How many of you that sell your turnings have a business license?

[Toney Robertson]

I went to a Zoning Variance board meeting tonight to get a variance so that I could add on to my shop. The rules here are that the building needs to be 50 feet off the road even though this particular road is along the back of the property. But since it is a road, the regulations say that it is subject to the 50 rule. My shop is 60' off the road and I wanted to add on 30 feet.

The neighbor ACROSS the road came to the meeting and complained saying the addition would impact him and his family negatively because of additional noise and affect his property value and that I was running a business. The board asked me if I sell and I said sure. WELL that means it is a business to them. Even though I have not even come CLOSE to covering the cost of my tools, it seems that if you sell something for a penny you are running a business. What a bunch of Baloney.

Now that the county is aware of my "business", I am SURE that I will have to jump through some bureaucratic hoops or close my shop. I guess I should have but I sure did not see that coming.

So, if you sell ANYTHING for any amount, do you have a business license?

Of course, as soon as I get a business license, my homeowners will no longer cover my tools in case of a loss. MORE money spent.

Upset in Indiana.

Toney

[Brian Greb]

As someone once said "sucks to be you".
As someone else once said "choose your words wisely,chances are someone is listing."

Bad stroke of luck with that whole variance thing. As for a business licence... as a seller it is a good idea to have a DBA, but it is not a necessity. (I am not a lawyer and do not pretend to be one, The previous statement is an opinion and should be taken as such)

For the record I have a DBA.

Back to your shop though have you entertained the idea of a second story?

[Matt Hutchinson]

From my understanding the "is it really a business" question is answered differently depending on where you live.

Right now I only have an LLC and state tax license. However, now that I am actually trying to sell my stuff I really need to get the low down as to how I need to be handling licensing, insurance, etc....

Sorry to hear of your troubles. :(

Hutch

[Thom Sturgill]

AAW had an article a while back about insurance and shops. Several states say that if you sell ANYTHING you are considered a business and home owners insurance does not cover the shop, or anyone in it. Also you may have to pay commercial power rates, etc.
I have not sold anything, and am not sure I plan on doing so for that reason.

[Toney Robertson]

As someone once said "sucks to be you".
As someone else once said "choose your words wisely,chances are someone is listing."

Bad stroke of luck with that whole variance thing. As for a business licence... as a seller it is a good idea to have a DBA, but it is not a necessity. (I am not a lawyer and do not pretend to be one, The previous statement is an opinion and should be taken as such)

For the record I have a DBA.

Back to your shop though have you entertained the idea of a second story?

I have a business license that I use to collect sales tax when necessary but it is not for my shop location. I guess I will have to get a home business license.

Can't do a second story since our esteemed government has determined that the top of the peak can only be 16 feet.

Toney

[Toney Robertson]

AAW had an article a while back about insurance and shops. Several states say that if you sell ANYTHING you are considered a business and home owners insurance does not cover the shop, or anyone in it. Also you may have to pay commercial power rates, etc.
I have not sold anything, and am not sure I plan on doing so for that reason.

Well, evidently I live in one of those states, which is unfortunate. It is no wonder why small businesses either never get off the ground or can not make it. I have almost $400.00 invested and I have not turned a shovel or have a building permit, let alone build the building.

Toney

[Allen Neighbors]

Seems to me that the laws you have to worry about are those of the state of Indiana, and the city you live in.
I sell my craft items all the time. I do not have a business license or a business, and I do not advertise. And I am legal. It depends on the State Laws and the City ordinances where you live, Toney.

[John Keeton]

Toney, as Hutch said, all of this will depend on your state laws, and getting the advice of an attorney in your area would be money well spent.
Of course, as soon as I get a business license, my homeowners will no longer cover my tools in case of a loss. MORE money spent.

Upset in Indiana.

Toney


AAW had an article a while back about insurance and shops. Several states say that if you sell ANYTHING you are considered a business and home owners insurance does not cover the shop, or anyone in it.As to the topic of homeowners, in KY, if I sell anything produced in my shop, then I have no coverage for my tools, nor my shop building. Recently, I was juried in the local guild, and I wanted to place several pieces in the gallery for exhibit, and hopefully for sale.

My homeowners and farmowners coverage is thru KY Farm Bureau, and like all other companies writing similar coverage in KY, they would not write a rider to my policy.

My only option was to purchase a commercial policy at an annual NET cost of about $500, after the refund for removing my building from the farmowner policy, and a downward adjustment when they inspected my shop. The gross premium is nearly $700. That is a pittance compared to the commercial policy for the sporting goods store we used to own. That premium was nearly $8,000/yr.

I have yet to sell anything, but I am pursuing that with other plans, so I am hopeful that this will pan out in the future. In the meantime, looks like a nice Schedule C loss for 2010!!:(:rolleyes:

Toney, welcome to the world of business!!

