Tiggerbus on wed 16 apr 97
Should potters go out and get a business license...I am unsure about all
of this before I go out and get the tax ID number and such. Please send
me some information on this, I have always sold work without one.
Hope I am not doing anything TOO wrong!!
Thanks,
amer
Amy Gossett
tiggerbus@aol.com
Capuccino and Clayart mornings.........
++++++++++++++++++++++++++++++++++++++++++++++++
"Reality is merely a crutch for those with a broken imagination..."
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Jenni Lexau on thu 17 apr 97
On Wed, 16 Apr 1997, Tiggerbus wrote:
> ----------------------------Original message----------------------------
> Should potters go out and get a business license...I am unsure about all
> of this before I go out and get the tax ID number and such.
Er, doesn't this (if a license is needed) depend on the state from which
you operate your business? And the tax ID always confused me, too. It
seems like you *would* need a tax ID to sell through craft fairs (where
YOU are collecting sales tax) and you *wouldn't* need one to sell through
galleries (because the sales tax would be collected through THEIR tax ID
number).
I've read several books on "starting your own craft business", etc...
but none of them have convered the tax ID thing, which is why I'm guessing
that it varies by state. In that case I'd guess the best thing to do is to
contact your local Small Business Administration (ugh, I know, but
supposedly they know the local laws...)
freewill
"How short the life, how long the craft to learn."
Kenneth D Westfall on thu 17 apr 97
Amy,
Regarding business licenses...it depends on the laws of the state where
you reside. Most states require that you obtain a license to do business
within their state, and sometimes it is a different license if you do
business in a state where you are not a resident. Here in WV, you must
apply for a license and then renew it annually. If you do get a license,
then you will probably be responsible for collecting and remitting sales
tax to the state. If you already remit, then a license should simplify
the process. If you don't collect and remit tax, then you have to decide
if you want to break the laws of your state. I don't know of any state
which doesn't require sales tax collection on all 'in state' sales. Many
states don't have a fee for the license for the first time. Then, if
your sales in the business are less than a predetermined (by the state)
amount, then renewal is at no charge. As to the type of number, some
states use your SS# with a few digits added to the end. Others go by the
Federal ID# system. You only have to get a Fed. ID # if you are a
corporation, I think. As a sole proprietor, it shouldn't be required.
If you have employees and conduct a regular payroll, then you should
already have a Fed ID#. I suspect that this is not the case, from the
message you posted.
As to whether you're doing something Really Wrong?..... only if your
state requires collection and remittance of sales tax and you haven't
done that. The business license is an avenue for collection of taxes.
You could, certainly, be fined (or worse) for failure to collect and
remit sales tax. If your sales are under $4000.00 annually, then it's
probably not a 'go to jail' offense. But if you're making a decent
living without dealing with the sales tax issue, I would change that
"immediately"!!! Also, some states have peddlar laws which you could be
violating by not having a business license. When we travel to other
states, I always call the county courthouse for the county where we'll be
selling and determine what licenses/ permits we need to get BEFORE we
arrive to sell. It saves a lot of hassles later. These usually do cost,
but usually it is a token fee.
It's not alot of fun to do all this bookkeeping for sales taxes, but
there are worse things to deal with!
This is true for any artist, too, not just potters. I'd suggest that you
contact a friend who is in another type of business [ you know, a
'regular' one! ha ha!8-) ] or an accountant, or just call the state
dept of revenues and ask some question. You don't have to tell who you
are.
Good luck, and happy potting!
Tracey Westfall
Pine Hill Pottery
potter-ken@juno.com
Ric Swenson on thu 17 apr 97
-----reply-----------
Another source of info on what is needed to "go into business" might be
your local Chamber of Commerce. The phone book also contains the number
for your state 's Tax Department. They can answer your questions about
your state's tax collections...registration you might need and if your
State requires businesses to "register" with the Secretary of State...(even
if you are not "incorporated.")
Most states want to know who is doing business within their borders. They
want to make sure they get their share of sales...if there is a sales
tax...and also to make sure they can identify the business in case someone
has a question about your product.
Even Non -profits register in most States...I know they do in Vermont .
One reason is to make sure that there is only one oganization in the state
know by a certain name. We asked to be called ARTS ALIVE when we formed
our local arts council in 1988..the State told us we couldn't use "that"
name because Burlington already was using it. So we ended up with BENN
ARTS...which nobody liked as much.
Get the business license...or register with the state...whatever it takes.
If you are a professional and selling on a regular basis....you could get
in a real hassle with the authorities if you just "claim ignorance". AND
Connections with your local Chamber can be helpful in the area of sales and
exposure to a wider market....
I think it cost only $30 a year for a business license in Alaska, when I
had my studio there. It was well worth the small fee.
