Quick question about licenses for all you businessmen

[Metalhead]

Normally I wouldn't care about this since I know you can be a photographer without a business license, but lately family and friends have been asking the terribly annoying "don't have to get some sort of license to sell photographs?"

I'm just wondering--at what point does it become necessary to get one? Only if you have a storefront? (physical studio)...if you make X number of dollars in a year?...or never? I'm just kind of curious.

You will need a sales tax license and a DBA at minimum.

[STP Images]

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[toverman]

There is already a ton of information on this forum about this, too. See if a search turns anything up. I've seen your same question asked several times.

To sell photos, you'll need a state sales tax permit (and you'll also have to figure out how you will report/pay the sales tax to the state).

[CobyPhoto]

Originally Posted by Metalhead

Normally I wouldn't care about this since I know you can be a photographer without a business license, but lately family and friends have been asking the terribly annoying "don't have to get some sort of license to sell photographs?"

I'm just wondering--at what point does it become necessary to get one? Only if you have a storefront? (physical studio)...if you make X number of dollars in a year?...or never? I'm just kind of curious.

The moment you take money for your product, you just became "in business" as far as the State of Texas is concerned. You MUST collect and remit sales tax on those 'sales.'

If you don't want the responsibility or obligation of doing what the law requires of you, if you want to sell photos...don't do it. I can give you several references that will tell you it ain't pretty when they catch up to you.

CJ

[CobyPhoto]

Originally Posted by toverman

(and you'll also have to figure out how you will report/pay the sales tax to the state).

Don't worry, The State of Texas will tell you how and when you are going to pay State Sales tax, based on the information you supply them, when appling for the certificate.

When answering questions about projected income, realize that it will really benefit you, the tax certificate holder, to answer VERY honestly. That is how they determine when and how you pay your sales tax.

Even if you inflate it, or underestimate it, the will adjust it the first reporting period that it crosses a threshold.

CJ

[Metalhead]

huh...thanks. Obviously, I would've researched this to save myself when I started doing some business, but I thought I'd just put up a quick question.

I guess I had better tell my grandma's friend that she needs a license because apparently she's running a photo biz w/out one

[CobyPhoto]

Originally Posted by Metalhead

huh...thanks. Obviously, I would've researched this to save myself when I started doing some business, but I thought I'd just put up a quick question.

I guess I had better tell my grandma's friend that she needs a license because apparently she's running a photo biz w/out one

Tis true. They are pretty agressive about people not collecting sales tax. Better to not give them reason to bother you.

CJ

[toverman]

Same vein but a little off-topic ...

Many in-home childcare providers are also unlicensed; anyone keeping children other than their own for money in the state of Texas has to register. Not doing it is a state-jail felony, but there are so many out there just doing it.

So don't let just anyone babysit your camera, either, I guess.

[figment]

::bad info::

[toverman]

Originally Posted by figment

The ONLY thing you HAVE to have is an 'assumed name/fictitious name/DBA' certificate, and just pay the taxes that you collect from clients under your personal social security number (eg, sole proprietor). Voila, business.

You can even open a business banking account, and all you need is that DBA cert.

You dont NEED a tax id, unless you plan on writing stuff off, or not paying tax for consumables, or hiring an employees, or limiting your liability from your personal self (ie, your social).

If you are doing this BY yourself, then all you need is that $9-20 form filled out at the court house, and bam, you're in business.

Some of you need to educate yourselves, not all of us are huge corporations. :)

OK, here we go again.

I think you need to check your information. If you sell a physical product in the state of Texas, you DO need a sales tax ID. Getting one is free ("bam") and necessary. The state won't care whether you're a huge corporation when they find out you've been selling prints or CDs/DVDs of images or posters and want a check (on a regular basis). Those who sell prints from an online service that actually does the selling, and is out of state, is another matter and has been discussed here.

The sales tax ID has nothing to do with writing stuff off; that's income tax.

A DBA protects your name in the county where you file, and it's recommended.

[figment]

::bad info::

[Paulo]

Originally Posted by Metalhead

Normally I wouldn't care about this since I know you can be a photographer without a business license, but lately family and friends have been asking the terribly annoying "don't have to get some sort of license to sell photographs?"