[Baxter Smith]

As to the topic of homeowners, in KY, if I sell anything produced in my shop, then I have no coverage for my tools, nor my shop building.

Hmm?? Never even considered it. Built some cabinets for a friend last fall. Guess I had better ask about the laws in Delaware.

[Michael James]

I have a small business that I advertise in a national magazine, and pay for the PO, web site, tax, quarterly taxes, etc. Long story short, I get digital audio recording equip at a discount - and I work very hard at losing money. I go by the rules and cut corners where I can legally. I do not want to be red flagged with the IRS or the local govt' "help"

I firmly believe where there is a will there is a way. If you're looking at a commercial venture in a residential zone, you're going to have problems pretty much whereever you go. Whether it is having clients come to your home to do therapy (scary thought, but done) or crank up a crew of powertools at 7 a.m. Im not an attorney. I say do the cost / benefit analysis, make a decision and pay the price for that choice.
Doubt if I added anything to the mix, but hey.... coffee is coffee. :)

[Toney Robertson]

I have a small business that I advertise in a national magazine, and pay for the PO, web site, tax, quarterly taxes, etc. Long story short, I get digital audio recording equip at a discount - and I work very hard at losing money. I go by the rules and cut corners where I can legally. I do not want to be red flagged with the IRS or the local govt' "help"

I firmly believe where there is a will there is a way. If you're looking at a commercial venture in a residential zone, you're going to have problems pretty much whereever you go. Whether it is having clients come to your home to do therapy (scary thought, but done) or crank up a crew of powertools at 7 a.m. Im not an attorney. I say do the cost / benefit analysis, make a decision and pay the price for that choice.
Doubt if I added anything to the mix, but hey.... coffee is coffee. :)

Yes, a small business is EXTREMELY hard to make work and if amazes me that government always talks about how small business if the key to the economy but they never get off our backs.

It is not zoned residential, it is agriculture. It is a three acre plot. It is a one man shop and I almost never use a loud power tool (planer, saw) at 7. I might be at the lathe but there is NO WAY this dirt bag can hear that through two doors and with his house at least 75 yards away.

The shop is the shop that my Dad built when I was a kid and it is nice that I can go the 4 blocks or so and be at my shop. Another added benefit is that I can check on my 92 year old Mother on virtually a daily basis and she can come out to the shop if she needs help with something.

It would be different if I was actually making money but I have not even covered the cost of my tools yet. It is a hobby shop where I have sold some pieces. Get out of my way government.

Thanks for the thoughts.

Toney

[Thom Sturgill]

While they talk about small business being 'the key to the economy' they are
NOT talking about hobby shops. They are talking about JOBS being created. Hobbyists are generally viewed as an annoyance. Partly because the established small businesses do not want the competition (cabinet shops, for example).

Never mind that some hobbyists will discover that there is a niche they can fill and will expand into a true business/employer.

The federal tax laws are different in that if the income is below a certain threshold, its just included as part of your income unless you are declaring a loss. Local governments want their filing fees, and have zoning issues and code enforcement issues to handle as they affect the neighbors. Artists painting in a 'studio' room in their own house can have the same problems when they are selling.

I was surprised to find that NC (where the family is from, and where I plan on retiring to in a few years) is one of the worst for hobbyists. In addition to insurance issues, they tax your machines and supplies.

[Jeff Nicol]

Here are some links on Hobbyist rules for the IRS. It is always a bummer when the government wants the little guy to take it in the shorts to make little to nothing from their hobby. I know people who have small operations in their homes like, taxidermy, sewing and garment repair, consulting on the computer, photography, and many artists in different medias. The insurance thing is a big problem as most companies won't cover whatever is used in the business will not be covered under the homeowners policy. I think it was mentioned that the AAW offers a policy for woodturners so maybe that is the way to go, I have not looked into it yet but I may do it soon.


http://artsandcrafts.about.com/od/taxes/a/hobbylosses.htm

http://www.ehow.com/how_5939326_make-hobby-tax-deduction.html


With the way our government wastes money it sometimes feels like we should not give them a thing, but if you work it out most years the tax is very small.

The good thing about having a tax# is that most suppliers will charge you no tax on goods that will be used in the business or for resale. So you come out a bit ahead there.

Good luck with it all,

Jeff

[Ronald Fox]

I am considering selling some of my pens and bowls at a farmer's market. My wife is also planning on selling some quilts and stuff she has crocheted. Most woodworking has to be done where the tools are, but crocheting can be done any where you can take the thread and crochet hook.

So what constitutes a business? Simply making something that you sell? Or does the building (and tools) you work out of play into the equation?

