# Is it necessary to really have a business licence?



## imagemaker46

This is a straight up question.  All through the forum people are constantly pushing that new photographers must have a licence, get insurance, and follow all the state and provincial laws of the land, talk to lawyers, make it all legal. My feeling is that none of this really necessary or practiced by the majority of people just starting out, or attempting to work as professionals.  If someone is shooting and accepting payment for work, declares it as income, (but pays the year end taxes on that income)  They doesn't collect any taxes for the work, but charge it straight up , a $300 shoot is $300, with no additional tax added.  I know that not collecting the taxes, not being able to right off gear, or office supplies, office space( a room in the house) doesn't get you those little perks to help offset some costs.

So the question, Is it necessary to be registered as a business to take pictures? Does it really matter for 99% of the starting professionals?


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## runnah

Oh god yes. It's not too hard to get one. 

I manage to avoid a lot of hassle because I am offering a service and not selling goods so a lot of paper work is avoided. At the end of the day the trouble it takes to do everything right is 100x easier then going back and fixing what you did wrong.

Oh and pay your taxes.


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## amolitor

Canada may be radically different than the USA on this front.


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## paigew

As far as a business license goes, I think that varies state to state.  I do not have a business license, but I do have business insurance, and I  pay my taxes . I charge tax (on products and services) but it is built into my price.


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## FreestyleOutdoors

I can tell you from owning my own small business(not photography) that NO you do not NEED one. As long as you are a sole proprietorship you take note of all revenue generated and all expenses paid(keep receipts) and fill out a schedule when doing your personal income taxes. It is as simple as that.

Oh and just a tip, you CAN show a loss for the first 3 years, but I wouldn't, always show breaking even or small profits.


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## runnah

amolitor said:


> Canada may be radically different than the USA on this front.



Their economy is based largely on pelts.


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## amolitor

runnah said:


> amolitor said:
> 
> 
> 
> Canada may be radically different than the USA on this front.
> 
> 
> 
> 
> Their economy is based largely on pelts.
Click to expand...


I thought it was based on beaver?


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## runnah

amolitor said:


> runnah said:
> 
> 
> 
> 
> 
> amolitor said:
> 
> 
> 
> Canada may be radically different than the USA on this front.
> 
> 
> 
> 
> Their economy is based largely on pelts.
> 
> Click to expand...
> 
> 
> I thought it was based on beaver?
Click to expand...


Beavers are like little swimming 401k's in Canada. You have to wait until they get real fat before you cash them in.


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## imagemaker46

I know it's not difficult to register a business, but how many people really do?  My guess is that in photography, very few.


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## 12sndsgood

was the first thing I did. I also tend to worry so I wanted to make sure I was doing everything legally and properly. I believe you don't neeed a id if your not making over a certain amount. but that amount was pretty low. I want to say it was like $700 or something like that.  one benefit for me personally is that with my id I can charge what I want to for prints on my website and collect that money. sites like zenfolio require your tax id # to change prices. so for me the cost ($30) I believe it was. has allowed me to make money off of print sales so it was worth it. They aren't hard to apply for and get.  

I would bet that a lot of your facebook companies (something I consider myself to fall under) to not have any of that let alone insurance. there just doing a shoot and pocketing the money no different then a kid going door to door cutting lawns.


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## pixmedic

imagemaker46 said:


> I know it's not difficult to register a business, but how many people really do?  My guess is that in photography, very few.



in florida (in our county anyway), you dont have to have a business license unless you have a storefront. (we live outside city limits though, IN city limits different rules apply) its always important to check your particular countys business rules. 
my wife just has a sole proprietorship with a registered DBA business name and a tax ID number through which she pays quarterly taxes. 
(in our county this is called a business partner # and tax certificate #)

as to how many people actually register their photography business and pay taxes? probably very few. it would be interesting (but time consuming) to get on FB and Craigslist, dig up a bunch of photography "businesses" and email them posing as a client, but at the very end tell them the last little detail you need to verify is their tax ID or business license number. see how many can actually produce one.


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## Big Mike

I'd guess that it comes down to the jurisdiction.  My business license is with the city and it's the city that requires all business to be licensed.  There is the actual business license, the permit for the location of the business (my home) and the applicable taxes.  It's all rolled into one fee.

I don't know exactly what their enforcement is like...I don't think they search the phone book and internet looking for unregistered businesses, but I do know that when your yearly license is up, they will look into whether you are still in business or not.  I don't always get mine done on time and they certainly let me know that there are big fines for running an unlicensed business. 

But yes, I would guess that there are a fair number of people who are making some income without being registered etc.  Probably lots of them who aren't paying taxes on that income as well.


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## tirediron

Is it necessary?  Absolutely not.  Is it necessary?  That depends.  Like Mike my region requires that EVERYONE transacting business be licensed.  I think turning over the $100-ish dollars a year for the license is relatively cheap compared to what it might cost if the local by-law enforcement officer noticed my advertising and thought, "You know what, I don't remember seeing that name on the licenses list..." Should you?  IMO, yes!  How many do?  I don't know, but I suspect it's not a lot higher or lower than other side-line businesses; guys that run 'handy-man' businesses out of their trucks, back yard "mechanics", etc...


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## runnah

The fine for fishing with out a license in Maine is $250, the cost of a license is $30.


