Do I Need A Business License For This?

I'm a photography hobbiest looking to start photography as a small side income (& file what I'd make on a form C

come tax season). I'd be a on location photographer shooting weddings and such. I would not do any shoots in my

home and do not have a studio. I'd like to advertise myself, make a website with a portfolio and contact info, and

maybe hand out some business cards. I am needing to know if I need a business license for this? I don't want to

have to go through the trouble of getting one and dealing with everything that comes with it just for a few gigs here

and there. And I just have to ask this one too. If I can advertise myself without a license, can I use a name that I pick

like "Picture Perfect Photography" or do I have to use just my name since I don't have a license?

Yes you need one. When you go to register the business they do a search to see if the name you want is taken. If so you have to pick another one. It is an easy procedure.

As far as I know, you don't need a business license. Don't know if this varies from state to state or not, but it's not something I ever needed to do. You can use whatever name you want, as long as it's not in use already. I went to the County Clerk's office and registered my chosen business name, which I understand is highly recommended (so that no one else can use the same name for their business).

You don't need one unless you expect to earn an significant income that is independent of any other job you're currently

doing where the income is reported and all appropriate fees and taxes paid. That's the official side of the issue, but can you

work without one and even earning a little money? Yes, so long as you don't have legal problems, don't have liability

issues, don't get customers complaints about contracts, service or costs, and don't get audited. There's a lot of advantages

to having a business license (not pay taxes on purchases for one), but it does take time (state and local city/country

licenses/permits, etc.) and money (licenses, reporting and paying taxes, etc.). If you do get one, you'll find most state's

have Department of License Websites which provide all the information, material and forms. Good luck.

Section 40-12-12 - License to designate place of business.

Every license granting authority to engage in or exercise any business, employment, or profession, unless expressly authorized elsewhere or otherwise, shall designate the place of such business, employment, or profession at some specified house or other definite place within the county of the probate judge granting it. Engaging in or exercising any such license, business, employment, or profession elsewhere than at such house or definite place, unless expressly authorized elsewhere or otherwise by law, shall be held to be without license. A license which does not specify such house or definite place where business, employment, or profession is limited thereto by law shall be void.

 

Found this in my department of revenue website. So this means I don't have to have a business license for what I do, but can I still advertise myself?

Lacey -

 

You may or may not need a license... but you will almost certainly need to register with your state and obtain a state tax id.

 

Check the attorney general's or secretary of state's website for you state.

 

For example: In Minnesota - I don't need a license to be a photographer...no fee, no test.. But I did have to register my business, receive a tax id, collect and pay sales / use tax. It cost me $25.00 to the state, plus another $30.00 to have an official notice printed in a generally accepted forum (newspaper).

 

Also, keep in mind that the IRS likes you to show a profit within 3 years... otherwise they view whatever you're doing as a hobby.

 

If you're still in doubt, call an attorney or cpa in your state / area. Most will give you a free initial consultation.

 

Dave

Thanks! But can I advertise without one once I get a Tax ID?

Dave's answer was the most accurate:

 

You may or may not need a license.

 

Check the attorney general's or secretary of state's website for you state.

 

Call an attorney or cpa in your state / area. Most will give you a free initial consultation.

 

--

 

The answer to your question depends on where you live and will conduct business. I'm a CPA with twenty-five years experience dealing with individual and small business tax clients. Dave's answer is what I would have told you.

So "registering a business" is different from having to get a license then. Right?

And that's the same basically as having a regular business, just without the license and place of work. Right?

It honestly all depends on where you live. Not only does the state matter, but also your particular city. For example, for me... I decided to give my business a name that didn't include my actual name (the Suitcase Studio), so I had to file with my county for a DBA (doing business as...), as well as publish that name in a local paper (this cost me about $40 total). I am doing similar business as you... working on my computer at home (a home business), but not using it as a studio (no clients will come to me here). In the last city I lived in, even a home business like mine had to register for a business license (using the home address as the business address). But in the city I currently live in, they actually do not hand out business licenses, and just give a letter explaining this, to show people. (weird, but true.)

 

However, if you are selling items/offering a service, you also need to be collecting sales tax, which means that you will definitely need a sales permit. things get tricky, though, when you decide to call it a "hobby" and not a "business." This number only applies to how things were a few years ago... the IRS was okay with calling something a "hobby" as long as you didn't make more than $400 per year. If you made over that amount, you had to go through the steps of opening an actual business. If you didn't do this, it was a red flag on your taxes, and opened you up to getting audited. I am not giving definite numbers here... just opening your eyes to something to be aware of.

 

As far as a tax id number... that is debatable. If you are the only person involved, you can set it up as a "sole proprietor" and simply do as you had planned and report it on your Schedule C at tax time. I have heard that the government actually prefers it done this way...rather than bother with a different tax id number, you simply use your personal social security number instead.

 

As far as a website, advertising and business cards go... go for it, but read the above. the best advice I can give you is to check with your local requirements (city, county, state) and then go from there.

if, for example, you are in California....and conduct business with no sales tax permit: a very poor idea. Once the tax office catches up with you, you will have "earned" back tax penalties and interest on what they think you should have paid them.