This is a very interesting thead and I am watching it with interest ;)

Ron

[Wayne Lovell]

Come to rural Texas, the last place I lived and where I live now you can build what you want and wire it the way you want to.

[Ken Fitzgerald]

Folks,

I have sold two commissioned pens and a few bottlestoppers. One of the reasons I haven't tried to sell more is because of exactly what Toney encountered here.

I turn and work wood for pleasure.

The State of Idaho, the U.S. Government and it's elected officials have determined what is considered a business. I would have to consult possibly with an attorney and certainly with an accountant to decide IF I wanted to go into business and how to function LEGALLY.

I have several 10's of thousands of dollars invested in my shop and tools and I am not finished yet. As much as I would love to generate income and offset my expenses, I don't know that I want to run a business.

I will be retiring shortly so my income will decrease somewhat.

I turn and work wood for pleasure. I am not sure but doing it for profit might take away some of the pleasure. I will be making some decisions following some legal and business counseling and inquiries. What ever I decide, it will be legal and above board.

I am too damned old to go to prison for something like unpaid taxes.

[Mike Minto]

"The law, in it's magnanimous equality, forbids both the rich and the poor from stealing bread and sleeping under bridges" (I forget who said that). You just gotta love it.

[John Keeton]

I am too damned old to go to prison for something like unpaid taxes.Well, that begs the question - what would you go to prison for, Ken?!?!:D:D:D Don't answer that!! At least, not on here!

[Ken Fitzgerald]

John,

You and I are both close in age......there is very little for which I'd go to prison.

[Robert McGowen]

.....because of additional noise and affect his property value and that I was running a business. The board asked me if I sell and I said sure. WELL that means it is a business to them. Even though I have not even come CLOSE to covering the cost of my tools, it seems that if you sell something for a penny you are running a business.

Of course, as soon as I get a business license, my homeowners will no longer cover my tools in case of a loss. MORE money spent.

I might be at the lathe but there is NO WAY this dirt bag can hear that through two doors and with his house at least 75 yards away.

I guess that I will be the "Bad Guy" in this thread, but I do not see what the issue is. You are running a business based on your many threads and posts. As such, you should have been writing off your tools, your supplies, your insurance, your utilities, etc. the entire time. There is more than one way to come out ahead when running a business. NOT paying taxes on income because you lost money on your major lathe purchase is one of them. I have more than one big ticket item that was purchased the last week of December.

If you were expecting the insurance company to just hand over $10,000+ for tools when you have a fire or theft and think that they would never ask if you were a business is just not realistic. I do not see how they would ever pay the claim.

Also, if you google "Toney Robertson Indiana", which is all the information that I have about you, you get tons of information. Some of this is information in Sawmill Creek posts. I would hope that the "dirt bag" across the street, your insurance company, or a zoning board member is unable to run a computer, because you could have a bigger fight on your hands than you planned for.

Just get it all set straight and sleep peacefully at night. (Please send hate mail to my personal e-mail account! Thanks! :D)

[Ken Fitzgerald]

I guess that I will be the "Bad Guy" in this thread, but I do not see what the issue is. You are running a business based on your many threads and posts. As such, you should have been writing off your tools, your supplies, your insurance, your utilities, etc. the entire time. There is more than one way to come out ahead when running a business. NOT paying taxes on income because you lost money on your major lathe purchase is one of them. I have more than one big ticket item that was purchased the last week of December.

If you were expecting the insurance company to just hand over $10,000+ for tools when you have a fire or theft and think that they would never ask if you were a business is just not realistic. I do not see how they would ever pay the claim.

Also, if you google "Toney Robertson Indiana", which is all the information that I have about you, you get tons of information. Some of this is information in Sawmill Creek posts. I would hope that the "dirt bag" across the street, your insurance company, or a zoning board member is unable to run a computer, because you could have a bigger fight on your hands than you planned for.

Just get it all set straight and sleep peacefully at night. (Please send hate mail to my personal e-mail account! Thanks! :D)

Spoken like a dew-rag wearing, ear-ringed retired officer of the law who rides a motorcycle with his beautiful wife in the great State of Texas!:rolleyes:

[Sean Hughto]

I can understand your frustration. I can also understand why states have laws like this. Put yourself in the position of the small business owner who has paid all the costs associated with running a business from paying for a business license to paying proper business taxes to complying with business zonsing restrictions and on and on. You might be kind of miffed if some person down the stree hung out the hobbiest shingle, thereby avoiding all these costs and investments, and undercut your prices. You'd want a level playing field. Just like you might legitimately resent businesses that use illegal immigrant labor to save costs or don't bother to pay the insurance to be bonded, etc. Now it might seem silly when taken to the extreme of a hobbiest who makes one table for a friend or sells 20 bottle stoppers and pens a month, but the State is in the position of needing to draw bright lines that everyone can understand. The State does not have the resources to make judgment calls about when a particular hobbiest in a particular hobby has crossed the line, so they might choose to just make it hard and fast - sell stuff commercially, and you need to take what comes with that.

