Is it necessary to really have a business licence?

imagemaker46

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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?
 
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.
 
Canada may be radically different than the USA on this front.
 
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.
 
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.
 
I know it's not difficult to register a business, but how many people really do? My guess is that in photography, very few.
 
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.
 
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. :D
 
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.
 
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...
 
The fine for fishing with out a license in Maine is $250, the cost of a license is $30.
 
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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