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## 12sndsgood

the one thing that got me was sales tax. if your pretending to be a business the state wants there sales tax. and if you don't pay it, and they find out your doing business and can not verify money then they just hit you with a standard fee. $500 a month Is what Indiana decides is an average sales figure so that is the bill they send you.  Yeah nothing like being in business for a few months, forgetting to turn in my sales tax for a month and then getting that bill in the mail. Talk about freaking out.


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## sm4him

12sndsgood said:


> the one thing that got me was sales tax. if your pretending to be a business the state wants there sales tax. and if you don't pay it, and they find out your doing business and can not verify money then they just hit you with a standard fee. $500 a month Is what Indiana decides is an average sales figure so that is the bill they send you.  Yeah nothing like being in business for a few months, forgetting to turn in my sales tax for a month and then getting that bill in the mail. Talk about freaking out.



So, let's say I register as a business, but in six months' time, I haven't actually sold anything, or maybe I make a $25-50 sale two of those six months. Am I gonna hit with a bill like that because they just ASSUME I must be making money since I'm "in business?"  
Would I have to file a sales tax report every month JUST to say I didn't sell anything? Because THAT sounds like a giant pain in the sit-upon.

The idea of all the extra paperwork is what keeps me from seriously considering making the leap. Since I'm NOT registered, though, I also go out of my way to NOT charge money for anything I do. If I do a shoot for someone it's either free, or maybe they buy me lunch. If I "sell" a print, I sell it for what it cost me, because I don't want the hassle of keeping up with all that, when I probably wouldn't make $500 a year from all of it, anyway (and by "make," I mean gross, not net. I probably wouldn't MAKE anything in the way of profit).


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## pixmedic

sm4him said:


> 12sndsgood said:
> 
> 
> 
> the one thing that got me was sales tax. if your pretending to be a business the state wants there sales tax. and if you don't pay it, and they find out your doing business and can not verify money then they just hit you with a standard fee. $500 a month Is what Indiana decides is an average sales figure so that is the bill they send you.  Yeah nothing like being in business for a few months, forgetting to turn in my sales tax for a month and then getting that bill in the mail. Talk about freaking out.
> 
> 
> 
> 
> So, let's say I register as a business, but in six months' time, I haven't actually sold anything, or maybe I make a $25-50 sale two of those six months. Am I gonna hit with a bill like that because they just ASSUME I must be making money since I'm "in business?"
> Would I have to file a sales tax report every month JUST to say I didn't sell anything? Because THAT sounds like a giant pain in the sit-upon.
> 
> The idea of all the extra paperwork is what keeps me from seriously considering making the leap. Since I'm NOT registered, though, I also go out of my way to NOT charge money for anything I do. If I do a shoot for someone it's either free, or maybe they buy me lunch. If I "sell" a print, I sell it for what it cost me, because I don't want the hassle of keeping up with all that, when I probably wouldn't make $500 a year from all of it, anyway (and by "make," I mean gross, not net. I probably wouldn't MAKE anything in the way of profit).
Click to expand...


if you dont file, it isnt a bill for what they assume you have been making, but a set fine for failing to pay sales taxes. 
as soon as you tell the state you have a business, you have to file sales taxes quarterly or you are fined for it.


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## imagemaker46

Basically if you don't register, don't let any city, state, provincial bodies know that you are running a "quiet" business then the chances of anyone tracking you is slim. So stay quiet, make money, pay your taxes on it when you file as extra income, and they would be more than happy to get the taxes without question, and that's all that is necessary to run professional photographic business.

Does this bother any of the working professionals on this forum that are running their businesses, or is it another one of those who really cares what other people do?


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## pixmedic

imagemaker46 said:


> Basically if you don't register, don't let any city, state, provincial bodies know that you are running a "quiet" business then the chances of anyone tracking you is slim. So stay quiet, make money, pay your taxes on it when you file as extra income, and they would be more than happy to get the taxes without question, and that's all that is necessary to run professional photographic business.
> 
> Does this bother any of the working professionals on this forum that are running their businesses, or is it another one of those who really cares what other people do?



it will also depend on how much money you are making. you can only declare so much "recreational" income before they want to know where its coming from. 
it doesn't bother me much what other people do, but if you ASK me what it takes set up a photography business, proper licensing per your county is at the top of my list. 
personally, I find people operating under the table like that to be morally questionable. taxes are what makes the country function. its what funds our schools, roads, water treatment, fire/EMS, hospitals....and many of those things are suffering. people willing to subvert income the system needs (and legally requires) makes me wonder what other things they are willing to morally and ethically "overlook" for their own greed.


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## KmH

imagemaker46 said:


> *Is it necessary to really have a business licence?*


It's necessary if you don't want to suffer the financial burdens (fines and penalties) imposed if caught.

As pointed out by Mike, requirements vary by state, city, or county if you're outside a city limit.



imagemaker46 said:


> Basically if you don't register, don't let any city, state, provincial bodies know that you are running a "quiet" business then the chances of anyone tracking you is slim. So stay quiet, make money, pay your taxes on it when you file as extra income, and they would be more than happy to get the taxes without question, and that's all that is necessary to run professional photographic business.
> 
> Does this bother any of the working professionals on this forum that are running their businesses, or is it another one of those who really cares what other people do?