Happy potting.
Ric
>----------------------------Original message----------------------------
>
>
>On Wed, 16 Apr 1997, Tiggerbus wrote:
>
>> ----------------------------Original message----------------------------
>> Should potters go out and get a business license...I am unsure about all
>> of this before I go out and get the tax ID number and such.
>
>Er, doesn't this (if a license is needed) depend on the state from which
>you operate your business? And the tax ID always confused me, too. It
>seems like you *would* need a tax ID to sell through craft fairs (where
>YOU are collecting sales tax) and you *wouldn't* need one to sell through
>galleries (because the sales tax would be collected through THEIR tax ID
>number).
>I've read several books on "starting your own craft business", etc...
>but none of them have convered the tax ID thing, which is why I'm guessing
>that it varies by state. In that case I'd guess the best thing to do is to
>contact your local Small Business Administration (ugh, I know, but
>supposedly they know the local laws...)
>
>freewill
>
>
>"How short the life, how long the craft to learn."
Rick Sherman on thu 17 apr 97
hello again Amy: Yes, you should obtain a business license if you
plan to sell you work, wholesale or retail. You obtain this from your
state, not the Feds. Many show promoters will ask you to provide the
number of your business [resale] license. Don't be confused between a
special business license required by some cities and the resale
license required by your state. Check with a friend who sells retail
or wholesale in your state. Wholesale accounts [galleries and shops]
may be required to report the resale numbers of their artists on their
tax returns. RS
Olivia T Cavy on fri 18 apr 97
Tracey-
Your message was well stated. I heartily agree with your emphasis on
complying with the legalities. I also answered this one but I don't
think it made it into today's postings. I hope you'll see it tomorrow.
Bonnie Hellman, CPA in Pittsburgh, PA
On Thu, 17 Apr 1997 12:26:33 EDT Kenneth D Westfall
writes:
>----------------------------Original
>message----------------------------
>Amy, Regarding business licenses...it depends on the laws of the state
>where you reside. Most states require that you obtain a license to do
>business within their state, and sometimes it is a different license
>if you do business in a state where you are not a resident. Here in
>WV, you must apply for a license and then renew it annually. If you
>do get a license, then you will probably be responsible for collecting
>and remitting sales tax to the state. If you already remit, then a
>license should simplify the process. If you don't collect and remit
>tax, then you have to decide if you want to break the laws of your
>state. I don't know of any state which doesn't require sales tax
>collection on all 'in state' sales. Many states don't have a fee for
>the license for the first time. Then, if your sales in the business
>are less than a predetermined (by the state) amount, then renewal is
>at no charge. As to the type of number, some states use your SS# with
>a few digits added to the end. Others go by the Federal ID# system.
>You only have to get a Fed. ID # if you are a corporation, I think.
>As a sole proprietor, it shouldn't be required. If you have employees
>and conduct a regular payroll, then you should already have a Fed ID#.
> I suspect that this is not the case, from the
>message you posted. As to whether you're doing something Really
>Wrong?..... only if your state requires collection and remittance of
>sales tax and you haven't done that. The business license is an
>avenue for collection of taxes. You could, certainly, be fined (or
>worse) for failure to collect and remit sales tax. If your sales are
>under $4000.00 annually, then it's probably not a 'go to jail'
>offense. But if you're making a decent living without dealing with
>the sales tax issue, I would change that "immediately"!!! Also, some
>states have peddlar laws which you could be violating by not having a
>business license. When we travel to other states, I always call the
>county courthouse for the county where we'll be selling and determine
>what licenses/ permits we need to get BEFORE we arrive to sell. It
>saves a lot of hassles later. These usually do cost,
>but usually it is a token fee. It's not alot of fun to do all this
>bookkeeping for sales taxes, but
>there are worse things to deal with! This is true for any artist, too,
>not just potters. I'd suggest that you contact a friend who is in
>another type of business [ you know, a 'regular' one! ha ha!8-) ] or
>an accountant, or just call the state dept of revenues and ask some
>question. You don't have to tell who you
>are.
>Good luck, and happy potting!
>Tracey Westfall
>Pine Hill Pottery
>potter-ken@juno.com
J./B. Moore on fri 18 apr 97
At 08:08 AM 4/16/97 EDT, you wrote:
>----------------------------Original message----------------------------
>Should potters go out and get a business license...I am unsure about all
>of this before I go out and get the tax ID number and such. Please send
>me some information on this, I have always sold work without one.
Don't admit this publicly! You may get in trouble. Art fairs generally
require you to give them your #, or purchase a temporary certificate if you
don't usually do business in their state. If you file taxes as a business,
you need to have a business certificate.
