Are They Legit???

I recently read an article about how a photographer ruined her career by stealing other photographers’ images and posting them as her own. You can read the article for yourself here: http://www.potsc.com/potsc/how-i-ruined-my-career/

It prompted a conversation between Michelle and me. From the inception of our photography business, we have strived to do everything legitimately, ethically, and by-the-book. Starting a photography business was neither easy nor quick. It took LOTS of work and research, mixed with a healthy dose of blood, sweat and tears.

Now that I see a multitude of “professional photographers” and “photography businesses” popping up, with what seems like a new one appearing every day on Facebook, I have to wonder: Are they legit?

You may ask, “What do you mean by legit?” I’ll be glad to answer. A “legit” photographer is one who has taken the correct steps to start and run an legitimate business. Here are just a few of the steps:

1) Registering with the federal government (IRS) to get an Employer Identification Number (EIN). You need this number when you file your yearly income taxes to report any and all income generated from your photography business. Yes, that’s right, you have to report any income you make as a photographer and pay income taxes on it.

2) Registering with the state to get a Business Registration Certificate. Engaging in business without a registration certificate is a crime. In other words, if you are charging for taking photos, but do not have a Business Registration Certificate, you are breaking the law.

3) Collecting and Paying Sales Tax. For any tangible products you sell (such as prints), you are required to collect sales tax. You then must remit this sales tax to the State on a timely basis. For example, if you are charging a flat-rate of $50.00 for a session with prints, you owe the state $2.83 for taxes.

4) Paying the “Use Tax”. For ANY equipment you purchase for your business, you have to pay state sales tax on that equipment. If you purchase the equipment at a store, you will automatically be charged the sales tax. However, if you purchase equipment on the internet, you will not be charged sales tax. This is where the use tax comes in. When you file and pay your collected sales tax (see #3), you also have to report and pay any use tax. Here is an example: You purchase a camera from Amazon.com for $1500.00. You owe the state the sales tax for that purchase. For West Virginia, that amount would be 6% of the purchase price, which is $90.00. If you do not pay the use tax on your purchases, you are breaking the law.

When taking just these few things into account, I really have to wonder how many “photographers” are legit. How can a photographer who charges $50 for a session with prints make any kind of a profit? After all, once they deduct sales tax, income tax, your own print costs, and factor in other costs, such as the use tax on your equipment, how can they make any profit? My guess is they can’t. Unless they aren’t legit.

- Patrick