I'm not arguing one way or the other, just sort of thinking out loud and trying to imagine teh other side.

Good luck to you. I hope you can work it out.

[David Cramer]

I lost my long reply and I don't know why, but before I tried again, I read Mr. McGowen's response and that is pretty much what I had with a little more added on.

Ken you may disagree, but if I were Toney I would say nothing about sellling anything, it's simply a storage building and nothing more. I would go back to the board and tell them you've decided to sell nothing and again are using it for storage.

If that is your real name, I would be careful on what I put on the world wide web. An inspector got a neighbor a couple streets over a year or so ago for no permit on a deck or rail because he posted it on Facebook or MySpace with pictures.....not very wise. The woods that surrounded the back and sides of his house didn't help him too much after he posted that picture for the world to see. Inspectors will simply do what Mr. McGowen did and search your name on the internet.

If you have a website you only put your first name and a cell phone number that is set up as a personal one and that you list as the "number to reach you at" on your website, if you have one.

When you sell something, you either mail it with a P.O. box as your address or "insist" on delivering only for local and semi-local clients. You are selling them a product, not a look at your shop and tools.

The bottom line is are you disturbing anyone or breaking any major rules that can be traced back to you? Going to prison for selling some pens or bowls.............not likely. A fine? Anything is possible but they have to prove your income or prove the income that you claim is wrong.

Again, please be careful as to what you put on the net and I hope you can make it work. There's no noise problems or traffic problems and they are still complaining, give me a break. Some neighbors!

David

[David Cramer]

Also, someone mentioned something about a cabinet shop not liking a hobbiest being there competition.

Well, I can tell you that cabinet shops work on volume, as in subdivisions and commercial work, not simple remods here and there. A real cabinet shop can't survive off of that and that's why a lot of them have closed up. It's not the hobbiest working out of his garage/workshop that has caused this, it's the economy and nothing else.

Most guys that do hobbiest trades don't hang a sign out for all to see, they work by word of mouth and may or may not be in the phonebook. I know several painters, drywallers, and cabinet guys that do well by just word of mouth and I say good for them. Who are they hurting? Their craftsmanship and pride in their work is what has sustained them. If they weren't any good, word of mouth would be their worst enemy....aka they'd get no work.

Even though I don't agree, Sean raises some good points. Trust me, I've been on both sides of the coin and yes, even unemployeed. Big shops that have employees and work are not affected by the hobbiest. You can't get every job and in normal economic times, you don't have too.

The shops operate 5-6 days a week and things keep on rolling......in "normal economic times". Now, they've closed up, but it's not the guy making a set of kitchen cabinets once every month (at most) that has caused it. I see Sean's point about a small business not likely someone not having to pay this and that, but the hobbiest doesn't get the write-offs either and if their shop burns down, sadly in most cases, it's oh well. There are pros and cons to both sides of it, but the little guy barely if all affects the big guy's bottom line and I know this for a fact.

Do what you will Toney, but I don't think you're doing anything wrong and I would go back and say I have decided to sell nothing, but that's me.

David

[Ken Fitzgerald]

David,

I would get legal.

That's the way I operate.

You or others may find me boring.

I live under the principle that I will do everything legally. If I don't like a law I will try to change it or learn to live with it or go somewhere where that law isn't a law or doesn't apply.

When I go to sleep at night, my conscience doesn't bother me and I don't worry about the police coming through the door.

Besides, my oldest son is a deputy sheriff locally and works at the county jail. He'd enjoy too much Dad being placed in his motel. Actually I believe he'd be embarrassed.

[David Cramer]

Ken, it was nothing personal I assure you. I have relatives in law as well but our difference is a simple one.

What you see as criminal, I don't.

Making and selling something from your workshop, to me, is not criminal nor would I worry about the police. You may be right, but it's just something I wouldn't worry about. Believe it or not, I go to church once a week with my family, but I don't see how it is a bad thing to make a little money on something you've produced in your shop to help your family. I am not trying to rationalize it, seriously I'm not. One could compare this to that and say it's not like you're a murderer or anything. I am simply saying there was a time when doing it was no big deal and then one day "the man" stepped in and said I'm taking from you and I'm also gonna make it real hard on you in the process. Simply put, I don't agree with it.

Respectfully,

David

[John Keeton]

Again, please be careful as to what you put on the net and I hope you can make it work.David, sage advise, but you may want to reflect on that advise when posting!;)

[Mike Minto]

David,

I would get legal.

