As some of you may know, I'm currently writing a game that I plan to sell online as a PDF. Well, the game is nearing completion, and someone brought up the topic of business licenses.
Since I'm going to be selling downloadable content, and also all of the content on CD and shipping it to people, does any of this require a business license? If not a business license, do I need anything else to sell the game?
Thanks.
As some of you may know, I'm currently writing a game that I plan to sell online as a PDF. Well, the game is nearing completion, and someone brought up the topic of business licenses.
Since I'm going to be selling downloadable content, and also all of the content on CD and shipping it to people, does any of this require a business license? If not a business license, do I need anything else to sell the game?
Thanks.
Legally you will need to get a business license and you will have to pay taxes (and you're supposed to pay state sales taxes when you sell to anyone from within your state) and declare your business to the IRS.
Try this link, it's a good small business primer:
http://www.sba.gov/starting_business/startup/guide.html
Good luck!
-Darke
It may be a matter specific to your state or municipality, mind you. I know here in Arizona (this is not legal advice) you don't necessarily need a license if you're only providing a service, as services don't charge sales tax in the state. However if you're selling a product you'll have to charge tax, and if you're selling a product for resale you won't charge tax but you'll need to file that you didn't charge someone tax, and in either case you need a business license.
For what it is worth you can think about your current game just as you would a product you would sell on ebay. Sell it, make profit and in theory pay taxes on that profit.
Only down side, if your product hurts or produces a business type problem, the problems fall into your hands and not the business. For instance, liability issues. If someone claims their 4 yr old child choked to death on one of your game pieces. I personally would not want this to every happen, but if it does and your not a corporation, your personal life is going to be screwed.
This is the exact reason why I and others create a corporation, it reduces personal liability, maybe not all, but a large chunk that might protect my home, car, bank accounts....
Just some food for thought....
I would also recommend to check with your local Small Business Administration office (http://www.sba.gov/) for advice and help.
-Bryk
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I don't know about CA taxes, but in NY (tax capital of the world) every business needs to register with the state to get a tax ID number. They are then required to file quarterly statements of income tax collected, etc.
Selling over the internet will hopefully mitigate most of that for you, but you may still need to require sales tax from other CA residents.
I don't think you will need any other licenses for a small business selling a game online. Once you grow into a multi-national conglomerate selling millions of units a year...