Actually, the chances of being caught are a lot greater than many people realize.

An appreciable % of un-registered/licensed businesses that come to the attention of authorities get reported by competitors and/or unhappy customers.
A lot of cities/towns/counties/states have budget problems and use computer programs to help them identify un-registered/licensed businesses.
Some of the computer programs compare employer reported income to tax payer reported income and raise red flags when there is an undocumented discrepancy.

Notwithstanding that without a registered/license business, there are other legal implications.

Other businesses that are legal definitely should be bothered by un-registered/licensed businesses, because as mentioned un-registered/licensed businesses are generally not collecting/paying applicable sales/use/city taxes, not keeping the required business records, and generally taking, intentionally or unintentionally, as many shortcuts as possible.


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## Big Mike

> Does this bother any of the working professionals on this forum that are running their businesses, or is it another one of those who really cares what other people do?


I'd guess that a lot of those people are mostly ignorant of the rules, and while I don't like it, it doesn't bother me too much.  But if people are willfully avoiding getting a licence and paying their fees & taxes, then I have a problem with it.

Now...if those people were in direct competition with me, and if I were loosing clients to them...well then, that's a problem isn't it?  I don' know how often it happens, but you might think that it would be in a professional photographer's best interests to turn in their competitors who are breaking the law.


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## Big Mike

Another issue, here in Canada is registering for (and thus charging) GST (Goods and Service Tax).  The threshold is (iirc) $20,000.  If you make more than that, you must have a GST number and charge/pay it.  On the plus side, by having a GST number you are allowed to directly write off the GST that you pay for business purchases.  (or something like that).  

Might be similar for Provincial Sales Tax (PST) but I live & work in Alberta, so I don't know anything about PST .


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## imagemaker46

Big Mike said:


> Does this bother any of the working professionals on this forum that are running their businesses, or is it another one of those who really cares what other people do?
> 
> 
> 
> I'd guess that a lot of those people are mostly ignorant of the rules, and while I don't like it, it doesn't bother me too much. But if people are willfully avoiding getting a licence and paying their fees & taxes, then I have a problem with it.
> 
> Now...if those people were in direct competition with me, and if I were loosing clients to them...well then, that's a problem isn't it? I don' know how often it happens, but you might think that it would be in a professional photographer's best interests to turn in their competitors who are breaking the law.
Click to expand...


I think it happens a lot more than would be expected. I know of several in my home town that are working full time as photographers and aren't charging taxes on any of the income they are making.  They feel that using the name photographer isn't the same as using photography, one sounds personal the other sounds business.  

These guys are in direct competition with me.  I'm guessing you'll find quite a few in Edmonton as well.


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## imagemaker46

Big Mike said:


> Another issue, here in Canada is registering for (and thus charging) GST (Goods and Service Tax). The threshold is (iirc) $20,000. If you make more than that, you must have a GST number and charge/pay it. On the plus side, by having a GST number you are allowed to directly write off the GST that you pay for business purchases. (or something like that).
> 
> Might be similar for Provincial Sales Tax (PST) but I live & work in Alberta, so I don't know anything about PST .



Isn't it $30,000, or has that changed?


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## amolitor

I assume that being a properly set up legal business makes much of the accounting easier. Are you depreciating camera gear? Would you like to offset some taxes with the money you spent on gas getting to gigs? And so on.

If you're making more than a few bucks, I assume that being a properly legal business pays for itself quite briskly, in most jurisdictions.


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## Overread

Variations in state, county, city, and national laws mean that the question is too complex for a simple answer on an international forum where multiple different groups are aware only of their own local setup.

I think that encouraging newbies to register at the very least gives them the incentive to actually go look at their local laws. To consider for themselves if they really need to or are required to as well as the penalties for failing to do so. IT is very solid an good stock advice for the newbie to consider and also makes them think more seriously about the job. It's their own choice and option to research their own personal situation and then make the right choice based on what their local and national laws require of them.


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## nycphotography

imagemaker46 said:


> Big Mike said:
> 
> 
> 
> 
> 
> 
> Does this bother any of the working professionals on this forum that are running their businesses, or is it another one of those who really cares what other people do?
> 
> 
> 
> I'd guess that a lot of those people are mostly ignorant of the rules, and while I don't like it, it doesn't bother me too much. But if people are willfully avoiding getting a licence and paying their fees & taxes, then I have a problem with it.
> 
> Now...if those people were in direct competition with me, and if I were loosing clients to them...well then, that's a problem isn't it? I don' know how often it happens, but you might think that it would be in a professional photographer's best interests to turn in their competitors who are breaking the law.
> 
> Click to expand...
> 
> 
> I think it happens a lot more than would be expected. I know of several in my home town that are working full time as photographers and aren't charging taxes on any of the income they are making.  They feel that using the name photographer isn't the same as using photography, one sounds personal the other sounds business.
> 
> These guys are in direct competition with me.  I'm guessing you'll find quite a few in Edmonton as well.
Click to expand...


How do you "charge" taxes on "income"?  That is a nonsense statement.  In the US you "report" income, "deduct" expenses, and "pay" taxes on what's left.   You charge sales tax on products sold, but products sold does not = income (hint, any product has a cost of good sold (else it is a service) and thus, income is not the same as sales).