That's the way I operate.

You or others may find me boring.

I live under the principle that I will do everything legally. If I don't like a law I will try to change it or learn to live with it or go somewhere where that law isn't a law or doesn't apply.

When I go to sleep at night, my conscience doesn't bother me and I don't worry about the police coming through the door.

Besides, my oldest son is a deputy sheriff locally and works at the county jail. He'd enjoy too much Dad being placed in his motel. Actually I believe he'd be embarrassed.

If the 'lawmakers' were only as law-abiding as the average, hard working citizen, I'd feel more like you, Ken. (not that I base my actions on anyone else's - it's just a statement). :)

[David Cramer]

David, sage advise, but you may want to reflect on that advise when posting!;)


:)Thanks John, but I've got it covered:).

aka......I wasn't born yesterday and am quite educated in the trades and policies that bind them, more than I care to share on the net. But you can email me at david33cramer@gmail.com and with you and your willingness to share so much on this forum, I'll share what I know as well, although you probably already know more;). Good Day.

David

[Sean Hughto]

I dunno, Dave, sounds like some serious rationalizing to me. How about moonshining, if someone "makes a little money on some" whiskey "they've produced" in the woods "to help their family," would that be okay too? I understand the moonshiner's resentment of the whiskey taxes, and might even side with 'em in that argument, but I would also recognize that as a society, we have laws. One might rationalize that a certain law is unreasonable or wrongheaded, but that doesn't mean you have a right to break it, or to complain about the consequences when you do. If I think a posted speed limit is too slow and decide I'm going to go 10 miles an hour over it because I think that speed is still safe, I'm taking my chances and won't be surprised or outraged when the nice officer hands me a ticket.

[Ken Fitzgerald]

David,

Selectively ignoring laws.......well isn't that what criminals do?

Hey....so what if you paid for that car....I need one...I'll just overlook the fact it's not mine and I'm just borrowing it for a wild 8 state joy ride.

All members of society selectively ignoring laws could be the downfall of our society and it is very important.

If you don't like a law, change it ...or learn to live with it.

[Mike Minto]

The law is NOT morality; it a whim; subject to change with the stroke of a pen, a change in the zeitgeist, or a simple majority in a court - back and forth, back and forth, again. (i know this is getting a little off-topic, but others here have, too - see above).

[David Cramer]

David,

Selectively ignoring laws.......well isn't that what criminals do?

Hey....so what if you paid for that car....I need one...I'll just overlook the fact it's not mine and I'm just borrowing it for a wild 8 state joy ride.

All members of society selectively ignoring laws could be the downfall of our society and it is very important.

If you don't like a law, change it ...or learn to live with it.

My last reply on this one. Sorry Ken, you are not comparing apples to apples or even close. If you take a pen from work, is that stealing? Absolutely! Is it the same as stealing a car? Um...no Ken, it's not.




Sean, again apples to apples friend and I'm with ya. Toney make a pen and sells it and doesn't claim it and you have now compared it to moonshining? I think you are "flip" rationalizing it and yes, I'm serious.

So if you know Toney and you stop by his shop and he has a bowl to sell you and you're a friend, but also a police officer, off duty mind you, are you going to tell him to claim it or say you want no part of it? Now if you stop by and he's selling you moonshine, I'd say more friends, cops or not, would want no part of it. So who was rationalizing, me or you? Apples to apples friend or it's not a fair discussion.

So long, out to work and feel free to email if you'd like. I am not responding this again because I feel an attack coming for difference of opinion. Have a good day.

David

p.s. A bowl or pen, versus moonshining, seriously?

[Sean Hughto]

So because the laws have changed in the past and might change again, we need not obey the laws in force at any given time? Or is it that because the laws have changed and might change again, no law is valid? Laws, like the society that produces them, evolve. Hoepfully they evolve to yield fairness and justice as appropriate to given era and the cultural values of that time. In a democracy, laws are not imposed upon us, we vote for representatives that make the laws to express our collective will. "We the people ..." The government (the lawmakers) is US.

Many laws are indeed our collective expressions of moral judgments. Thou shalt not kill is is found in the Bible and the penal code, for example.

[Ken Fitzgerald]

David,

I am serious.

Selectively ignoring laws is what criminals do. I am not being flip.

If you knowingly ignore a law you are performing a criminal act.

I would also suggest that it is not wise to advise someone to do that.

[Sean Hughto]

My point is that it is a slippery slope once you start to decide what laws are okay to break. We all break laws (anyone here who has not exceeded the speed limit in their driving career?). You just want to rationalize that some are more okay to break than others.

