Your Band Your Business

You have a band, you have a name and you are performing at various gigs and functions.  You created merchandise to sell and have begun receiving compensation for performing live.  Believe it or not, you are now in the business of music and you now must treat your band as such.  Your band is your business and your music is your product, and believe it or not, the government views it that way as well.  So now it is time to turn your band into a legal business that has a license to conduct business.  So that’s a bit ominous to think of a business and report earnings, wages and income but there is other extremely important functions for you to consider creating a business of your band.  The business name you choose for your band will be used wherever you perform or conduct business.  Clubs or any other music business entity will need your business information for their accounting and reporting needs.  This legal business name will follow your band throughout your career so it is vital.

Obtaining a business license is a matter of contacting your city hall and/or government offices to obtain the forms to apply for a business license.  In the music business, often the name of the band isn’t the legal name or entity.  For instance say MyBand is applying for a business license, instead of registering MyBand they register MyBand Touring, Inc.  When approved a certificate is issued at what is represents is that the company MyBand Touring, Inc. is doing business as (d/b/a) MyBand (the band’s name) and the address of where the business is located.  So choosing a legal business name for you band can be varied and different from your bands name it doesn’t have to include your bands name the business entity’s name.  What matters is that no other business is doing business under the name that you choose.

The next step after obtaining a business license is to obtain a tax ID number.  This is necessary in running your band as a business in a proper and legal manner.  Many bands upon starting out do not realize that they must report earnings or loss to the government as well as pay sales tax on merchandise that they sell.  But as your business grows and your band begins profiting more and selling more merchandise, if you don’t report these earnings to the government your band could be in for a world of trouble down the line.

Once a tax ID number has been obtained, begin tracking all expenses and earnings your band makes.  Remember your band is a business and must be conducted as such.  The cost of band equipment, insurance for band equipment, promotional materials like flyers and photos and even travel or touring expenses like gas, auto insurance, hotel and meals should be documented.  These are considered costs of doing business and are tax deductible when reporting to the IRS.  If you are like every ordinary citizen of the United States, taxes can be confusing so it might be wise and suggested to seek the advice and council of an Accountant who understands the tax laws and inform you of what needs to be reported.  Also ask how to submit sales tax from the sale of any merchandise and report it at the end of the year.

Having a legal business and tax ID number will become more and more important as your band begins to progress and earn more money.  Should your band land a local opening spot on national touring artist’s show that Artist, promoter and/or venue all will want your legal business name and tax ID number for reporting purposes as they have to report that they paid your band and you must report that you got paid.

By treating your band as a business early in your band’s career, will go a long way to understand and managing your business as it grows and expands.  Also if you treat your band as a business then the businesses that will contract your band will also treat you as a business and not just another band that doesn’t have it together.

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