Now consider... a wedding photographer might shoot in 3 or 5 or even 20 counties, and sometimes in 2 or 3 states (NY, NJ, CT for example). Nothing like dealing with 15 different "authorities" to consume a whole lot of time you're prefer to spend actually adding value to your business.  This is why people tend to avoid licensing.  Yes they might be avoiding taxes also, but really, if you're making less than 5k a yer doing something, the odds are your expenses will wipe out most of it and the tax evasion is in the low 3 figures, not the high 4 or 5 figures people like to assume.

Having done several side businesses over the years in various jurisdictions and having dealt with the authorities appropriately, I currently REFUSE to do ANYTHING where I will ever have to hire an employee.  The paperwork, reporting, and compliance risk is JUST NOT WORTH IT.  I also refuse to start any business activity that is required to collect or report sales tax.  The paperwork, reporting, and compliance risk is JUST NOT WORTH IT.

If I were starving and HAD to do that kind of business, the fact that I were starving would almost certainly mean I would start out under the radar.  how long would I stay under the radar?  Hard to say, but the fact is once someone finds a way to make things work, they tend not to rethink or change them.

Am I an evil tax dodger?  I don't think so, but you're welcome to form your own opinion.

I think the premise that "unlicensed" = "nefarious intent" is a broken assumption.  Yeah, sometimes it's true.  But stupid **** like if I don't file a sales tax return, rather than "assuming" a zero sales return and "coalescing the nulls" with a zero cost event, they "assume" I'm stealing income and fining me $500?   that just means I'll never, ever, opt in to that system so long as I an possibly find a way to avoid it.  The reality is that the asshats in the local governments make it as painful as possible to deal with them.  THAT'S why people avoid them like the plague.


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## jamesbjenkins

sm4him said:


> So, let's say I register as a business, but in six months' time, I haven't actually sold anything, or maybe I make a $25-50 sale two of those six months. Am I gonna hit with a bill like that because they just ASSUME I must be making money since I'm "in business?"
> Would I have to file a sales tax report every month JUST to say I didn't sell anything? Because THAT sounds like a giant pain in the sit-upon.
> 
> The idea of all the extra paperwork is what keeps me from seriously considering making the leap. Since I'm NOT registered, though, I also go out of my way to NOT charge money for anything I do. If I do a shoot for someone it's either free, or maybe they buy me lunch. If I "sell" a print, I sell it for what it cost me, because I don't want the hassle of keeping up with all that, when I probably wouldn't make $500 a year from all of it, anyway (and by "make," I mean gross, not net. I probably wouldn't MAKE anything in the way of profit).



I can't speak for the other states, but up until 2013, Texas had quarterly filings required if you held a sales and use tax ID. This year they changed it to an annual filing (Thanks to be God!) 

If you didn't make anything, for that quarter/year, then you just file your form for $0. No tax. Yet another reason why Texas is better...especially better than Maine. 

Edit:

As to your original question, Imagemaker... I'd guess that the vast majority of self-proclaimed professional photographers don't follow the law and register their business. However, that's no surprise since they mostly don't have a clue about anything in photography or business. However, I can almost guarantee that every last person who takes it very seriously is going to be registered. If you're the type to spend $20k on gear, thousands of hours practicing and studying, untold amounts of energy marketing yourself...chances are pretty good you're going to jump through a couple of hoops to make sure you're above board with Uncle Sam.


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## imagemaker46

nycphotography said:


> imagemaker46 said:
> 
> 
> 
> 
> 
> Big Mike said:
> 
> 
> 
> I'd guess that a lot of those people are mostly ignorant of the rules, and while I don't like it, it doesn't bother me too much. But if people are willfully avoiding getting a licence and paying their fees & taxes, then I have a problem with it.
> 
> Now...if those people were in direct competition with me, and if I were loosing clients to them...well then, that's a problem isn't it? I don' know how often it happens, but you might think that it would be in a professional photographer's best interests to turn in their competitors who are breaking the law.
> 
> 
> 
> 
> I think it happens a lot more than would be expected. I know of several in my home town that are working full time as photographers and aren't charging taxes on any of the income they are making. They feel that using the name photographer isn't the same as using photography, one sounds personal the other sounds business.
> 
> These guys are in direct competition with me. I'm guessing you'll find quite a few in Edmonton as well.
> 
> Click to expand...
> 
> 
> How do you "charge" taxes on "income"? That is a nonsense statement. In the US you "report" income, "deduct" expenses, and "pay" taxes on what's left. You charge sales tax on products sold, but products sold does not = income (hint, any product has a cost of good sold (else it is a service) and thus, income is not the same as sales).
> 
> Now consider... a wedding photographer might shoot in 3 or 5 or even 20 counties, and sometimes in 2 or 3 states (NY, NJ, CT for example). Nothing like dealing with 15 different "authorities" to consume a whole lot of time you're prefer to spend actually adding value to your business. This is why people tend to avoid licensing. Yes they might be avoiding taxes also, but really, if you're making less than 5k a yer doing something, the odds are your expenses will wipe out most of it and the tax evasion is in the low 3 figures, not the high 4 or 5 figures people like to assume.
> 
> Having done several side businesses over the years in various jurisdictions and having dealt with the authorities appropriately, I currently REFUSE to do ANYTHING where I will ever have to hire an employee. The paperwork, reporting, and compliance risk is JUST NOT WORTH IT. I also refuse to start any business activity that is required to collect or report sales tax. The paperwork, reporting, and compliance risk is JUST NOT WORTH IT.
> 
> If I were starving and HAD to do that kind of business, the fact that I were starving would almost certainly mean I would start out under the radar. how long would I stay under the radar? Hard to say, but the fact is once someone finds a way to make things work, they tend not to rethink or change them.
> 
> Am I an evil tax dodger? I don't think so, but you're welcome to form your own opinion.
> 
> I think the premise that "unlicensed" = "nefarious intent" is a broken assumption. Yeah, sometimes it's true. But stupid **** like if I don't file a sales tax return, rather than "assuming" a zero sales return and "coalescing the nulls" with a zero cost event, they "assume" I'm stealing income and fining me $500? that just means I'll never, ever, opt in to that system so long as I an possibly find a way to avoid it. The reality is that the asshats in the local governments make it as painful as possible to deal with them. THAT'S why people avoid them like the plague.
Click to expand...