[Mike Minto]

So because the laws have changed in the past and might change again, we need not obey the laws in force at any given time? Or is it that because the laws have changed and might change again, no law is valid? Laws, like the society that produces them, evolve. Hoepfully they evolve to yield fairness and justice as appropriate to given era and the cultural values of that time. In a democracy, laws are not imposed upon us, we vote for representatives that make the laws to express our collective will. "We the people ..." The government (the lawmakers) is US.

Many laws are indeed our collective expressions of moral judgments. Thou shalt not kill is is found in the Bible and the penal code, for example.

Sean, I follow my moral compass more that any 'legal' framework I'm told I have to live within. And, yes, "many" laws are moral. Some are just stupid.

[Dick Strauss]

Toney,
I'm sorry that you don't have like-minded neighbors.

You may get to write off improvements to that building and all of the state/local taxes associated with the whole building as long as it is used for your business. You can also write off the utility use for it as well. Add in the tools depreciation, cost of supplies and who knows. You may find that once all of the legal write-offs are factored in, you might be able to temporarily offset some of your normal income with losses on your business (IIRC the IRS used to say that you had to make money in 2 of the first 5 years of the business operations, otherwise your returns were sure to get red-flagged).

FYI-I'm not an accountant or lawyer. You should consult a professional for your particular situation!

Take care,
Dick

[Alan Zenreich]

"If you knowingly ignore a law you are performing a criminal act."

Violations of the law can be criminal (offenses against the public or the state), or civil (between people, e.g., breach of contract).

Also, it's not ignoring a law that gets one into trouble, it's violation of the law (knowingly or unknowingly) that is punishable.

Just trying to be clear...

[Rob Wachala Jr]

Well I was thinking of moving to Indiana to be rid of these insane Illinois taxes but now I'm not to sure lol.

[Ken Fitzgerald]

"If you knowingly ignore a law you are performing a criminal act."

Violations of the law can be criminal (offenses against the public or the state), or civil (between people, e.g., breach of contract).

Also, it's not ignoring a law that gets one into trouble, it's violation of the law (knowingly or unknowingly) that is punishable.

Just trying to be clear...

Thanks for correcting my statement.

Criminals violate laws.

[Alan Zenreich]

About selectively ignoring laws...

Many folk buy items where the seller doesn't collect sales tax (out of state, private seller, etc).

I can only assume that all the buyers are submitting the appropriate sales/use tax to their local governments after they receive the items.

Or are these folk choosing to ignore their tax obligations, and potentially breaking any number of (possibly criminal) laws?

[Toney Robertson]

I am considering selling some of my pens and bowls at a farmer's market. My wife is also planning on selling some quilts and stuff she has crocheted. Most woodworking has to be done where the tools are, but crocheting can be done any where you can take the thread and crochet hook.

So what constitutes a business? Simply making something that you sell? Or does the building (and tools) you work out of play into the equation?

This is a very interesting thead and I am watching it with interest ;)

Ron

Ron,

Well, here in good ole Indiana, if you sell ANYTHING out of your home then it is considered to be a business. I asked the lady at the county this morning about what if one has chickens and sells the eggs. Yep, that is a business and must go before the zoning board for a variance for a home business. What a bunch of bull.

So, check your state and local governments.

Toney

[Thom Sturgill]

"The law, in it's magnanimous equality, forbids both the rich and the poor from stealing bread and sleeping under bridges" (I forget who said that). You just gotta love it.
I googled it - it was credited to Victor Hugo.

[Jeff Nicol]

Toney, I know that most states have a minimum or maximum amount of money you can make from certatain areas or individuals. I used to do some painting and simple repairs for a restaraunt and we allways made sure that when I reached the $2000 mark for the year I was done. He did not have to say what the money went to and just came out of petty cash. Also if you make things for other shops and they pay all the taxes on it no W-4 or 1099 is filled out or sent out as you are not working for them just one of the vendors they use to get their product from. As long as the amounts don't reach large amounts, say $5000 or more the business takes the hit and the tax is paid. This is how a hobbyist can provide small amounts of product, but the income tax portion is your responsibility. If you say you made $3500 you can't show a loss as a hobbyist, so your expenses (tools, material, whatever) can't be more than what you made. You can make nothing, but should show some sort of positive income every few years. If you are the soul proprietor then whatever you pay yourself is just part of doing business and it is not considered income until you show a profit as it all part of the business working.

So what really is the problem is that your neighbors are jealous of you and think that it is unfair that you want to do something they cannot. It may be easier to find a small shop to lease with another person or persons and save the money of adding onto the shop and put it towards the rent. The insurance for the home shop is a bugger and is always the problem, but like John and Ken say, when you have $1000's tied up in tools it is cheaper in the long run to pay the piper and save your butt if anything should happen to the shop. It always comes down to the fact that the government, insurance companies, and neighbors are looking out for themselves and not us!

