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Forum topic by FredIV posted 03-08-2012 05:14 PM 1638 views 0 times favorited 14 replies Add to Favorites Watch
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FredIV

115 posts in 1076 days


03-08-2012 05:14 PM

Topic tags/keywords: question

I have a question regarding whether or not to get licensed for woodworking? I’ve been woodworking for the past few years but am now reaching an uncharted territory for me….building furniture on commission. I’ve built pieces for friends and family before but now I am beginning to receive a lot of referrasl and word of mouth requests.

I’ve spent 20 years or so in the advertising and marketing world. Therefore, this sort of work is relatively brand new to me. Do I need to invest in a license if I’m just making hutches, tables, bookshelves, etc? I won’t touch plumbing, structural, and electrical jobs. But want to cover my buttocks if need be, providing it’s necessary.

Just throwing it out to all of you experienced guys and gals.
Thanks,
FredIV


14 replies so far

View TCCcabinetmaker's profile

TCCcabinetmaker

925 posts in 1040 days


#1 posted 03-08-2012 05:18 PM

You need to check up on your local statutes, they are different everywhere, some places you will need to be, others you won’t. Also if you live in some areas, unless you want flat tires and busted out windsheilds (yes it still happens) you’d best join your union as well if you’re going full time.

-- The mark of a good carpenter is not how few mistakes he makes, but rather how well he fixes them.

View CharlieM1958's profile

CharlieM1958

15706 posts in 2904 days


#2 posted 03-08-2012 05:20 PM

I don’t think a license is really the issue. The question would be whether or not you want to form some sort of LLC or sole proprietorship to keep your personal assets distinct from your business dealings.

I’d think it is something you should probably discuss with a lawyer in your own state.

-- Charlie M. "Woodworking - patience = firewood"

View DS's profile

DS

2131 posts in 1106 days


#3 posted 03-08-2012 05:26 PM

Most juristictions require a business license for the collection and payment of sales tax, or, privelidge tax.
Also, if you do contracting in construction, you usually would need a contractors license which also may require a bond. If you stick to free standing furniture, that is usually exempt from a bond or contractors license.

You may notice I am using terms like ‘most’ and ‘usually’. Every place has different gov’t requirements and you will need to check your local laws to know what is required for you. I am not an attorney, nor am I otherwise qualified to give any legal advice. Even if one was, I doubt you will find them giving legal advice on this forum.

Your profile doesn’t even state if you are in the USA, so it is a little more difficult to stear you in the right direction. Best of luck to you though.

-- "Hard work is not defined by the difficulty of the task as much as a person's desire to perform it.", DS251

View FredIV's profile

FredIV

115 posts in 1076 days


#4 posted 03-08-2012 05:36 PM

Oh yeah, I forgot to mention that I’m a New York resident, Long Island more specifically. NY is the worst for laws, stipulations, etc, etc.

View TCCcabinetmaker's profile

TCCcabinetmaker

925 posts in 1040 days


#5 posted 03-08-2012 05:49 PM

Best join the local union then, they’ll give you a test and what not to see how “qualified you are”.

-- The mark of a good carpenter is not how few mistakes he makes, but rather how well he fixes them.

View Loren's profile (online now)

Loren

7720 posts in 2333 days


#6 posted 03-08-2012 06:16 PM

Get the book “Small Time Operator”. The answers are in there.

-- http://lawoodworking.com

View Tennessee's profile

Tennessee

1466 posts in 1200 days


#7 posted 03-08-2012 07:22 PM

I don’t know if you are in a right to work state, if so you can forget the union. If not, you may have to join to make and sell furniture. Weird. Where I live in Tennessee, there is a limit you can make as “additional income”, like if you mowed a few lawns over a summer for money, or made a few things for people for money. It is a 12 month average. Some months I was above, some below, but in December last year I blew past it.
When I got to that point, I went to a lawyer, got my Sole Proprietorship, Tax ID, City License, and bought a small umbrella policy for all my tools and inventory, as well as liability insurance and all kinds of coverages for possible problems even I didn’t think possible. It was all very straight forward and not hard at all.
It sounds expensive, but the lawyer fees for all the SP and licenses was only $200, and my insurance coverage for a small business is only $551 a year. This way, I have up to $2,000,000 coverage on claims, and $10,000 per incidence if anyone gets hurt by my stuff due to my design fault, or comes in my shop and cuts themselves. I don’t let anyone in my shop save for my wife, so it was low. I don’t know how New York is, but for me, I now feel much better, my accountant is happier, and I can feel free to advertise anywhere, since now I am totally legal as a business, where before I was always dancing just below that “additional income” law, and yet didn’t really have any insurance. If you are serious about making things for others, even part-time, get legal.

