![]() ![]() There are also a few rogue scenarios where you might want a business license, but it isn’t necessarily required, including: When You’re Selling Art at Craft Shows, Fairs, & Garage SalesĬraft shows, garage sales, and art fairs are hit or miss when it comes to the definitive need for a business license. When Artists MAY NOT Need a Business License Forty-three states - the 45 with sales tax minus Missouri and Florida - enforce this requirement, though the minimum earning threshold ranges from $1 to over $100,000. There’s also an 86% chance (literally) that you’ll need a seller’s permit to sell your artwork online. However, you’ll still need to abide by any local or state laws that require freelance artists to have the proper permits. Online creative platforms like Etsy don’t outright require sellers to have a business license. Generally speaking, a business license is what makes a direct sale “legal.” So if you’re planning to exchange your artwork for money and charging state taxes, you’ll almost always need a business license. More often than not, you will need a business license to sell your creative pieces and turn a profit, including: If You’re Selling Directly to Customers A resale license allows you to buy artwork wholesale and resell it without double-charging on sales tax. The second type is a resale certificate (or a reseller’s certificate). If you sell your artwork in one of the 45 states (plus Washington, D.C.) with a sales tax law on the books, a seller’s permit allows you to collect it legally. Do You Need Another Type of Permit?īeyond your general business license, your local government may also require you to apply for additional licenses and permits. Any artist earning $12,000+ (gross) per year must have a valid business license. Washington State is a great example of this policy in action. ![]() Some states have an income threshold for artists selling their sculptures, paintings, or drawings for profit. states leave licensing regulations to each city or county. ![]() What’s confusing about business licenses is that they aren’t always at the state level like you might expect. Whether you need one could depend on your answers to these questions: Who Requires One? Each jurisdiction has its own rules about which artists need a license and when. If you’re a freelance artist earning a full-time income from selling your art, odds are you will need a business license to operate legally. Need tax help for your small business? Join Selfgood today and financial services will only be the start of the benefits you’ll enjoy. Otherwise, you might be on the receiving end of a federal audit or owe back taxes. Whether you need a city or state business license or not, make sure you file your federal taxes for your artwork sales correctly. But you can claim those losses if you’re in the start-up phase of a legitimate art business. The answer is simple: how the IRS classifies your art career will determine how to file your tax returns.įor example, you can’t report losses as a deduction for an art hobby. If the IRS doesn’t mandate business licenses for artists, why are we still talking about this? (A city, county, or state business license is an entirely different story. But you don’t need any sort of federal license to sell your artwork. So the IRS may consider your art sales a business and has the right to audit you if you’re claiming it’s a hobby. Small Business Administration doesn’t regulate artists under any particular agency. On the other hand, if you paint, sketch, or sculpt because you love creativity and simply sell your art to recoup the cost of supplies, your side gig is more of a hobby.īut unlike agriculture and television broadcasting, the U.S. If you’re selling your crafts regularly and turning a profit, you’re technically operating a business by the IRS’s standards. The IRS draws a fine line between an art “hobby” and an art “business.” In the eyes of the IRS, it depends on: Is It a Hobby or a Business? But like anything Internal Revenue Service-related, it’s not as simple as a flat “yes” or “no.” The short answer is “yes,” you do need a business license to legally sell your work as an artist. Learn more about whether you need a business license to sell your art, what types of licenses make the most sense, how to sell your art to the letter of the law, and how becoming a “business” impacts your taxes. Unfortunately, it’s not a simple yes or no answer. Such a big decision comes with plenty of unanswered questions, one of which paves the path to becoming a functional legal business:ĭo you need a business license for artists? Then, the business side creeps in such as business license for artists requirements. Turning your creative hobby as an artist into a full-time, lifestyle-supporting career is a huge and exciting step. ![]()
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