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Do I Need A Business License For This?

Lacey Pitts , Nov 13, 2008; 02:20 p.m.

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?

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Bruce Cahn , Nov 13, 2008; 03:17 p.m.

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.

Daryl Ann Anderson , Nov 13, 2008; 03:23 p.m.

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).

Scott M. Knowles , Nov 13, 2008; 03:42 p.m.

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.

Lacey Pitts , Nov 13, 2008; 04:43 p.m.

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?

David Haas , Nov 13, 2008; 05:08 p.m.

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

Lacey Pitts , Nov 13, 2008; 05:22 p.m.

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

Joel Berry , Nov 13, 2008; 05:23 p.m.

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.

Lacey Pitts , Nov 13, 2008; 05:29 p.m.

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?

Michelle Carrillo , Nov 13, 2008; 06:41 p.m.

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.


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