I'm just wondering--at what point does it become necessary to get one? Only if you have a storefront? (physical studio)...if you make X number of dollars in a year?...or never? I'm just kind of curious.

Hi Michael,
Since you alone would be held accountable for whatever decision you make on this. You may also consider contacting (emailing) the Texas Comptrollers office directly with your question. It doesn't cost anyting and they're pretty helpful. I asked them the same thing when I was first starting out and was told the sales tax permit is required in order to collect taxes. And collection of local/state sales tax was required whether you're selling one photo a year or 1000. DBA is required if you are operating under a name other than you're actual name and you wish to open a business account at a bank. The sales tax permit is free and can be done online.

Here's the link to the State Comptrollers office regard sales tax permit:
http://www.window.state.tx.us/taxinf..._business.html
http://www.window.state.tx.us/taxinf...s/tx94_105.pdf

[bondarnes]

Originally Posted by figment

Like I said, you DONT NEED a tax ID if you are sole prop, you can use your personal social. Though it wont keep the business seperate from your personal assets, you DO NOT need a tax id, though that is the better route to go. But all this shenanigans about not being legal just because you dont have a tax id is bs. And if you are doing business as YOU NAME PHOTOGRAPHY you dont even need to fill out a DBA. (except to keep others from using it)

This is of course assuming you pay the taxes you receive from your orders with your personal social, and arent in a partnership, and are just YOU.

Though, this is what my dad told me. CPA, and retired military finance and accounting officer, and owner of multiple business.

Jon, your information seems to be inaccurate and I hope you are not following your own advice. A Federal Tax ID number and a Texas Sales and Use Tax ID are two totally different items.

You are correct that you will only need a Federal Tax ID if your business form is something other than a sole proprietorship, and/or you have employees, and/or you do business for certain companies.

However, if you take money for photography work, the State of Texas REQUIRES you to collect and remit the proper sales tax. Paying sales tax at your lab does not exempt you. Delivering images on a CD or via the internet does not exempt you. The law is very clear on this and if your father told you otherwise and he is a CPA then shame on him for giving you incorrect information. This is no small thing and the state does vigorously enforce this.

It is a simple process to file for a sales tax permit and to collect and remit the proper taxes to the state comptrollers office. Coby is quite correct about them going after you for back taxes. I have a friend who shot sports teams for almost six years and paid the sales taxes at his lab. When the comptroller came calling they gave him a bill for over $8,000.00 in back sales taxes.

[CobyPhoto]

Originally Posted by figment

The ONLY thing you HAVE to have is an 'assumed name/fictitious name/DBA' certificate, and just pay the taxes that you collect from clients under your personal social security number (eg, sole proprietor). Voila, business.

You can even open a business banking account, and all you need is that DBA cert.

You dont NEED a tax id, unless you plan on writing stuff off, or not paying tax for consumables, or hiring an employees, or limiting your liability from your personal self (ie, your social).

If you are doing this BY yourself, then all you need is that $9-20 form filled out at the court house, and bam, you're in business.

Some of you need to educate yourselves, not all of us are huge corporations. :)

Please DO NOT listen to this statement. IF you are taking payment for your services and in business, no matter is you are a sole proprietor, partnership, corporation, etc. you MUST HAVE a Texas Sales Tax certificate and you MUST collect sales tax and report it under this number.

FURTHER, if you want to abide by the law and regulations (read: I said IF, because many DO NOT) you must check your HOA/POA deed restrictions, file Business Personal Property Tax Rendition and if you have any employee, you must have a FEIN and in Texas a TWC account Number.

As far as how they enforce these issues, I will say, you definitely do not want to be on the wrong end of a battle concnerning ANY type of taxes...City, County, State or Federal. Been involved in many as a consultant helping people resolve these issues and it isn't pretty for the party they are coming after.

Just a note to the poster in this case: [figment] If you can post the law, regulation or code where it tells you you do not have to do these things, I would certainly like to see it. I know I can post where it TELLS you you have to do ALL these things in order to be legal and meet the obligations that you have when opening a business.

CJ