Collecting Sales Tax for Artists

Since it is the beginning of the new year, we thought we would include some tips on things you should know about selling online and offline. More artists are selling online these days, and there is some confusion on how to charge sales taxes.

If you have a storefront, collecting sales tax is required. You charge your customers the sales tax required by the state, city or county you work in. So if you live in Los Angeles, CA, you need to charge sales tax for both the state of California and the City of Los Angeles.

Selling online can be different, and the products you sell might have different requirements.

If you have a presence in a state, like above, an office, warehouse or store, you must collect sales tax in that state and city or county. So if you have an office in Los Angeles, you need to collect sales tax. If you are uncertain whether or not your business qualifies as a physical presence, contact your state's revenue agency, unless you live in an exempt state such as Alaska, Delaware, Hawaii, Montana, New Hampshire or Oregon. If you do not have a physical presence in a state, you are not required to collect sales taxes from customers in that state.

But you also need to know for what items you need to collect sales tax.

If you are providing a service, you do not need to collect sales tax, unless that service uses something that you have created or manufactured if it is a tangible product. That means that down-able digital goods such as software or pdf publications are not taxable.

So here is where you have to be careful if you sell both tangible goods and digital goods. Sites like Squarespace do NOT let you set sales tax on individual products, (a really dumb move on their part) so you are stuck with either the same sales tax on everything, or on nothing. DO NOT use these sites. Also, if you are setting up an ecommerce site, make sure that you can get a listing of what taxes you have collected, something Squarespace also does not do well. So make sure that you do a test on everything before choosing a hosting site, and make sure they have the basics you need to run an ecommerce site.

Now is a good time to make sure everything is set up correctly on your site. Amazon has information on how to set up sales tax if you self publish through them, and it’s complicated, so check it out.

So get GYSTing, and have a really great 2017.

Feel free to share this article with other artists.

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Advice for Artists in the Season of Crafting

When money is short, and gifts are expensive, Artists often use their talent in crafty ways. In art school, we’re lead to believe that craft is a dirty word akin to the death of your serious art career. How does one balance between the two?

First and foremost, you make whatever the hell you want.

I am giving you the absolute authority this holiday season to hot glue, puffy paint, and glitter whatever makes you feel good. Everything you make is not your art career, and everything you make isn’t art.

Pretend with me a moment that you somehow became absolutely, no doubt about it, everyone-in-the-world-knows-your-name levels of famous as an artist. You’ve made it BIG, kid! Kanye big! How would this defame your career if someone brought it back up? When was the last time you saw a major retrospective and the artist was mocked for something they made their mom? It’s not a thing*.

Furthermore, if your portfolio is full of craft, or artwork that could be confused for craft, there are much bigger issues than a clothespin reindeer coming to bite you in the proverbial ass fifty years from now.

Even though it goes against every instinct your mentors instilled in you, if your Aunt wants something involving a clothespin and some googly eyes looking vaguely like a reindeer? Go treat it like an assignment. Go make it three different ways. Then 30. Which ones were successful? Which weren’t? Why? What’s the biggest clothespin we can make? Or the smallest? What about materials choice? Scale? When was the last time you gave yourself an actual class-like assignment? Don’t settle for the prefabricated. Not only will you end up with something uniquely special (which is probably what your Aunt wanted in the first place) but it’s an excellent excuse to force your art skills back into action after a slump.

*If you’re able to find examples of otherwise, please email megan@gyst-ink.com

For tons of examples, do a search for clothespin reindeer for some inspiration.

Does Your Candidate Support the Arts? ArtsVote2016

Americans for the Arts has been tracking those running for office, and whether they support the arts. For an overview of the presidential race, check out http://www.artsactionfund.org/pages/artsvote2016.

Other reports featured are Arts and the GDP that can help you make a case for the arts, as the arts contributed close to 7 Billion in 2012. That’s with a B.

Creative Industries Business and Employment in the Arts analysesthe economic scope and impact of the arts across the US.

There is also an Arts and Economic Prosperity Report as well as State Government Funding to the Arts. Look up your state and see how they are doing. Want to know whom the National Endowment for the arts funded? Check that out as well.

While your there, become a member of Americans for the Arts, or check out the rest of their site. Statistics can sometimes help out your cause, and if nothing else, see who to vote for.

Artists are a vital part of our culture and should be supported, so make your voice heard.

Six Creative Commons License Options

Creative Commons is a form of copyright with many options for creators who want to share their work. For most it also includes a requirement to give credit for the work. But there are a number of options when deciding how to create a creative commons license that many artists are not aware of. Be aware of the differences in these licenses so that you use these images responsibly.

