to instantly email me.

Were just starting out on our own. We have experience taking portraits and doing weddings, but that was for someone else. So right now the income isnt very high, so im thinking of going the Sole Proprieter route.

Is an office required? We plan to go out on location since we dont have a studio yet, or room for one. Plus theres lots of beautiful virginia scenery that would make for nice backgrounds.

I guess we'll head over to the county office to see what they charge and is required.

If you go the SP route, do you have to charge taxes and sign up for all that stuff? Assuming you make less than $10k *starting out*.

Thanks for the advice.

Scott_Quier · February 3, 2007

GeorgeT wrote:

This is a good question. At what point does a hobby income become a business and need for local license, DBA? So far, I treat it as a hobby income. When do I have to say it is a business? I have no home studio. Everything on location.
GT

Having just gone through this entire thought process myself, here's what I discovered:

DBA - Doing Business As - this is a sole propriatorship
There is probably some point where the volume of business you do would qualify you for or force you to declare youself as a business. If there is, I'm almost sure that it will be different in different locals. Consult your tax professional! I'm not qualified.
My tax professional told me that, if I did declare myself as a business (this was before I decided to do so), I would have to, for Fed IRS tax reasons, at least break even inside of three years. If I failed to do so, Fed IRS would re-qualify my business as a hobby and all my "business expenses" that were exemtped from income taxation would be re-categorized as taxable income and I would owe back taxes on that income.

Advice on Business Licence, preferably VA

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