I charge my clients taxes on my professional fees/service, prints, print sales, computer work, mileage, well everything really. I don't charge taxes on work outside of Canada.


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## pixmedic

nycphotography said:


> imagemaker46 said:
> 
> 
> 
> 
> 
> Big Mike said:
> 
> 
> 
> I'd guess that a lot of those people are mostly ignorant of the rules, and while I don't like it, it doesn't bother me too much. But if people are willfully avoiding getting a licence and paying their fees & taxes, then I have a problem with it.
> 
> Now...if those people were in direct competition with me, and if I were loosing clients to them...well then, that's a problem isn't it? I don' know how often it happens, but you might think that it would be in a professional photographer's best interests to turn in their competitors who are breaking the law.
> 
> 
> 
> 
> I think it happens a lot more than would be expected. I know of several in my home town that are working full time as photographers and aren't charging taxes on any of the income they are making.  They feel that using the name photographer isn't the same as using photography, one sounds personal the other sounds business.
> 
> These guys are in direct competition with me.  I'm guessing you'll find quite a few in Edmonton as well.
> 
> Click to expand...
> 
> 
> How do you "charge" taxes on "income"?  That is a nonsense statement.  In the US you "report" income, "deduct" expenses, and "pay" taxes on what's left.   You charge sales tax on products sold, but products sold does not = income (hint, any product has a cost of good sold (else it is a service) and thus, income is not the same as sales).
> 
> Now consider... a wedding photographer might shoot in 3 or 5 or even 20 counties, and sometimes in 2 or 3 states (NY, NJ, CT for example). Nothing like dealing with 15 different "authorities" to consume a whole lot of time you're prefer to spend actually adding value to your business.  This is why people tend to avoid licensing.  Yes they might be avoiding taxes also, but really, if you're making less than 5k a yer doing something, the odds are your expenses will wipe out most of it and the tax evasion is in the low 3 figures, not the high 4 or 5 figures people like to assume.
> 
> Having done several side businesses over the years in various jurisdictions and having dealt with the authorities appropriately, I currently REFUSE to do ANYTHING where I will ever have to hire an employee.  The paperwork, reporting, and compliance risk is JUST NOT WORTH IT.  I also refuse to start any business activity that is required to collect or report sales tax.  The paperwork, reporting, and compliance risk is JUST NOT WORTH IT.
> 
> If I were starving and HAD to do that kind of business, the fact that I were starving would almost certainly mean I would start out under the radar.  how long would I stay under the radar?  Hard to say, but the fact is once someone finds a way to make things work, they tend not to rethink or change them.
> 
> Am I an evil tax dodger?  I don't think so, but you're welcome to form your own opinion.
> 
> I think the premise that "unlicensed" = "nefarious intent" is a broken assumption.  Yeah, sometimes it's true.  But stupid **** like if I don't file a sales tax return, rather than "assuming" a zero sales return and "coalescing the nulls" with a zero cost event, they "assume" I'm stealing income and fining me $500?   that just means I'll never, ever, opt in to that system so long as I an possibly find a way to avoid it.  The reality is that the asshats in the local governments make it as painful as possible to deal with them.  THAT'S why people avoid them like the plague.
Click to expand...


if you charge for photography, you legally have to collect sales tax. you are selling a product. period. 
the taxes businesses pay quarterly is a sales tax, which is completely separate from when you file your income taxes in april. 
even if you provide a service, and not a directly transferable produce, you are STILL responsible for collecting and paying sales tax. 
it doesn't matter whether you are selling a product, a service, or even an opinion. 
if a wedding photographer is shooting in 15 counties, they STILL only have a business registered in ONE county. and that is the county in which they pay their taxes. 
it actually isn't THAT horribly complicated. if, at some point, it DOES become "that horribly complicated" there are tax consultants in pretty much every county to get that stuff straightened out. if your shooting in 15 counties and multiple states, you probably make enough to hire a tax guy. if not, you should probably just stick to your home area. 

yea, the department of revenue is absolutely RETARDED...as are their business methods. I HATE dealing with them. 
but it is still the law. ignorance, inconvenience, or monetary gain is not an excuse to circumvent the law. 
the reason is irrelevant, the penalties are the same.

most people here dont want to hear any excuses for committing copyright infringement, or image theft...why are excuses for tax evasion so different?


