Need to be a registered business to publish games?
by Rybo · in Torque Game Engine · 11/26/2008 (3:07 pm) · 5 replies
Or not?
Can I simply make a game and sell it on the web? Or will I get arrested by that giant bullseye I see on TV which hunts down bad men who don't pay tax?
Can I simply make a game and sell it on the web? Or will I get arrested by that giant bullseye I see on TV which hunts down bad men who don't pay tax?
About the author
#2
That's not exactly true. It depends on the state that the purchase is made in, but the vast majority of states, as well as the US federal government, has extended their moratorium on taxing internet commerce until it is strong enough to survive the draining of blood that the government will eventually impose...
11/26/2008 (3:32 pm)
Quote:Sales tax doesn't apply over the internet because it's not within one state.
That's not exactly true. It depends on the state that the purchase is made in, but the vast majority of states, as well as the US federal government, has extended their moratorium on taxing internet commerce until it is strong enough to survive the draining of blood that the government will eventually impose...
#3
11/26/2008 (3:55 pm)
You don't need to be a registered business to make a game and sell it on the web but it certainly helps when it comes to taxes. Setting up a business can also protect your personal assets should something bad happen like lawsuits or bankruptcy, depending on the type of business that you set up.
#4
That said...
Every state has different regulations about businesses. For instance, California is particularly hostile to new businesses: it has a minimum franchise tax that requires all corporations operating within its borders to pay a minimum of $800 per year. That applies even if your business operated at a loss, or didn't do business at all.
So, being an internet-based business will not necessarily protect you from the tax monster.
Some of the reasons to form a business are:
* Tax breaks. Some business structures allow you to deduct your business losses from your income tax. This can offset your losses during those lean, early years, and can give your accountant some powerful tools to work with.
* Limited Liability. Some business structures separate your business assets from your personal assets, which means that if you get sued and lose, the plaintiff will probably be limited to seizing your business assets, and not your house, car, wages, retirement account, etc. Remember that you don't have to do anything wrong to be sued and lose.
* Legal requirements. Some states require you to register as a business if you bring in more than a certain level of income. Others require you to register if you intend to sell anything at all. The line between "business" and "hobby" varies by state, so look up your home state's guidelines.
* Legitimacy. Owning a formally registered and legally established business can give you a very small degree of "street cred" that the casual developer may lack. It won't open doors at your local country club, but it may lay the groundwork for some good business credit and contacts.
Do your research, and find out what your state's regulations are. See if it makes sense for your particular situation. Chances are good that establishing a formal business entity will be a very smart move.
11/26/2008 (5:26 pm)
Standard disclaimer: I'm not a lawyer. I'm not an accountant. I'm not a doctor. I may not even be human.That said...
Every state has different regulations about businesses. For instance, California is particularly hostile to new businesses: it has a minimum franchise tax that requires all corporations operating within its borders to pay a minimum of $800 per year. That applies even if your business operated at a loss, or didn't do business at all.
So, being an internet-based business will not necessarily protect you from the tax monster.
Some of the reasons to form a business are:
* Tax breaks. Some business structures allow you to deduct your business losses from your income tax. This can offset your losses during those lean, early years, and can give your accountant some powerful tools to work with.
* Limited Liability. Some business structures separate your business assets from your personal assets, which means that if you get sued and lose, the plaintiff will probably be limited to seizing your business assets, and not your house, car, wages, retirement account, etc. Remember that you don't have to do anything wrong to be sued and lose.
* Legal requirements. Some states require you to register as a business if you bring in more than a certain level of income. Others require you to register if you intend to sell anything at all. The line between "business" and "hobby" varies by state, so look up your home state's guidelines.
* Legitimacy. Owning a formally registered and legally established business can give you a very small degree of "street cred" that the casual developer may lack. It won't open doors at your local country club, but it may lay the groundwork for some good business credit and contacts.
Do your research, and find out what your state's regulations are. See if it makes sense for your particular situation. Chances are good that establishing a formal business entity will be a very smart move.
#5
@Rybo - There's quite a few government and local council initiatives around to support and kick-start small businesses or sole traders. At the very least they should be able to give you a lot of free advice about setting yourself up and where you stand when it comes to the tax man. It can be a bit of a hit/miss thing as to whether you get someone really interested in helping or someone who's just punching the clock for a pay cheque, but nothing ventured nothing gained and it beats drowning yourself trying to research it alone.
Do a little leg work, find out what's available in your nearest city and pop in for a chat. Businesslink.gov.uk isn't a terrible place to start, you can run a postcode search on the site to find your local office.
11/27/2008 (2:41 pm)
Worth noting that Rybo is in good old Blighty, although in principle the advice given still applies though the details will be different.@Rybo - There's quite a few government and local council initiatives around to support and kick-start small businesses or sole traders. At the very least they should be able to give you a lot of free advice about setting yourself up and where you stand when it comes to the tax man. It can be a bit of a hit/miss thing as to whether you get someone really interested in helping or someone who's just punching the clock for a pay cheque, but nothing ventured nothing gained and it beats drowning yourself trying to research it alone.
Do a little leg work, find out what's available in your nearest city and pop in for a chat. Businesslink.gov.uk isn't a terrible place to start, you can run a postcode search on the site to find your local office.
Torque 3D Owner Dan Keller