 

 

 

If is only fair. If a studio owner has to collect and remit sales taxes, so should you. If I owned a studio in your town and "discovered" you were doing right well in the photography business, chances are you would earn a "visit" by the tax office folks.

Why not save your sleep? Get a license and a Tax ID. I won't cost much, and far less than an hour minimum (their rules) with a lawyer. Believe me from experience some folks, such as galleries, will ask for both.

 

So I repeat: Save the sleep! What are you afraid of, any way?

The more recent responses are correct...

 

This is a highly localized question that simply can't be answered by folks on the Internet.

 

We don't know where you live Lacey, and even if we did and thought we knew the answer, you'd be ill advised to

take our word for it. It cost a friend of mine $600,000 when he used the wrong tax methodology for his studio.

 

So, spend a little money consulting with a local CPA and/or attorney to set up your business properly. Look for

professionals experienced in small businesses in your specific area and follow their recommendations.

 

Your local SBA, government offices, Chamber of Commerce and any local business incubators might be very helpful,

too, but won't entirely substitute for proper advice from the pros.

 

Please ignore all the "yes you need one" and "no you don't need one" responses. Those answers may be 100% correct

in that person's location. But that has absolutely no bearing on your particular location.

Lacey -- although I know you asked more from the perspective of "business license" another issue you need to think about, particularly

if you're thinking you'll be shooting weddings, is insurance.

 

Many catering halls and other locations require that vendors working on site provide evidence of liability insurance, so that the site

knows you'll be covered in the event that someone is injured or the property is damaged. Also, your homeowners insurance may not

cover loss or damage to your equipment if you use the equipment -- ever -- to earn money. Our USAA HO policy has this exclusion.

 

In addition, you may want to consider forming an LLC, which could provide some protection of your personal assets in the event that you

cause (or are even accused of causing) injury or damage in the course of your business. For federal purposes, you can report income

from a single member LLC on a form C; no need to file a separate return. Check with a local attorney and/or CPA about this.

 

Good luck!

Hi Lacy,

 

I recently obtained my LLC about 2 years ago and was a free lance photographer before that. I filed my taxes with my

social and had no problem. But I did have to obtain a city license for about $35 with my business name. Now some

cities don't require the license at all where others do and you have to register. It is easy and painless and you don't need

an attorney. Just call your local town hall tell them what you are doing, "I am wondering if I needed a city license, I am a

free lance photographer and would like to know what I need to do to be legit. I am filing my taxes with my own social."

They will tell you everything you need to do or where you would need to go to get the right information.

 

As far as your business name... you want to make sure that your name isn't taken. Google your business name and see

if the domain is free. Later if you want a business website you will need it to be free for you to purchase other wise you

will find yourself having to come up with a new name. The city hall people will also check to see if your business name

can be in use for you on a local level.

 

The reason why I ended up getting my LLC. is for protection. You can be sued. Meaning all of your belongings can now

be someone else's. An LLC. limits the liability and only your company can be sued not you personally. But if you are not

wanting to get one but want to take money for photos as a professional does you are really opening up a door into your

personal life that can lead to craziness. Make sure no matter what you do that you have amazing contracts that state

what people are getting how they will be receiving the products and how you take payments. Plus you may want to state

what kind of a refund you do or if you do any you need to say in a binding contract that you don't do refunds.

 

I really hope this helps. Feel free to check out some of my work at www.imagineitkc.com and ask me any other

questions you might have. I have just go through all of this, in fact I am still paying my attorney. :) Whom I do love.

There are far too many jurisdictional variables here for any of us to tell you yes or no that you need a business license, tax license, etc. We're photographers, not lawyers. Check with finance or revenue department of your city/town/village - both the one you live in and those surrounding it - anywhere where you might be engaged in a "business activity." Then check with your county, as well as possibly the next one over for the same reason as above. Then check with your State. Each and everyone of those could well require any combination of business/tax/sales license, permit/whathaveyou. Or they might not. But in any case, you really wont know for sure until you check with them, not us.

 

If you're doing what you're doing in exchange for monies or barter recieved - you're in business.

 

Jill

I think that you just need a tax id number and a to register your name. Its a really simple process. I did it a few years ago for my business...Allstarz Design and still to this day i havent been asked by any person/tournament or organization for a license. I was asked once for a tax id # though. I specialize in youth sports photography, check out my website and let me know what you think. www.allstarzdesign.com

Lacey,

 

Do you want to be a professional photographer?

 

If so then you need to do a lot more study before you start trying to get actual business, because getting a business

license is nothing, it's a simple form and a couple of hundred dollars and the least of your worries and costs in trying to

run a real photography business.

 

If you just want to be a hobbyist then take pictures of flowers and landscapes and sell them at the craft show, take all

cash payments, and just have fun.

JM, "In addition, you may want to consider forming an LLC, which could provide some protection of your personal assets in the event that you cause (or are even accused of causing) injury or damage in the course of your business."

 

Really? What protection is that ?