I know that businesses that sell physical goods and collect sales tax require a business license, but why do we as affiliate marketers need a business license?
I'm in Michigan and run my photography business out of my house. I have no business license. If I sold products, I would have to have a sales tax license. And in Michigan if people aren't coming to your house for the business (no employees, no customers), you probably don't need a license. My business is incorporated and I use a mailbox for mail. Check with an attorney, accountant, city/township/county and/or the chamber of commerce.
Submitted by Jeremy Palmer on Sun, 05/11/2008 - 17:06.
It probably varies by state... Check with your local gov't (municipality) to find out your requirements. I know it's an absolute requirement in UT, regardless of the nature of your business.
Submitted by BradleyD.Haslam on Sun, 05/11/2008 - 20:35.
Is it?
I live in Utah as you know Jeremy.
And I've been told by friends that work for the irs,
not to worry about it until I'm making at least
a few hundred a month on a steady basis.
That I can claim it on my personal taxes.
Kinda like an ebayer would I suppose.
Is this wrong?
Is this something I should look into further?
Because the cost of an LLC is one thing,
but further, filing quarterly sounds like a pain. LOL!
Submitted by BradleyD.Haslam on Sun, 05/11/2008 - 22:23.
ps.
"sole proprietor" is what I have filed in the past.
Kinda like a 1099, self employment thing.
I guess my question is about Utah spacifically.
And what you meant by "it's an absolute requirement in UT"
Thanks!
Submitted by kuproverto on Sun, 05/11/2008 - 23:34.
"I know that businesses that sell physical goods and collect sales tax require a business license, but why do we as affiliate marketers need a business license?"
Short answer: So you can be taxed.
Slightly longer answer: Here in SD I know several people who run small businesses who don't have business licenses. They should as it's required by law but they figure, since they don't earn very much, it doesn't matter. In most cases, both the cost and annual paperwork involved in registering is minimal so I'd say better be safe than sorry.
Sure, if you are required to pay sales tax (at least here in California). You do need a business license to buy goods at wholesale, but you would still be liable for the sales tax which you would collect from your own customers (when selling at retail).
Affiliate marketers aren't required to collect nor pay sales tax...in fact, we have nothing to do with the actual sales transaction at all, which is why I'm wondering why we'd need a license.
Submitted by kuproverto on Mon, 05/12/2008 - 07:58.
It may be the case in your state, as it is in mine, that the business regulation people don't really understand what affiliate marketing is so have no idea whether a license is required or not.
I remember I was asked a series of questions aimed at offline businesses and the woman asking was most perplexed when I told her I'd have no customers, no stock and I wouldn't be selling anything.
One of the reason SD businesses have to have a license is so they can declare items for the 'use' tax. If you buy something out of state and use it in your business in state it's taxable. There is no corporate income tax here so other methods have to be employed to tax businesses instead.
Submitted by Debbie (not verified) on Tue, 05/13/2008 - 14:16.
I recently came upon a website that enables you to obtain online every city, county, and state business license all over the U.S.! Their website is www.businesslicenses.com or as they advertise Get Every Business License Online 800-679-3611 from a California Business License to a Florida Occupational License or a Washington state Business License and all other states in-between.
Enjoy and Good luck!
One thing I didn't mention is that you should always file a DBA (doing business as) if you're not an LLC or a corporation. In Michigan, you do this with the county.
chopper
I've registered DBAs..."Doing Business As" and then the name of your business, to give me some more name recognization /freedom with the merchants. It's about $25 at your local county office to register a DBA. It's like sole proprioter but you can at least set up a bank account with your DBA so merchants can use your DBA instead of your name on checks. So I have a checking acount with my DBA...but the bank knows it is still my account because it has my name attached to it.
Having a business license lets you do business legally in the municipality in which you live/work. You also need the business license so they can collect personal property taxes on equipment/furniture fixtures that you use in your business. If you don't pay personal property taxes you can be subject to a property tax audit and they will make you pay penalties and interest. At least this is how it works in Utah. I don't know how it works any place else. Check with you local city.