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## astroNikon

In Michigan, as I'm sure other states, depending upon how you operate can help in making a decision.

You can run as a "Hobby".  Michigan has about 7 line items that you must qualify to be a hobby.
In essense not taking any money for income is a big one (not writing things off in taxes, etc).
The IRS and state normally identifies a profit amount as a business, I think it's $800 per year.

You can get a simple Sole Proprietorship / DBA (Doing Business As) from the County.  This is something usually under $25.  Then you are officially a business.  But as a DBA you are also totally liable both personally and professionally. But you can write off a new computer, software, camera gear, space in the house to operate, marketing costs, marketing material etc etc etc   

Then you can move up to a Incorporation or a LLC.  This limits your liability.
The Insurance also can help limit your liability or loss (theft)
and so on and so forth

Also your DBA name is only a county name  The next county could have a photog DBA with the same name.  As you move up to incorporation and LLC then there is a wider state search for similar names.

FYI that State definition of a "Hobby" is like a business hobby.  Not a "hobby" where we buy a camera and take pictures of everything that we enjoy and have fun doing.

If you start charging people Sales Tax and pocket it, then the state finds out about it. Well, that could be a problem.
If you do an odd job here or there and don't charge alot I can't see how it hurts, but refer to that $800 rule.


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## nycphotography

pixmedic said:


> most people here dont want to hear any excuses for committing copyright infringement, or image theft...why are excuses for tax evasion so different?



Just because most people don't want to hear real world circumstances that invalidate their "black or white but never gray" view of the world doesn't in any way change the reality of the real world circumstances.  Copyright infringement is a great poster child for that fact, btw.

But staying on topic... having first hand experience dealing with this crap in the past... it does suck and it does leave an aftertaste.

Also, not every state collects sales tax on "service" or "labor".  Or at least they didn't used to.


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## pixmedic

nycphotography said:


> pixmedic said:
> 
> 
> 
> most people here dont want to hear any excuses for committing copyright infringement, or image theft...why are excuses for tax evasion so different?
> 
> 
> 
> 
> Just because most people don't want to hear real world circumstances that invalidate their "black or white but never gray" view of the world doesn't in any way change the reality of the real world circumstances.  Copyright infringement is a great poster child for that fact, btw.
> 
> But staying on topic... having first hand experience dealing with this crap in the past... it does suck and it does leave an aftertaste.
> 
> Also, not every state collects sales tax on "service" or "labor".  Or at least they didn't used to.
Click to expand...


Florida does. They consider service as a "product" and they are like starving, rabid animals about it. 
if the Florida DOR makes a mistake, you just have to deal with it. if YOU make a mistake, you have to pay their fines.
sometimes, THEY make a mistake, YOU have to pay the fines, and then HOPE  you can convince them it WAS their fault and get a refund. 
(been there, done that) they typically wont even deal with that issue until you have paid the fine first. 

To answer IM46's question though. yes. it IS legally necessary to have a business license (or tax ID, DBA #, or whatever your municipality requires) if you are operating as a business and/or making money with it to whatever monetary degree your particular municipality has set their limit to.


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## nycphotography

pixmedic said:


> nycphotography said:
> 
> 
> 
> 
> 
> pixmedic said:
> 
> 
> 
> most people here dont want to hear any excuses for committing copyright infringement, or image theft...why are excuses for tax evasion so different?
> 
> 
> 
> 
> Just because most people don't want to hear real world circumstances that invalidate their "black or white but never gray" view of the world doesn't in any way change the reality of the real world circumstances.  Copyright infringement is a great poster child for that fact, btw.
> 
> But staying on topic... having first hand experience dealing with this crap in the past... it does suck and it does leave an aftertaste.
> 
> Also, not every state collects sales tax on "service" or "labor".  Or at least they didn't used to.
> 
> Click to expand...
> 
> 
> Florida does. They consider service as a "product" and they are like starving, rabid animals about it.
> if the Florida DOR makes a mistake, you just have to deal with it. if YOU make a mistake, you have to pay their fines.
> sometimes, THEY make a mistake, YOU have to pay the fines, and then HOPE  you can convince them it WAS their fault and get a refund.
> (been there, done that) they typically wont even deal with that issue until you have paid the fine first.
> 
> To answer IM46's question though. yes. it IS legally necessary to have a business license (or tax ID, DBA #, or whatever your municipality requires) if you are operating as a business and/or making money with it to whatever monetary degree your particular municipality has set their limit to.
Click to expand...


I think we're in agreement here.

Just an "oh by the way"... if you are starting out... see if anyone you know is willing to "front door" for you, and pay you through as "contact labor".

IE, if they're willing to take a 20% scalp, charge the client the $1000, give you $800 and a 1099, and pocket the $200 for dealing with the paperwork, sales tax, and other crap.

That's how half the IT jobs work, so I imagine it would work here too.


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## Derrel

MY state has an on-line web site and a nifty "wizard" page that potential business owners can use to determine what license, if ANY, is needed, for various types of businesses and services. We have NO general sales tax on anything. So, there's no need to collect sales tax from any buyer of anything. Which is pretty handy, and eliminates a whole separate category of headache that most people must deal with.

License Directory - Oregon Licenses, Permits and Registrations


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## amolitor

If the hippies and the rednecks can agree on anything, it's "government out of my life". Or you can just say "Oregon".