Get a tax# and see what all the stipulations are in your town and make the decision from there. No matter what happens you can't please everyone and you are the only one who can keep you safe.


Good luck,

Jeff

[Cathy Schaewe]

I think this thread is best read after reading the thread entitled "location, location, location" .....;)

[Robert McGowen]

........... if I were Toney I would say nothing about sellling anything, it's simply a storage building and nothing more. I would go back to the board and tell them you've decided to sell nothing and again are using it for storage.

When you sell something, you either mail it with a P.O. box as your address or "insist" on delivering only for local and semi-local clients.

The bottom line is are you disturbing anyone or breaking any major rules that can be traced back to you?


First paragraph .... LIE
Second paragraph .... CHEAT
Third paragraph .... DON'T GET CAUGHT

If you are going to do all of this, it would be much more lucrative to be a bank robber instead of a woodturner. :rolleyes:

[Robert McGowen]

Spoken like a dew-rag wearing, ear-ringed retired officer of the law who rides a motorcycle with his beautiful wife in the great State of Texas!:rolleyes:

That is a total misrepresentation. The wife hardly rides at all!

[Steven DeMars]

Don't you guys know that a small business is not allowed to lie, cheat or steal. You have to wait until you are a large corporation, that way when you get caught the government can bail you out.

[Wally Dickerman]

When I lived up in Puget Sound country I had a business license. I was turning and selling a heck of a lot more than I am now.

My business license had a plus side though. It allowed me to buy supplies in Wash. State without paying sales tax, and I was able to buy some things through wholesalers. Saved quite a bit of money that way.

Wally

[Toney Robertson]

I guess that I will be the "Bad Guy" in this thread, but I do not see what the issue is. You are running a business based on your many threads and posts. As such, you should have been writing off your tools, your supplies, your insurance, your utilities, etc. the entire time. There is more than one way to come out ahead when running a business. NOT paying taxes on income because you lost money on your major lathe purchase is one of them. I have more than one big ticket item that was purchased the last week of December.

If you were expecting the insurance company to just hand over $10,000+ for tools when you have a fire or theft and think that they would never ask if you were a business is just not realistic. I do not see how they would ever pay the claim.

Also, if you google "Toney Robertson Indiana", which is all the information that I have about you, you get tons of information. Some of this is information in Sawmill Creek posts. I would hope that the "dirt bag" across the street, your insurance company, or a zoning board member is unable to run a computer, because you could have a bigger fight on your hands than you planned for.

Just get it all set straight and sleep peacefully at night. (Please send hate mail to my personal e-mail account! Thanks! :D)

Robert,

I am not trying to hide from anyone. I know what you get when you google my name because I have did it myself.

I know what it is like to run a business because I do that now (small lumber yard). The ONLY similarity between the yard and my turning is selling. Turning wise, I don't have a showroom, I don't have any employees, I have none of the trappings of a business.

My main gripe is how a business is defined in Indiana. If you sell ANYTHING it is a business. That is crazy. There should be a minimum before any rules kicks in, say $6,000 or $10,000. I could understand that but ANY sales is ridiculous.

Your probably right about the insurance because of my exposure on the internet but that size claim would not be unusually for a home shop and if I would have been smarter about my exposure I would have been all right.

Toney

[Toney Robertson]

Toney, I know that most states have a minimum or maximum amount of money you can make from certatain areas or individuals. I used to do some painting and simple repairs for a restaraunt and we allways made sure that when I reached the $2000 mark for the year I was done. He did not have to say what the money went to and just came out of petty cash. Also if you make things for other shops and they pay all the taxes on it no W-4 or 1099 is filled out or sent out as you are not working for them just one of the vendors they use to get their product from. As long as the amounts don't reach large amounts, say $5000 or more the business takes the hit and the tax is paid. This is how a hobbyist can provide small amounts of product, but the income tax portion is your responsibility. If you say you made $3500 you can't show a loss as a hobbyist, so your expenses (tools, material, whatever) can't be more than what you made. You can make nothing, but should show some sort of positive income every few years. If you are the soul proprietor then whatever you pay yourself is just part of doing business and it is not considered income until you show a profit as it all part of the business working.

So what really is the problem is that your neighbors are jealous of you and think that it is unfair that you want to do something they cannot. It may be easier to find a small shop to lease with another person or persons and save the money of adding onto the shop and put it towards the rent. The insurance for the home shop is a bugger and is always the problem, but like John and Ken say, when you have $1000's tied up in tools it is cheaper in the long run to pay the piper and save your butt if anything should happen to the shop. It always comes down to the fact that the government, insurance companies, and neighbors are looking out for themselves and not us!