You may not
I'm in Michigan and run my photography business out of my house. I have no business license. If I sold products, I would have to have a sales tax license. And in Michigan if people aren't coming to your house for the business (no employees, no customers), you probably don't need a license. My business is incorporated and I use a mailbox for mail. Check with an attorney, accountant, city/township/county and/or the chamber of commerce.
It probably varies by
It probably varies by state... Check with your local gov't (municipality) to find out your requirements. I know it's an absolute requirement in UT, regardless of the nature of your business.
Is it? I live in Utah as you
Is it?
I live in Utah as you know Jeremy.
And I've been told by friends that work for the irs,
not to worry about it until I'm making at least
a few hundred a month on a steady basis.
That I can claim it on my personal taxes.
Kinda like an ebayer would I suppose.
Is this wrong?
Is this something I should look into further?
Because the cost of an LLC is one thing,
but further, filing quarterly sounds like a pain. LOL!
Am I taking a risk by not doing it now?
Brad.
I'm just referring to the
I'm just referring to the biz license. Not the business formation. You can still be a sole proprietor and have a biz license.
ps. "sole proprietor" is
ps.
"sole proprietor" is what I have filed in the past.
Kinda like a 1099, self employment thing.
I guess my question is about Utah spacifically.
And what you meant by "it's an absolute requirement in UT"
Thanks!
The Tax Man!
"I know that businesses that sell physical goods and collect sales tax require a business license, but why do we as affiliate marketers need a business license?"
Short answer: So you can be taxed.
Slightly longer answer: Here in SD I know several people who run small businesses who don't have business licenses. They should as it's required by law but they figure, since they don't earn very much, it doesn't matter. In most cases, both the cost and annual paperwork involved in registering is minimal so I'd say better be safe than sorry.
"Short answer: So you can be
"Short answer: So you can be taxed."
Sure, if you are required to pay sales tax (at least here in California). You do need a business license to buy goods at wholesale, but you would still be liable for the sales tax which you would collect from your own customers (when selling at retail).
Affiliate marketers aren't required to collect nor pay sales tax...in fact, we have nothing to do with the actual sales transaction at all, which is why I'm wondering why we'd need a license.
It may be the case in your
It may be the case in your state, as it is in mine, that the business regulation people don't really understand what affiliate marketing is so have no idea whether a license is required or not.
I remember I was asked a series of questions aimed at offline businesses and the woman asking was most perplexed when I told her I'd have no customers, no stock and I wouldn't be selling anything.
One of the reason SD businesses have to have a license is so they can declare items for the 'use' tax. If you buy something out of state and use it in your business in state it's taxable. There is no corporate income tax here so other methods have to be employed to tax businesses instead.
I recently came upon a
I recently came upon a website that enables you to obtain online every city, county, and state business license all over the U.S.! Their website is www.businesslicenses.com or as they advertise Get Every Business License Online 800-679-3611 from a California Business License to a Florida Occupational License or a Washington state Business License and all other states in-between.
Enjoy and Good luck!
DBA
One thing I didn't mention is that you should always file a DBA (doing business as) if you're not an LLC or a corporation. In Michigan, you do this with the county.
chopper
Oops
I've been in business nearly 10 years & have never had one. I guess it's time to figure out if I need it or not.
"Short answer: So you can be taxed."
I've been fully taxed since day 1, unfortunately!
DBA is an easy way to get into it...
I've registered DBAs..."Doing Business As" and then the name of your business, to give me some more name recognization /freedom with the merchants. It's about $25 at your local county office to register a DBA. It's like sole proprioter but you can at least set up a bank account with your DBA so merchants can use your DBA instead of your name on checks. So I have a checking acount with my DBA...but the bank knows it is still my account because it has my name attached to it.
Business License
Having a business license lets you do business legally in the municipality in which you live/work. You also need the business license so they can collect personal property taxes on equipment/furniture fixtures that you use in your business. If you don't pay personal property taxes you can be subject to a property tax audit and they will make you pay penalties and interest. At least this is how it works in Utah. I don't know how it works any place else. Check with you local city.
Best,
Jon