Call your state's Department of Revenue--they generally call it a Retail
Merchant's Certificate or some such. It will cost you about $25, plus about
2 hours of your time quarterly to fill out the paperwork so you can return
sales tax to the state. The good thing is that if you have one, you don't
have to pay sales tax on your materials and you may even get a discount from
your suppliers, depending on who they are.
Julia Moore
Director of Exhibitions and Artist Services
Indianapolis Art Center
Jeanne Ormsby on fri 18 apr 97
There is a very good set of publications by Oasis Press in Oregon, called
"Doing Business in...." as in "Doing Business in Maryland." They have a
book for each state. Each book covers all the various federal taxes and
requirements, and also includes a section specific to the state. I have
seen the books in Price Club, and you can also order directly from the
company. I believe they are based in Portland and also have an 800 number
which you should be able to get from the 800 information. This will not
address the issue of local business licenses (towns, counties, etc), but
will get you headed in the right direction. Usually city hall can tell you
about local requirements.
Best wishes,
Jeanne (also a CPA)
June Perry on sat 19 apr 97
Just a quick blurb on your note. Oregon does not have a sales tax; but we do
have a state income tax.:-(
Regards,
June
Jeanne Ormsby on sat 19 apr 97
Actually Sales and Use Tax Permits are different from business licenses and
also are different from Federal ID Numbers. Business licenses relate to
registering with local authorities as a business (usually with a fee) and
the requirements vary from place to place. If you do not have customers
coming to your studio, for instance, some places would not consider that a
business establishment. Sales and Use Tax Permits are granted by states and
essentially you are registering to collect sales tax from your retail
customers and and then send these dollars to the state. Once you establish
that you are a seller of goods, you can also avoid paying sales tax on
materials that go in to what you sell, by presenting your sales tax number
to your supplier. Some states, such as Maryland, limit this to largish
purchases to avoid abuse. (We can however, recoup sales tax by showing it
as a credit on the sales tax we report). The Federal Employer ID Number
(FEIN)is acquired by filing the form SS4, which is required for all
partnerships, corporations, and other non-individuals, plus it is required
for sole proprietors who have payroll and must pay payroll taxes.
If you are sometimes frustrated by all of this, this is only the tip of the
iceberg--I have worked for both restaurant and trucking companies, and there
is much more you could have to do than worry about business licenses,
FEIN's, and sales tax. Still, it is important that you set up a good
accounting system so that you collect the information necessary to report
your taxes correctly. The tax authorities really do not have much empathy
on the subject. If it is confusing to you, consult a local CPA (plug, plug).
Jeanne
At 06:48 AM 4/18/97 EDT, you wrote:
>----------------------------Original message----------------------------
>At 08:08 AM 4/16/97 EDT, you wrote:
>>----------------------------Original message----------------------------
>>Should potters go out and get a business license...I am unsure about all
>>of this before I go out and get the tax ID number and such. Please send
>>me some information on this, I have always sold work without one.
>
>
>Don't admit this publicly! You may get in trouble. Art fairs generally
>require you to give them your #, or purchase a temporary certificate if you
>don't usually do business in their state. If you file taxes as a business,
>you need to have a business certificate.
>
>Call your state's Department of Revenue--they generally call it a Retail
>Merchant's Certificate or some such. It will cost you about $25, plus about
>2 hours of your time quarterly to fill out the paperwork so you can return
>sales tax to the state. The good thing is that if you have one, you don't
>have to pay sales tax on your materials and you may even get a discount from
>your suppliers, depending on who they are.
>
>Julia Moore
>Director of Exhibitions and Artist Services
>Indianapolis Art Center
>
>
Stern HQ on sun 20 apr 97
I believe the secretary of state's office in each state can provide free
all the information anyone needs about doing business in a state. That
same office, or the state department of revenue can provide tax
information and tax licenses. There is a federal publication on small
businesses that gives information on federal taxes etc. These are all
free. Why spend money on a book unless you want the leg work done for
you? Jeni in Denver
On Fri, 18 Apr 1997, Jeanne Ormsby wrote:
> ----------------------------Original message----------------------------
> There is a very good set of publications by Oasis Press in Oregon, called
> "Doing Business in...." as in "Doing Business in Maryland." They have a
> book for each state. Each book covers all the various federal taxes and
> requirements, and also includes a section specific to the state. I have
> seen the books in Price Club, and you can also order directly from the
> company. I believe they are based in Portland and also have an 800 number
> which you should be able to get from the 800 information. This will not
> address the issue of local business licenses (towns, counties, etc), but
> will get you headed in the right direction. Usually city hall can tell you
> about local requirements.
>
> Best wishes,
>
> Jeanne (also a CPA)
>
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