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The Business of Knife Making A forum dedicated to all aspects of running, managing and legal operational issues relating to the custom knife making and custom knife selling industry.

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  #1  
Old 02-20-2006, 10:49 PM
AKmik AKmik is offline
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Web page and business/legalities

Hello all,

I was wondering if someone here could share a little experience and knowlage with me on this one.

I am thinking about setting up a web page to sell a small volume of knives and my main hobby, gunstocks. I was wondering where is a good place top get info on keeping it legal without over complicating my life.

Is a business liscense required for a small volume guy,.....where does a hobby become a business. Is there a minimum ammount of sales required to make a liscense a necessity?

Any info is appreciated.

Mike
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Old 02-20-2006, 11:13 PM
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Shakudo Shakudo is offline
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http://www.dced.state.ak.us/occ/buslic.htm
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Old 02-20-2006, 11:31 PM
AKmik AKmik is offline
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Excellent info...but it gets even better now

Thank you for that info.

Now the kicker, I am an AK resident..stationed in GA for now.

I will definately need to do my homework .

Thanks

Mike
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Old 10-05-2006, 01:03 PM
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prizzim prizzim is offline
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I have the exact same question. I'm in Virginia, and I looked at the state pages on business, and didn't find the answer to "how much money makes your hobby a business". It seems kind of all-or-nothing. If I sell $1000/year in knives, does that count? More? Less? Every dime I ever make is taxable and requires paperwork?

Help?


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Old 10-05-2006, 02:18 PM
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Shakudo Shakudo is offline
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a $1000 a year is reportable income on federal taxes,state and local can be a bit different. if you have a website and sell you are considered a business and then required to collect state sales taxes. as far as needing a business license,that is usually a local requirement.i have a state sales tax number and i am requires to charge sales tax on all retail sales in the state. on consignment deals the retail store covers the taxes from their cut of the deal.link to Va. tax info,which probably won't answer your question without a phone call to them.

http://www.tax.virginia.gov/site.cfm...nessFAQ2#sales
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Old 10-05-2006, 04:30 PM
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prizzim prizzim is offline
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So, selling on consignment takes some of the pressure off, yes?

While at Bowie's last weekend, there was a proposition to join a co-op that sells makers knives at the Smokey Mountain Knife Works. They're opening a custom / handmade knife section in an adjacent building, and makers can buy in for $100/year, and take 50% (SMKW gets 25%, the dude running the custom house gets 25%) after it's all done. Not a bad way to wholesale your work... and I'm guessing I wouldn't have to worry about the business end at all, no?


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Old 10-05-2006, 04:30 PM
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How does e-bay selling work out? Taxable income?


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Old 10-05-2006, 07:28 PM
Carey Quinn Carey Quinn is offline
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This whole idea of business and licenses and taxes ad nauseam has been on my mind for a while. Especially since Terry Primos announced he is giving up knife making because he can?t overcome the overhead, most of which is tax related.

Before I get started, let me say that I am offering my opinion for consideration. I am not recommending a course of action for anyone. Just my rant.

I have tried to operate a business from my home and before I was granted a license I had to pay for each year, I had to go before the city zoning board and get a zoning variance because I live in a residential neighborhood. Then I had to apply to the state for a tax number so I could send them a portion of every dollar I made. Then, at the end of the year, I had to give the city a list of all my equipment and its purchase price and when it was purchased and a list of all my supplies and materials and their values so they could bill me for ad valorem (personal property) tax. Then, of course, if I made a sale of any kind, it had to be reported as ordinary income to the state and federal governments. It didn?t take long to figure out that I was working for the city, state, and federal guys and they didn?t think I needed any income at all. Needless to say, that business didn?t last long.

I?m probably just like a lot of other people who make knives. I really like to make knives and I figure I can sell some and over time pay for my habit. I doubt I will ever be well known in the world of knives but that is OK. I just want to make knives. I don?t want to have a knife business, I just want to make a few and maybe sell enough so I don?t have to rob the family to do it.

Ask yourself, if you decided to have a yard sale and sell off a bunch of stuff you have collected and made through the years, would you get licenses and tax numbers and all that crap or would you just have a yard sale and have a good time? I submit that most of us wouldn?t even report the money we made as income but according to the tax folks, it is income and should be reported for tax purposes.

Bottom line; if you are in the ?knife business? you should probably do the whole tax and license thing (people on welfare need the help). If you have a hobby of making knives, report the income on your taxes if you feel that you should (render unto Caesar?). Whatever you decide, have fun. If it aint fun, find something that is and pursue that.

Thanks for your time.

Carey


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