These definitions are from the Creative Commons Website, so for more details and specifics, see their details.  https://creativecommons.org/licenses/

This license lets others distribute, remix, tweak, and build upon your work, even commercially, as long as they credit you for the original creation. This is the most accommodating of licenses offered. Recommended for maximum dissemination and use of licensed materials.

This license lets others remix, tweak, and build upon your work even for commercial purposes, as long as they credit you and license their new creations under the identical terms. This license is often compared to “copyleft” free and open source software licenses. All new works based on yours will carry the same license, so any derivatives will also allow commercial use. This is the license used by Wikipedia, and is recommended for materials that would benefit from incorporating content from Wikipedia and similarly licensed projects.

This license allows for redistribution, commercial and non-commercial, as long as it is passed along unchanged and in whole, with credit to you.

This license lets others remix, tweak, and build upon your work non-commercially, and although their new works must also acknowledge you and be non-commercial, they don’t have to license their derivative works on the same terms.

This license lets others remix, tweak, and build upon your work non-commercially, as long as they credit you and license their new creations under the identical terms.

This license is the most restrictive of our six main licenses, only allowing others to download your works and share them with others as long as they credit you, but they can’t change them in any way or use them commercially.

Creative Commons also provides tools that work in the “all rights granted” space of the public domain. Their CC0 tool allows licensors to waive all rights and place a work in the public domain, and our Public Domain Mark allows any web user to “mark” a work as being in the public domain.

So whether you are using another artists image, or want to tag your own images with a Creative Commons License, these tips will help you choose the right option.

For detailed Copyright Information go to http://www.gyst-ink.com/legal-issues/

Feel free to share this article with other artists.

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Bookkeeping Checklist for Artists

Things to Check Every Day:

            Check your cash on hand

            Know what is in your bank accounts and check for fraud

            Be aware of expenses and income for today

Things to Check Every Week:

            Record customer billings and payments

            Pay vendors

            Record payroll and or contract labor hours

            Check To Do List for purchases needed for studio work

            Send any invoices to keep cash flowing

Things to Check Every Month:

            Balance your checkbook(s)

            Review any past due payments

            Check inventory for sales if needed

            Add new artworks and prices to your art inventory system (ie. GYSTPro)

            Check in with your gallery or retail outlets re: inventory, sales, etc

            Review cash flow

File or scan all receipts and paperwork

Review month end balance sheet

Things to Check Quarterly:

            Review annual profit and loss estimates (review against last year)

            Make quarterly payroll payments if needed

            Make quarterly sales tax payments if needed

            Make any income tax payments if needed

            Review inventory and update inventory system

Things to Check Annually:

            Review any aged receivables and invoice if needed

            Year end status review

            Pay IRS and state taxes

            Pay sales taxes for the year (if you have not paid quarterly)

            Create full year Financial Reports and review

            Review your tax returns before sending to your accountant

 Review your prices and change if needed

            Create a budget for the coming yea

Feel free to share this article with other artists.

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Useful Words for Artist Statements

Useful Words for Artist Statements

Writing an Artist Statement is often tough for artists, and one of the reasons is trying to be articulate about their practice. Often-used words tend to sound like everyone else, so here are a few active words that might give you some inspiration that can use used instead of "looks" or "seems like" (which you should never use). You want to say something definitive like you know what you are doing. For instance, in a sentence where you are telling the reader what you work does, use one of these words that make sense to your practice.

My work:

addresses

adopts

affects

aggravates

announces

assumes

betrays

broadcasts

challenges

commends

communicates

critiques

declares

designates

determines

divulges

donotes

echoes

emulates

exposes

fakes

feigns

hints

imitates

implies

insinuates

introduces

investigates

mentions

mimes

mimics

mirrors

mocks

notifies

offers

opens

parallels

parodies

parrots

poses

pretends

proclaims

proposes

refers

reflects

reiterates

represents

resembles

resonates

reveals

reverberates

signifies

steers

stimulates

suggests

tells

touts

Got more suggestions? Please add them to the comments.

Feel free to share this article with other artists.

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GYST Audit Update 9-22-14

The audit of GYST and us personally is now somewhat complete, so I thought I would update you on what has been taking place.

I found out that my initial report of 100 new auditors hired by the IRS was incorrect, they actually hired 2000 new auditors to look at Schedule C returns (those who run a small business). Not only did we find that out, but we also found out that the auditor that we were assigned to is still in graduate school and has not even graduated. This explains some of the questions that we were asked, as I don't think she knows fully what she is doing. At least it explains why our auditor was less informed that I expected an IRS auditor to be.

