Arts/Crafts Business/Using characters and images on jewelry.
Hello, I'm hoping that you can help me with a few questions I have.
What are the laws on using characters, quotes, images and such from brands? If I were to start a small shop and sell jewelry and crafts, am I allowed to use popular characters? I searched online but there are so many 'rules' and different opinions, it's hard to differentiate from what's right and wrong. A lot of people are saying it's illegal to use characters but how are others selling them at shops like Etsy, did they have to get permission?
Also, how would I pay taxes on my earnings? Do I just need to keep track of all my earnings and then report it when it comes to tax time?
Are there any permits I need to start selling? I'm not going to sell food but I want to make sure there isn't any other permissions I need.
I hope you can help me find the answers or if you know of any other sources for help on starting a business I would appreciate those as well. Thank you in advance for your response.
First of all just because people are using popular characters on their handcrafted items doesn't mean they are doing it legally
. It just means they haven't been caught yet if they aren't doing it legally.
Big companies that catch anyone using their characters could just ask them to stop but more likely big companies like Disney could sue for their loss of profits, your infringement on their rights, etc. Potentially costing anyone using their characters illegally way more in legal costs and fines than they've ever made from selling their crafts.
Big companies have their products protected legally, they have lawyers on hand at all times, and money to fight till they are satisfied possibly destroying anyone who dares to use their designs illegally.
It is not worth the risk to use designs created by any other person without their permission.
How to get permission is a whole other story. Most companies have their own policies and websites with contact information. I suggest you go directly to the company and ask them their policy on using their characters. You may find some are out of your reach but may find some with policies you can work with.
The permits and licenses required for selling crafts are different for every city, county, and state so calling your city offices is the best way to know what is required in your area.
Visit Art Fair and Craft Show Business License Requirements at http://www.extravaganzacrafts.net/blog/post/3426623
and License Requirements for Art and Craft Show Businesses at http://www.extravaganzacrafts.net/blog/post/3156706
Again each city, county, and state will have different requirements and collect different amounts. Then there are federal income taxes as well. While talking to their offices ask if they require that you collect and pay sales taxes at arts and crafts shows. Ask them for the forms you need to do so, what percentage you must collect etc. Ask them about your area's laws for selling items online and if you will need to collect sales taxes for those items as well.
Most states have websites so search for "Your State Name Taxes" then refine the search if you don't find what you need.
Don't miss Starting Your Art or Craft Business-Legal Requirements for Getting Started for more information from the IRS regarding paying taxes.
Often crafters choose to collect and pay self employment taxes quarterly which avoids having huge amounts of taxes due all at once.
I hope that has been helpful,
The Extravaganza Craft Productions