Artists who generate a profit should generally obtain business licenses.
The answer to the question "Do artists register for a license to sell artwork?" is a little more complex than it seems. There is no universal governing body that licenses artists to sell their work, and hobby artists who rarely sell their work needn't register for a business license in most jurisdictions. However, when their art also becomes their business, artists must treat it as such and obtain a business license with the local city, town or county registry.
Comparative Case Study on Micro-Commerce
While exploring the issue of selling art and whether it requires license, it can help to explore the broader issue of micro-commerce. In a May 2000 publication by the California State Board of Equalization, it's mentioned that occasional low-volume sales are acceptable without the provision of a California seller's permit. The document went on to stipulate that if a seller makes three or more sales - including those made through online auction and merchant websites - in a 12-month period, he is then required to hold a seller's permit. Garage sales don't require a license until the seller hosts more than two events a year. This document serves to set a precedent regarding what level of micro-commerce requires a business license for all manner of small-scale merchants, artists included.
Art as an Enterprise
Artists who approach their work as a for-profit endeavor from the start should obtain licensing not only to prevent negative legal consequences but also for the related tax benefits. By plying an art as a for-profit trade, many expenses and forms of business loss become tax-deductible. A digital artist, for example, may be able to deduct some or all of the cost of his computer equipment, while a traditional artist may be able to claim the cost of his art supplies. If the business is conducted at home, some amount of living expenses, such as rent or a mortgage, may be a viable deduction. A detailed exploration of tax laws and other helpful resources are available through the IRS small business and self-employed tax center website. Artists who wish to focus on their profession rather than its economic underpinnings should hire a professional accountant, who will advise them on suitable deductions and assist them in filing taxes accurately.
Tax Code and Local Licensing Compliance
For-profit artists will need to comply with regulations from each of the three levels of government. The federal government is largely concerned with tax revenue; therefore, self-employed artists without employees only need to focus on accurate income reporting. Compliance with state, municipal and county business regulations generally requires the purchase of a business license. Some regions may also impose a local business tax. At the municipal level, business licenses chiefly operate as a way for a city or town to enforce zoning ordinances to ensure that residential areas aren't overly disturbed by small business activities, and that larger businesses are confined to appropriate industrial areas.
Licensing Requirements for Selling at Art Festivals
Many artists sell their work at festivals, which may be stationary events or traveling exhibitions. Art festivals of either sort usually take place over the span of a single weekend. In some cases artists are able to operate under the broader license of the fair, a privilege for which they generally pay a flat fee or a percentage rate of their earnings. Artists traveling with circuit festivals may need to buy regional licenses as they travel from location to location, depending on the laws of the specific jurisdiction. Some festivals get around the laws pertaining to small-scale retail by simply licensing the festival itself, which then sells tokens that are used to purchase goods from the various booths within the festival. The artist would then be compensated with cash for the number of tokens redeemed.
