Greetings! I couldn’t find much information about how to set things up to legally sell books under a pen name in Ohio, so I thought I’d write up a guide here. Obviously, if you don’t live in Ohio, only some of the below might apply, but Ohio-specific information seemed scarce, so I thought this might help 🙂 I am not a lawyer, but I did consult with one before writing this guide. This guide is not to be construed as official legal advice, since I am not a practicing attorney. If you have any doubts or concerns, please consult a lawyer; many will do an initial consultation for free or cheap.
So! Let’s say you’re a self-published author, like myself. You have a stack of books in a box someplace, and you’d like to sell them to the public — maybe at a flea market, or a book signing, or a convention, or any other place where you’re selling them yourself (and thus responsible for the sales tax) as opposed to through a third party (like a bookstore). How can you do so in a way that gets the state their tax money without costing you an arm and a leg? That’s what my guide is here to answer.
Step one: Form a business entity
The first thing you’ll need to do is to figure out what type of business to form. I know it sounds intimidating, but for most people, this is the easiest part of the whole process. You see, in most cases, you can just form a Sole Proprietorship, which requires $0 and not a single form to fill out. A Sole Proprietorship basically means a single person owns the entire company, and there is no legal distinction between the owner and the business. You receive all the profits, but you’re also responsible for all the debts if something goes wrong. Luckily, in this case, we’re not going to be racking up a whole lot of debt, or incurring much legal liability that you could get sued over.
If you are worried about debt or being sued, you might want to form a Limited Liability Corporation, or LLC. This, however, is a bit more complex, and out of scope for today’s guide since I’ve never done so. If you are working with a partner, you can form a General Partnership, which is similar to a Sole Proprietorship but with multiple people. Again, that’s out of scope for today’s guide, and I can’t offer much more advice than that.
The next decision to make is what name to operate under. In most cases, you’ll want to operate under your legal name, because that requires $0 and no forms. Easy as pie! That’s what I opted to do, at least for now. If you want to operate under a name, to sound more like a business, you’ll need to file a Name Registration for either a Trade Name, which is reserved for your use alone, or a Fictitious Name, which other people could use so long as they’re not trying to impersonate you. The cost for this (as of now) is $50. This is the same thing that other states call a “Doing Business As”, or DBA; we just call it a Trade Name instead.
The lawyer I spoke with assured me that as long as my pen name is not an attempt to impersonate another person, it’s totally fine to put Jane Bailey on my business cards and do business under my legal name. So even if you use a pen name, it’s probably simplest to use your legal name as the name of your business identity. You will also be able to use your Social Security Number for taxes instead of filing for an Employer ID Number, which is one less form to file.
Step two: Obtain a vendor license
The next thing to do, now that you’ve set up your business, is to register to be able to pay sales tax. To do this, you’ll need a Vendor License. If you don’t have a storefront, which is true in this case, you’ll need a Transient Vendor License, which costs $25. You can sign up in the Ohio Business Gateway and file this form electronically. You’ll put in your bank account information and the whole thing can be over in half an hour. Tadah!
Step three: Pay sales tax
After you’ve sold some books, you’ll be returning to the Ohio Business Gateway to pay your tax. Chances are you’re signed up for semi-annually, so this’ll be every six months, but check to make sure just in case, as some businesses are quarterly or monthly.
You’ll need your Vendor License number. This, for me, was the hardest thing to find; I eventually found it by going to my history, looking up the Vendor License application, and clicking “Print” to print a hard copy of my license. In the resulting PDF, the number was right at the top.
From there it’s pretty simple. You’ll need to enter what county you did sales in, and how much in each county, and then calculate the tax owed and enter that. You can pay online the same ways you paid for your vendor license, including via credit card (for an additional fee) instead of bank draft.
And there you have it! Legalities all squared away.