Replies

1. 
   Crunk | Sep 22, 2003 08:25pm | #1

   There usually is no de minimis threshold.  If you're in business (in most cities) you need a license.  Furthermore, you are also most likely required to collect and remit sales taxes, or if your customers are wholesale, at least report your wholesale sales to the state.

   Of course, you may decide that you don't care to comply.  That has its own set of risks, but you be the judge.

   If you have any doubts, call the appropriate city or county office and pose a hypothetical without giving your name. 

1. 
   twilliams1223 | Sep 22, 2003 10:49pm | #2

   A BL would only cost a few dollars.  also might want to consider a resellers certificate from state revenue of dept.  that way get supplies w/o taxes and at wholesale outlets.  you would have to charge and remit sale taxes though.  Here in N. Carolina a resellers cert is free.Tom

2. 
   davamoore | Sep 22, 2003 11:07pm | #3

   Ditto what the above said.  "Licensed business" is a fairly nebulous description and means different things in different states and municipalities.  Find out what's required in your location, in terms of licenses, certificates, sales tax reporting, etc., and you'll probably have enough to answer any questions about being "licensed."  You might also call the BBB and see what the heck they mean by "licensed."

   Woodworking, depending on what type of work you do, can fall in that nebulous world between, say, a contractor with employees that may need to be bonded, and a sole proprietor, "fine artist."  (Please, let's don't open up that whole thing about what is and isn't "art," and what defines an artist!)  What's required to be "legit" would also, I guess, depend a lot on your products and services.

   A business license (e.g., from a city) is not required where I live.  I do mostly one-of-a-kind pieces, which may explain why I've never been posed this question before (and would probably want to respond by saying "What the hell are you talking about?" if someone ever put it to me the way it was put to you!).  Besides my portfolio, however, I do have a few credentials I suppose I could pull out that show I'm legit -- business insurance certificate, sales tax certificate, various memberships, satisfied clients, fairly solid contracts that protect me and my clients, etc. 

   If that didn't satisfy somebody, I am almost positive I'd rather eat another week of mac 'n cheese that do a project for him/her.

   David (just taking a rare occasion to spout off -- now back to my hole)

   "The world that was not made is not won by what is done" -- Mundaka Upanishad

   
   

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   Edited 9/22/2003 4:12:33 PM ET by davamoore

3. 
   RW | Sep 23, 2003 05:04am | #4

   and to add

   don't put much stock in what the BBB has to say about you. If you don't pay the fees to be a member, they pretty much don't know about you. For some businesses, membership can get them something they want. The air of respectability, someone else to arbitrate between them and a customer when things go sour, but there's no reason that you have to be a member if you don't want to be. Kind of like a homebuilders group. Sure, its great to have that little NAHB logo on the card, but if you don't need it, why spend the dough?

   Your potential customer needs a reality check. The BBB doesn't determine who is legitimate. You do that with your work and your ethics. I'm a little sour on them; I think it's a racket. Not many of the remodelers around here have much use for them. As far as licensing, that's all local. You gotta dig that up on your own. But if you are or you aren't, it doesn't take a third party to figure it out.

   "The child is grown / The dream is gone / And I have become / Comfortably numb "      lyrics by Roger Waters

4. 
   forestgirl | Sep 23, 2003 08:39am | #5

   Don't know about Michigan, but you could probably go to their state web site and find out about how to get a business license.  In WA State, it is incredibly simple and cheap!  $15-$25, a couple of forms, and you have your UBI number (Universal Business Indicator, or some such thing, one number good for sales tax, State L&I and State Unemployment reporting). 

   The problem with operating without one is that if someone decides to take a run at you (say, a disgruntled client), you could end up paying all kinds of penalties for the sales you made in the past without a business license.  It's much better to just be above-board and get the license.  (No need to 'fess up to pre-license sales I suppose.)

   forestgirl -- you can take the girl out of the forest, but you can't take the forest out of the girl   ;-)

1. 
   jimmyk | Sep 23, 2003 04:02pm | #6

   Thanks for the great responses everyone, I'll go check with my local government.

5. 
   ChuckyDee | Sep 24, 2003 02:47pm | #7

   I have no experience yet with a business liscence, but it would seem to me that itwould give you the ability to take a lot of your expenses of your state (if you have them) and fed. taxes.

   I plan to get one soon and I haven't sold anything yet.  Done a lot of reading (education expense), baught some tools, made some cabinets and workbench for my shop (capitol investment expense), and plan to take some woodworking classes (more education expense).  Plan to claim it all on taxes. Hey, every little bit helps when you're trying to make a living.

   I like the idea of being able to buy material wholesale also.  Don't know if the liscense is required for that, but I think it is.

   Chuchyd

1. 
   forestgirl | Sep 24, 2003 08:14pm | #8

   Buying material wholesale:  In WA, it's loosely called a resale license, and yes it's part and parcel with the whole registering-as-a-business thing.  Material (wood, hardware, etc.) is not the only thing that can be bought sans sales tax.  Any material that goes into a piece that you sell.   Manufacturing tools qualify also.  That goes a long ways when buying a tablesaw or a jointer!  Check the rules in your state, of course.forestgirl -- you can take the girl out of the forest, but you can't take the forest out of the girl   ;-)

6. 
   fredsmart48 | Sep 25, 2003 03:05am | #9

   If you are going into business you need to get to a CPA to help set up your bookkeeping system. If you have not taken a bookkeeping course before or have forgotten most of it take one through the county extension office or community college.