Sales Tax?

[lynweber]

So I am confused a little bit, while I wait to get through to my Dept. of Rev. I have some questions.

Do you collect Sales tax?
Do you have tax exempt number what does that mean exactly?

[lynweber]

So here is what I have found out let me know what you do its helpful!

I need a tax ID for my state in order to collect sales tax on prints only.
This also gives me sales tax exempt for items I purchase for the business.

For Federal
I file a Sch C and take report income and expenses

I get a little fuzy on teh tax exempt thing does that mean I have to pay on the items I purchase a new camera at a later time?

[kirbinster]

I don't know the specifics of your state, but here is some general info. One typically needs to register with the state and perhaps municipality to get a Tas ID certificate. That puts you in their system to collect and pay taxes. What you have to pay tax on is a function of your state. It might be just prints, but it could include sitting fees and other services. A resale certificate enables you to buy things that will be incorporated in your product and not pay tax on those purchases, as you will pay tax when the item is sold. This might include things like frames that you buy and then deliver with a print in them. It would not include things you use in your business -- like your camera.

As for schedule C, that is income tax and the actual form is dependent upon how you file. It is very different if you operate as a sole proprieter versus an LLC or S-corp or C-corp.

[SusanH1970]

A quick google search turned this up. Does this help answer any of your questions?

[lynweber]

I am operating as a Sole P. I checked with my state and since I am using my name i dont need a license or anything like that.

Good point on equipment doesnt count only things I plan to resale. Got it. So that should be easy enough.

So confusing all this stuff!

[bhursey]

Originally Posted by lynweber

I am operating as a Sole P. I checked with my state and since I am using my name i dont need a license or anything like that.

Good point on equipment doesnt count only things I plan to resale. Got it. So that should be easy enough.

So confusing all this stuff!

If your selling prints it is consider tangible goods which means you need to have a business license and have to charge sales tax. In the state of ga you are required to actually have a business licnes the moment you start working for money does not matter if it is services or retail.

Everything goes through zenfolio with me but I still have to charge sales tax. 7% on shipping and and cost. In the state of ga. I went to an accountant to find this out I would suggest finding an accountant that has a free first session and use that. Services where you are charging say a sitting fee those are not tangible goods and you do not need to charge sales tax. However you need to clam it on your income tax.

[kirbinster]

I would highly suggest you operate as an LLC or S-corp. It costs very little to set up either and protects you from liability. Do you really want a client to lay claim to your home when you mess up a wedding shot?

[lynweber]

eventually I will probably do the LLC thing but right now I am so new I do think I will. Doesn't it involve a lot of other complicated stuff? How do you talk to about if you are interested. SBA?

[kirbinster]

You should be able to go to your state's website and get the info to file as an LLC. Just do a google search and you will learn all about it -- better to be safe than sorry.

[Ania Photo]

I do collect sales tax on anything that is not a service. So for wedding photography, on my fee to shoot the event I do not charge sales tax. However, if I sell an album, prints, CD, etc. I have to charge sales tax.

While as I am tax exempt on things I plan to resell (like prints), you can also be tax exempt on supplies you use for your business. So for example, you can go to Walmart or Staples and fill out a tax exempt form and you will get a card or paper that has your tax exempt information on it so you won't pay sales tax on things like office supplies, prints, etc. Please check your local law.

Note, you will have to keep track of when you charge sales tax and how much (I suggest putting the money in another account. It will be due back to the government either quarterly or annually depending on how much you make a year. You will want to talk to the Department of Revenue of your state for more info on this. In your first year you should be annually. Also, work to make enough a year so the government doesn't treat your business like a hobby.

I hope this helps, if you have any other questions or I missed something feel free to let me know.

Stefanie