Get a tax# and see what all the stipulations are in your town and make the decision from there. No matter what happens you can't please everyone and you are the only one who can keep you safe.


Good luck,

Jeff


I WISH Indiana was so enlightened to have a mininum amount before all the regs kick in but NOOOOO not here (at least in my county) the minimum is ZERO. If you sell anything you are a business.

I have a tax number at my REAL business and that is the number that I have used at shows that required one. I should probably just get my own.

I have access to a 24' x 65' building at the lumber yard where I work now. It was a shop years ago and could be renovated relatively easily but it is a VERY old building and comes with all the problems that old building have.

Moving to that location would also negate a major reason that I enjoy the location of my shop now. My Mother is 92 and it is nice to be close a good portion of the day so that if she needs help with something, I am there.

Oh well, this to shall pass.

Toney

[Robert McGowen]

Toney,

If I remember correctly, a few years ago you were going to give up turning. You could not sell anything, could not get anything accepted by a jury, could not win any awards, and were more than a little tired of it all. Someone told you (you know who it was... :D) that you now had no where to go but up. You renewed your efforts, won some awards, got accepted by juries, I think I remember a state fair in there somewhere, started selling turnings, got some commissions, etc. Now you are needing to expand your shop! Why would you NOT want to be a business? I would tell everyone how big my business was and that I was a PROFESSIONAL turner! It seems like it would be hard to go to a gallery and tell them they can't call your shop, have to pay only in cash, and that you are not really a business or a professional. I would think that this is just another OPPORTUNITY to step up to another level. If you have a hobby mindset, then you will always be a hobby turner. (No offense to any hobby turners intended. :)) Go squeeze this lemon until lemonade comes out! Good luck with it one way or the other.

Robert

[Allen Neighbors]

Robert,
My main gripe is how a business is defined in Indiana. If you sell ANYTHING it is a business. That is crazy. There should be a minimum before any rules kicks in, say $6,000 or $10,000. I could understand that but ANY sales is ridiculous.
Toney

I agree. That means that if I have a new can-opener that I bought, but decided that I didn't like it, and sold it to a friend for half what I paid for it, that I now am a business owner. How stupid are some governments!! Toney, you need to move. ('bout as ridiculous as Indiana Government, huh?)
Don't know what else to suggest, other than getting sigs on a petition to recall some city fathers/mothers....

[John Keeton]

You guys are fun to listen too!!:D:D But, please don't let this thread get too personal - though it may have already gone far enough.

Let's lighten it up a bit, and get back to the topic of "whether you that sell your turnings have a business license" and not drift off into political statements about the government and the moral practices of others.

Thanks - I know all of you are itching to respond, but please don't!:)

[Ken Fitzgerald]

You weren't referring to me were you John?:confused:













:D

[John Keeton]

You weren't referring to me were you John?:confused::DOnly the part about fun to listen to!!:D

[Robert McGowen]

....... get back to the topic of "whether you that sell your turnings have a business license" .......

Yes, I do. :D

[Bernie Weishapl]

Toney, and others I have a business license, a shop, sell my woodturnings, have a city permit to operate a home business, and business insurance. Toney I have a 24 X 40 shop. Half of it is personal and the other half with my clock shop/woodturning is considered commercial and a business. So property taxes are personal on half of the building and commerical on the other half. I pay commerical trash pickup since I have a business on the property even though I only put maybe one or two extra bags of trash in the dumpster in a year. If I sell one ink pen for $15 I am a business. I think it is stupid but it is Kansas law. So you either suck it up and do what they ask or you don't sell anything. Last year I sold around $3500 which helped pay for tools, part of the electric, water and telephone which I can deduct off my taxes. I can also depreicate the building and tools (lathes, DC, bandsaw, table saw, drill presses, etc) off my taxes. Yea like I said it is stupid but you do what ya gotta do if you want to sell. My clock shop is a hobby but since I get money for repairs I am classified a business. I must collect sales tax on everything I do from clocks to my woodturnings.

[Mike Minto]

Hmmmm...let's take this to the Off-Topic forum. There we can discuss 'thought crime', Mohandas Ghandi's Satyagraha, Nelson Mandela, Prohibition, and other people and ideas.

[Ted Jay]

Ron,

Well, here in good ole Indiana, if you sell ANYTHING out of your home then it is considered to be a business. I asked the lady at the county this morning about what if one has chickens and sells the eggs. Yep, that is a business and must go before the zoning board for a variance for a home business. What a bunch of bull.

So, check your state and local governments.

Toney

What do you do if or when someone has a garage sale in Indiana?

Just curious!

(When they bust a "crack" dealer do they charge them for not having a licence too, since they are now a business?)

[Steve Schlumpf]

This thread has run it's useful course and is now closed.