How to Register Your Art or Craft Business in Utah

How to Register Your Art Business in Utah | Utah Art Market

Congratulations on taking the leap to turn your passion into a business! Selling your art at markets and online is exciting, but it's important to start off on the right foot legally. This guide will walk you through the steps to register your art business and handle sales tax in Utah. It might seem intimidating at first but it is actually way easier than it sounds. It only takes about 15 minutes online and costs $59 for the state's registration fee. You can do it yourself and you definitely don't need to use 3rd party services like Legal Zoom which will charge you a lot in processing fees. Registering directly with the state allows you to maintain control over the process and will save you money.

Step 1: Choose Your Business Structure

Most artists in Utah start as sole proprietors or form a Limited Liability Company (LLC). Here's a quick overview:

• Sole Proprietorship: This is the simplest structure. You and your business are legally the same. It's easy to set up, but you're personally liable for any business debts.

• LLC:  An LLC provides some separation between you and your business, offering personal liability protection. It's a bit more complex to set up but can be beneficial as your business grows.

  
  

Need help deciding?  The Utah Small Business Development Center offers free counseling and resources to help you choose the best structure for your needs.

Step 2: Register Your Business

Here's how to register your art business in Utah:

1. Choose a Business Name: If you're operating under your own name (e.g., "Jane Doe Art"), you might not need to register your name. If you're using a different name (e.g., "Mountain View Creations"), you'll need to register it with the Utah Department of Commerce. You can check name availability and register online at the Utah Division of Corporations website.

2. Register with the State: You can register your business online through the Utah Division of Corporations website linked above. Follow the steps outlined on that page to complete your registration. Once you are registered you will need to renew yearly. The state of Utah will send you a renewal card in the mail. Renewing is as simple as following the steps on the renewal postcard and then following the prompts on the website once logged in.

3. Obtain an EIN (if needed): If you plan to hire employees or operate as an LLC, you'll need to obtain a Federal Employer Identification Number (EIN) from the IRS. You can apply for an EIN online for free at the IRS website. 1    

   
   
   
   
   
   

Step 3: Understand Utah Sales Tax

As an artist selling your work in Utah, you'll need to collect and remit sales tax. Here's what you need to know:

1. Obtain a Seller's Permit:  You must obtain a seller's permit from the Utah State Tax Commission before you can legally collect sales tax. You can apply online at the Tax Commission's Taxpayer Access Point (TAP).

2. Collect Sales Tax:  The current state sales tax rate in Utah is 6.1%. Some cities and counties may have additional local sales tax. You can find the combined sales tax rate for your area on the Tax Commission website. If you are using a website such as Shopify as your point of sale, which is recommended, the point of sale system should be able to calculate sales tax automatically for you. Using these point of sale systems also helps tremendously when it's time to report your income and expenses for income tax filing.

3. File Sales Tax Returns: You'll need to file sales tax returns with the Utah State Tax Commission, either monthly, quarterly, or annually, depending on your sales volume. You can file and pay your sales tax online through the Tax Commission's website by logging in under user credentials created in item 1 above.

   
   
   
   

Frequently Asked Questions

• Q: Do I need to register my business if I only sell online?

  • A: Yes, even if you only sell online, you'll need to register your business with the state of Utah if you are based in Utah.

• Q: What if I only sell at a few art markets per year?

  • A: You still need to obtain a seller's permit and collect sales tax, even if you only sell occasionally. You might qualify for a temporary seller's permit if you're participating in a specific event. You can find more information about temporary permits (special event sales tax) on the Tax Commission website.

• Q: Where can I get help with my taxes?

  • A: The Utah State Tax Commission offers resources and assistance for businesses. You can visit their website or contact them directly for help.

Disclaimer: This information is for general guidance only and does not constitute professional legal or tax advice. It's sometimes best to consult with a qualified professional for advice specific to your situation.