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## MSnowy

I put out a "Yard Sale" sign when I sell prints. Everyone knows that people who have yard sales never pay taxes. Plus "cash is king" around here.


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## Derrel

amolitor said:


> If the hippies and the rednecks can agree on anything, it's "government out of my life". Or you can just say "Oregon".



My ex-wife used to work for the Oregon Economic Development Division, back in the early days of the division. They did a lot of opinion polling, which confirmed what S.N.O.B.s* already knew...that natives to this area are very tolerant of what other people do, because they share a very high degree of agreement about one fundamental idea: that government must stay OUT of the personal lives of the citizenry. But then, I know you lived in Corvallis for a while, and Deadwood too, and know this from experience. And yes, both hippies and rednecks alike actually state in polling that government needs to keep the hell out of peoples' bedrooms, basements, barns, attics, living rooms, yurts, condos, apartments, and so on.

* S.N.O.B. Society of Native Oregon Born, from a famous bumper sticker made popular during the California invasion.


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## amolitor

Yep! I was being amusing (I hope) but accurate! I am always pleased when I see that OR has remained to a degree the same. It was a pretty awesome place 25 years ago.


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## imagemaker46

So the simple answer to my question is no. All you need is a camera.


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## vintagesnaps

Seems to depend to some extent on your state; in mine you have to make a certain amount of extra income per year to have to pay taxes on it and there aren't licenses for doing work as a photographer AFAIK. I don't know how it works for someone who is running their own full time photography business (other local photographers I know do it part time). 

I imagine there are plenty of people selling items online and having yard sales etc. and not filing or paying taxes. I would think someone running a business fulltime, or part time if you're making enough money at it, would need to file and pay taxes especially if accepting checks, credit cards, etc. (especially if work was done for a business and they cut you a check it would show up when they file, so I imagine it could bite ya in the ass if you didn't report receiving it). I would rather pay taxes at the time than have to pay the tax as well as penalties later. 

I've always had insurance thru my fulltime job. If I was going to do something like portraits where I'd be responsible for choosing the location (possibly outdoors), setting up the shots, etc. I'd probably look into insurance to cover anything that might happen where I could be held responsible.

I had a couple of photos accepted into juried exhibits earlier this year and I just got another accepted - if this one sells it probably would still be under the amount necessary to pay taxes on it (unless I price it awfully high!). At some point I'll need to see if I'm at the level where I need to report the additional income (chances are that won't happen by the end of the year).


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## vintagesnaps

Simple answer?? Don't know if there is one. Is it necessary to be registered as a business? Seems to depend... on where you live, how much you make, what type of photography work you're doing and what expenses you have, etc. etc.


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## JacaRanda

I agree that Oregon peeps are really cool. At least my experience in Portland, Ashland, and even Medford.

There are also some differences if you are selling tangible items or not.  Buying software in the box versus downloading it.


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## Rwsphotos

Simple answer there is none.  Every state, county and city have diffrent rules. It is best to see what your area specifically requires.  Is it necessary? If you want to look and take it seriously Yes. If you prefer to fly by the seat if your pants and hope you go unnoticed I say good luck.  It will cost you more if your caught than to do things the way your region says to.  Going on the assumption you won't because your quiet about it is taking a risk. Qestion then becomes is that a risk your bussiness can cash?  Me not taking that chance.


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## imagemaker46

vintagesnaps said:


> Simple answer?? Don't know if there is one. Is it necessary to be registered as a business? Seems to depend... on where you live, how much you make, what type of photography work you're doing and what expenses you have, etc. etc.



How many people that have facebook based photo businesses, or work from craigs list, will have registered anything? Are people that go out and buy an entry based digi cam, that play on weekends shooting weddings, portraits, babies, sports, on a part time basis going to bother to tell any government officials they are taking and selling pictures for cash?  I have my doubts that many have any kind of registration at all anymore.  It's too easy not to.

The advantages to having a registered business are obvious, but for many part time professionals it probably isn't worth the paperwork..


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## Rwsphotos

Its worth it if they get reported.  How likely is it that they will get reported??? your guess is a good as mine. But when they get sued or threatened with a law suit or have The better business bureau called by an angry customer which will eventually happen if they are selling their photography it will be to late for that part time mom with a camera to protect herself.  Does not matter if she is only part time supplementing there are no exceptions when you start taking money.


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## 12sndsgood

sm4him said:


> 12sndsgood said:
> 
> 
> 
> the one thing that got me was sales tax. if your pretending to be a business the state wants there sales tax. and if you don't pay it, and they find out your doing business and can not verify money then they just hit you with a standard fee. $500 a month Is what Indiana decides is an average sales figure so that is the bill they send you. Yeah nothing like being in business for a few months, forgetting to turn in my sales tax for a month and then getting that bill in the mail. Talk about freaking out.
> 
> 
> 
> 
> So, let's say I register as a business, but in six months' time, I haven't actually sold anything, or maybe I make a $25-50 sale two of those six months. Am I gonna hit with a bill like that because they just ASSUME I must be making money since I'm "in business?"
> Would I have to file a sales tax report every month JUST to say I didn't sell anything? Because THAT sounds like a giant pain in the sit-upon.
> 
> The idea of all the extra paperwork is what keeps me from seriously considering making the leap. Since I'm NOT registered, though, I also go out of my way to NOT charge money for anything I do. If I do a shoot for someone it's either free, or maybe they buy me lunch. If I "sell" a print, I sell it for what it cost me, because I don't want the hassle of keeping up with all that, when I probably wouldn't make $500 a year from all of it, anyway (and by "make," I mean gross, not net. I probably wouldn't MAKE anything in the way of profit).
Click to expand...