-- Paul, Tennessee, http://www.tsunamiguitars.com

View NathanAllen's profile

NathanAllen

376 posts in 1830 days


#8 posted 03-08-2012 10:19 PM

Depends if you’re also going to be doing work closer to carpentry than “x”-making; built-ins, stair componants, landings, kitchen cabinets, etc.

If so, better safe than sorry, what happens when a customer asks you to do a handyman type replacement on a lightswitch or can light? You’ll either have to explain to them that’s not something you do and possibly losing future business by not being a “I’m your pal” contractor or putting yourself a financial risk.

However, if you’re focusing only on free-standing furniture, making sure your homeowners or other property insurance covers what happens if someone picks up a hutch and manages to drop it on their foot.

View derosa's profile

derosa

1556 posts in 1521 days


#9 posted 03-09-2012 01:20 AM

I’ve never heard of a union for furniture but wouldn’t be surprised by it down where you are. If you are gonna get serious about it then get a business license and a tax number, if only the occasional then you could call what you do art and sell small time.

-- --Rev. Russ in NY-- A posse ad esse

View Mainiac Matt 's profile

Mainiac Matt

4136 posts in 1014 days


#10 posted 03-09-2012 02:39 AM

I’m sooooooooooo glad I live in a free state.

“License? We don’t need no stinkin’ license”

Join a union to be self employed? Is it just me, or does this make no sense.

If you’re worried about getting sued, or want to File Your taxes as a small corporation instead of a sched. A sole prop. ( i.e. You don’t want to pay 15% FICA on your wood working income), then set up an LLC.

Small Business’s for Dummies is another good book.

-- Pine is fine, but Oak's no joke!

View HalDougherty's profile

HalDougherty

1820 posts in 1923 days


#11 posted 03-09-2012 11:27 AM

Here’s a couple of reasons why I enjoy a very small woodworking operation. The bottom two paragraphs are just part of a larger document from a Tennessee Govt. website. I pay sales tax on everything I buy and only sell products from my farming operation. It’s been a family business since the 1800s when it was a working farm. We stopped raising cattle and cash crops, but we’ve never stopped selling our hay, so now I’m harvesting grass and trees and selling the processed products of my farm. Here’s a link to the Tennessee Govt. website about sales of farm products.

————————————————-

49. Are farmers and nursery operators who buy and sell agricultural products, including livestock, required
to present the certificate of exemption to buy agricultural products, including livestock, tax exempt or obtain
copies of purchasers’ exemption certificates to sell agricultural products tax exempt?

No. Agricultural products grown and produced by a farmer and purchased directly from the farmer that grew or produced the agricultural products are not subject to sales or use tax. The farmer is not required to obtain the Agricultural Sales and Use Tax Certificate of Exemption to make tax-exempt sales of agricultural products that the farmer grew or produced. The Agricultural Sales and Use Tax Certificate of Exemption is required to make taxexempt purchases of machinery, repairs, and certain supplies for use by a qualified farmer, timber harvester, or nursery operator.
———————————————————————
55. I cut the trees from my own farm, have the lumber sawed, and my family makes birdhouses, baskets, and
similar crafts. Should I charge the tax on these items?

No; as long as these are created from wood from your farm, they are not taxable. However, if you buy the lumber and other components from a supplier, the sale of the home-made craft is taxable.

-- Hal, Tennessee http://www.first285.com

View DIYaholic's profile

DIYaholic

13752 posts in 1361 days


#12 posted 03-09-2012 01:02 PM

You are on Long Island, NY. Get insurance!!!!!!

Former LI’er transplanted in Vermont.

-- Randy-- I may not be good...but I am slow! If good things come to those who wait.... Why is procratination a bad thing?

View dbray45's profile

dbray45

2536 posts in 1462 days


#13 posted 03-09-2012 01:36 PM

From what I know about NY, you will be taxed beyond belief. You may need to get permits for finishing materials, business, bonding, insurance, etc… NY is also big on unions and since you are non union, expect to be inspected for OSHA stuff. You will need a wall for posting this and that, install a water wash for eyes and a good first aide kit – just to start. Depending where you are, there may actually be zoning against what you are doing. As a hobby, you are exempt from much of this.

Keep really good records, under federal law you have a hobby if you are not turning a profit. It takes a lot of revenue to turn a profit, You need to speak with an attorney first.

-- David in Damascus, MD

View FredIV's profile

FredIV

115 posts in 1076 days


#14 posted 03-09-2012 10:08 PM

Thanks all. The wife is the sole bread winner these days. (thankfully). I doubt I will ever be able to make a living at this, more like a hobby but just wanted to cover my own ass as I’m sure there are horror stories out there. After reading all of the sage advice, I will be sure to contact a lawyer for consultation and my account for additional advice.

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