We were continually barraged with additional questions such as what is the markup of the software we sell? We kept telling her that we don't buy and sell a product so there is no markup as she suggested. She badgered our accountant so much that he finally just made up a number just to get her off our backs.

What we did find out though, is that our accountant made an error in our 2012 tax returns. It had to do with a loan we took out. This resulted in us having to come up with a little less than $3000 that we owe the IRS. That in addition to the penalties, which our accountant agreed to pay since it was their error. This is a sign of a good accountant.

Not only did our account spend over $5000 in labor, but we also "spent" countless hours doing this, at least $3000. So in some respects, we are all out a lot of money. We will have to take out a loan in order to pay off the IRS, since they give you only 30 days to come up with the funds (or else).

So our options were to continue to fight with them, since we also had a number of items we could refile and claim that we had never taken off our taxes, such as a home office etc. or stop the madness and pay up. I was always told that a home office is a red flag for the IRS, but I believe I will take that expense off my taxes every year.

There is also no recourse when you get a badly informed auditor, as everyone knows you can't piss off the IRS. I can say that this was one of the most unprofessional experiences I have had with anyone associated with accounting in my long career. I mean, who hires people who are still getting a degree? It seems they hired a bunch of them.

We finally decided that we were not going to save much money and continue to be dogged by this auditor no matter what we did. It seemed easier to just pay the fine and the back taxes at this point, as neither our accountant or us ourselves could stand it much longer. There is only so much crap that you can take. Since the person assigned to our audit as part of our accountants staff was also in school with the IRS auditor, they could not talk to each other.

We wish the saga would end there, but now we find out that this is the federal taxes, and we will automatically be audited by the State of California.

I will add another chapter once that happens if there is anything interesting. Meanwhile, keep up the good work artists, and don't quit working. Thanks for listening.

GYSTInk announces first Twitter Contest - Write Your Artist Statement in 140 characters

Join us on Twitter, and send us your artist statement in this limited format (140 characters) for a chance to win a free GYSTPro software package for you or a friend. Deadline is September 16th to be eligible to win. Feel free to be as serious or funny as you'd like. Please share! https://twitter.com/GYSTInk

GYST Audit Update - 7-23-2014

An update to the ongoing saga of an IRS audit.

We last left you with the report on all the questions we needed to answer and report to the IRS.

We got a response that we had to prove that we took out a loan, and provide documentation. In other words, they didn't believe us. So another hour of work to get the "correct" proof for the IRS.

To add insult to injury, the City of Los Angeles sent GYST a form with estimated business taxes for 2013. They estimated that GYST made almost 2,000,000 (yes, count those zeros) in 2013. Which left the estimated tax at almost 3,500.00. I almost had a heart attach until I noticed that it was an estimate, and that the estimate was so blown out of proportion it would have been laughable, had it not been me.

This required that I go down to the City of Los Angeles Office of Finance. So, an extra three hours and found a parking structure that only charged $8 instead of the $27.00 and something max for the official city parking lot.

I was lucky to get a government worker who was really great. He explained some things I thought I would share with you.

First, even though I had sent in the form with the amount we owed in taxes, it was not recorded in the master city database, and it has been months. Hence the estimated form. We were supposed to get a card in the mail, but we never received it.

He also said that if you pay your business taxes online, they don't tell you this, but you will never get a snail mail notice in the mail again. Which was an issue for us. We attempted to login to the city to renew the license as well as fill out the tax forms but none of the passwords or logins that we were given when we initially signed up were working. Contacting them was even worse. No phone number with a person, and no email. So by the time we got the correct info the payment date was past.

For you creatives in Los Angeles who take the creative business exemption, if you send in your taxes even a day late, YOU ARE NOT ELIGIBLE any longer to claim this exemption. Something no one tells you.

So always mark the due dates for things on your calendar, and never wait until that date in case your login and/or password does not work.

The same thing goes for the State Board of Equalization, the office you send your sales taxes to. As of now, when you collect sales tax, you are no longer allowed to send in pre-payments unless you make over $100,000 a year. So you need to keep track of all your sales taxes and NOT spend it, so you have the money at the end of the year. Sometimes a hard thing to do if you need the cash. Just don't spend it.....

The IRS agent was supposed to meet with out accountant last Thursday, but she called and cancelled. She said she thinks she has everything she needs. No other additional information about when she would get back to us, so we are "cooling our jets" until we know the next move.

Feel free to ask any questions.

Written by Karen Atkinson, GYST Founder