You would really need to check with your state on that. In Indiana they have made it pretty easy on me. I don't have to pay sales tax on my session feels just on items sold. I mainly sell prints off my site right now so that's all I pay sales tax on. each month I just hop on there site, put in the amount I sold and in about 30 seconds I either come out with a 0 or I owe a few bucks. I have forgotten do do it here and there and im able to just go in and put the info in.   you can pay it quarterly but you have to have a good estimate of where you would be at. I had no clue so I just choose to do it monthy. For Indiana it literally takes me maybe 3-4 minutes to take care of.


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## 12sndsgood

imagemaker46 said:


> vintagesnaps said:
> 
> 
> 
> Simple answer?? Don't know if there is one. Is it necessary to be registered as a business? Seems to depend... on where you live, how much you make, what type of photography work you're doing and what expenses you have, etc. etc.
> 
> 
> 
> 
> How many people that have facebook based photo businesses, or work from craigs list, will have registered anything? Are people that go out and buy an entry based digi cam, that play on weekends shooting weddings, portraits, babies, sports, on a part time basis going to bother to tell any government officials they are taking and selling pictures for cash? I have my doubts that many have any kind of registration at all anymore. It's too easy not to.
> 
> The advantages to having a registered business are obvious, but for many part time professionals it probably isn't worth the paperwork..
Click to expand...



Hard to say how many do or don't I think you can take a look at a lot of companies and probably guess pretty well who does and who doesn't, me Im just not willing to risk my livelihood to try and sneak the system. I have a friend who isn't insured and not thru the state. and to me that's just scary. You never know when something will happen, and when it does the state would likely go after you big time for all that money it assumes its loosing, plus penalties and fines. I mean Ive been in business for around 16 months. at the states estimate of $500 a month in taxes i'd be looking at an easy 8 grand right there right off the bat. that a couple grand more then ive made so far. not to mention i'm sure there would be federal repercussions.  

To be honest for me where i'm at the paperwork was way easier then I thought it would be.  But I would put money that i'm one of the exceptions to the rule and not the norm.  Think the big question is these facebook businesses out there, are they making any money at all.


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## KmH

For the purposes of this tread, the term license doesn't refer to a certificate of expertise, but a permission to operate a business.

One of the reasons business registration/licensing is required is to make sure multiple businesses in the same industry do not have the same name.


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## Gavjenks

It depends on your jurisdiction. It is indeed necessary in some places.  In my town and state for instance, if you're running a home business, you need a license if you want to hang a sign bigger than such and such many inches in size, or if you want to have walk in clients, or if your business is too obvious from the street, etc. Otherwise no.  And the state requires licenses mainly for specific types of special businesses, like food service. Just call up your local chamber of commerce or relevant government office and ask.


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## pixmedic

License makes for honorable and business legally for you.


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## JacaRanda

For instance: Licenses and Permits - City of Mission Viejo

Not requiring a business license from the City of Mission Viejo in no way relieves potential businesses from federal, state, and/or local requirements. You will need to contact the Community Development Department to discuss whether you business will need to obtain any additional permits, approvals, or inspections.


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## vintagesnaps

I'm sure Scott that there are people out there who have cameras and take photos and list themselves on craigslist or facebook as photographers and may or may not keep track of what they get paid, and may or may not report the additional income, etc. Doesn't necessarily mean they're actually photographers much less professionals. Guess it's up to each person how they want run their business or at what point it's necessary to keep records and file taxes etc.


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## DiskoJoe

imagemaker46 said:


> This is a straight up question.  All through the forum people are constantly pushing that new photographers must have a licence, get insurance, and follow all the state and provincial laws of the land, talk to lawyers, make it all legal. My feeling is that none of this really necessary or practiced by the majority of people just starting out, or attempting to work as professionals.  If someone is shooting and accepting payment for work, declares it as income, (but pays the year end taxes on that income)  They doesn't collect any taxes for the work, but charge it straight up , a $300 shoot is $300, with no additional tax added.  I know that not collecting the taxes, not being able to right off gear, or office supplies, office space( a room in the house) doesn't get you those little perks to help offset some costs.
> 
> So the question, Is it necessary to be registered as a business to take pictures? Does it really matter for 99% of the starting professionals?



You only need a license if you take money under a business name as opposed to your name. But get the insurance if you get real contracts.


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## The Barbarian

> The fine for fishing with out a license in Maine is $250, the cost of a license is $30.



[machiavelli]So, if you have a one-in-ten chance of getting caught, then the expected payoff for not getting a license is $20.[/machiavelli]


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## KmH

DiskoJoe said:


> You only need a license if you take money under a business name as opposed to your name. But get the insurance if you get real contracts.



That may be true in Houston.
Requirements are local, and vary by city, and town.

If someone gets injured during a shoot, a photographer can be (and have been) sued for liability even if, and/or no written contract was involved.


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