Research, Research, Research: TaxesA column article by: Ace Masters
This time I am going to dive right into the subject, no long-winded setup here.
Why? Because this is a particularly important subject. It’s also something many business writers tend to overlook, but you can’t afford to overlook this.
Number two on the list of things to research: Local, State and Federal Laws and Taxes
The unfortunate issue is that I can’t give you any direct info on much of this. Every business is different, laws and taxes are different in every state, and while federal laws are consistent, they may or may not apply to your business.
Right now the one thing I can do is tell you the best way to go about getting this info. I did all this and it worked. It should for you, too.
LOCAL LAWS AND TAXES
In this case "Local" is defined as the city or town your business operates in. For the moment, I will assume you only have one location - because this is all you need to start with.
The first thing you need to do is go to your local City Hall or government building and research the city laws on periodical publishing, if there are applicable laws. Comic Book publishing is a niche market that often comes under periodicals as they are a serial format publication on a monthly or similar schedule.
Why go to City Hall and not a lawyer? Lawyers will charge you to tell you info you can get from City Hall, or the library, for free. City Hall is still better than the library because there should be someone at City Hall you can talk to help explain the laws, or taxes if they need to be paid. Plus, if you need to get a license (or licenses), it doesn’t hurt to make a connection with your local government.
No matter which way you choose to go, City Hall, Lawyer, or Library, make sure you get the local laws that apply to the city or town in which the business address of your company resides. The reason for this is that many cities are part of a greater Metro Area.
My home town of Glendale, Arizona is part of the Phoenix Metropolitan area, but it is not part of the City of Phoenix. Glendale is separate from Phoenix and is its own city. Yet there are people who live in Glendale who, for some reason, get a license with the City of Phoenix by mistake, when their business is based in the City of Glendale.
Make sure you are getting the info for your city, not for a larger metro area.
Also, please keep in mind this simple fact: Your local laws and taxes may, and probably will, differ from your State.
STATE LAWS AND TAXES
Just because the city you operate in may not require a business license or charge taxes, that doesn’t mean the state may not. States often have different laws and separate taxes than local cities and towns.
Your city may say that you don’t need a business license to operate in the city. But the state may counter with, "That's fine, but you still need a business license to operate in the state." Guess what? The state wins.
States are a complete different beast than cities. You don’t want to learn this the hard way. The simplest -- and best -- way to go about doing your research is to contact your state government directly.
In this case, it may not be as easy as going to your local city hall, but it shouldn’t be hard. States often have hotlines that can offer research assistance. Call your state government (they usually have an 800 number) and ask for the business licensing department. Talk to someone there and ask a few questions. Then ask if they have any info on starting up a business, specifically on state laws and any applicable taxes.
Most states will have info and will gladly mail it to you. States want to keep this a simple and efficient process because they want you to start a business, any legitimate business, and are more than willing to give you the info you need. That's because if you succeed and make money, the state makes money, too.
FEDERAL LAWS AND TAXES
This is going to seem redundant, but again Federal Laws and Taxes will differ from local and state taxes.
If your local and state government say you don’t have to pay taxes, that means nothing if the federal government says you do. You may not be paying local or state taxes, but you will be paying federal taxes.
Just as with the state, simple steps should give you the info you need: make some calls and request packets. The feds love it when new companies pop up. They salivate at the prospects of taxes coming in from "fresh blood."
So, to reiterate, this is a very important subject. You need to know your local, state and federal laws and taxes, how they differ and what you need to do. They research may be extensive, but getting the info should be as easy using as picking up your phone and dialing the numbers
Repeat: I know this seems simple, but all you need is the initiative to look up the right number, pick up the phone, and then talk to the person who answers. Ask questions, take notes and get them to send you everything you need.
After that, the ball is in your court.
I will leave you with this Burning Question:
Do you know what company is the largest comic book publisher in the world?
Are you sure? The answer may surprise you.