Can a Comp Team Be Considered a Business?

[chilepeppa]

Quick question,
Can a competition team considered a business if all you do is compete in KCBS comps?
I ask only as our team must be considered a business in order to buy from a purveyor.
There is virtually no place in my location to buy choice meats.
Thanks,
Jim

[goodsmokebbq]

Careful what you ask for, my “friendly” neighbor claimed I was running a catering business out of my house (they really don’t believe there is such a thing as competition BBQ) and as such my trailer was a commercial vehicle and could not be stored on residential property (she is an out of work lawyer). I had to go through 3 layers of people at the zoning board to convince them it is just a storage trailer for my addictive hobby. If my team was a business I would be in violation of the zoning code and have to store my trailer somewhere else.

Your codes will be different, so check, just wanted it on your radar.

[paydabill]

Most generally they are a hobby. Now if you start selling some sauces and or rubs, then part of your hobby becomes an advertising/marketing expense. I would talk to you tax official.

[Alexa RnQ]

Unless you win enough to show a profit at least once every three years, and declare earnings against expenses, the IRS is going to call it a hobby.

I think a better question would be what documentation that vendor requires you to produce in order to buy from them -- business or retail license?

[Jacked UP BBQ]

As far as ordering goes, you can just tell them that you are a vendor, use your team name and tell them you do street fairs. Around here, if you have the basic gift of gab, you can get anything you want from purveyors. They do not like to turn away business. Keep in your head as you are talking to them they need you more than you need them, if they say no the next guy might say yes.

[The Pickled Pig]

Register with your state as a business (sole proprietor) and get the sales tax and withholding certificates. Then register with the feds to get a TIN. Those docs will get you in any doors.

In KS, it's free and easy. You'll have to complete tax forms every January but that's really easy if you have no withholding or revenue to declare.

Now, if you buy something using your sales tax exemption and use it rather than sell it, you'll need to pay a use tax or you could get into trouble.

[CivilWarBBQ]

Paul has it right, it's the Tax ID that wholesalers want in order to stay out of trouble with the Revenue Boys. Wholesalers have no mechanism for paying sales tax, so they are allowed only to sell to customers who will supposedly be reselling at retail (and charging the end-user sales tax).

Get some advice from your tax lawyer/accountant. State Revenue agents are infamous for their random acts of extreme enforcement, so make sure you have paperwork on hand that will satisfy them.

EDIT - If you do go for a business license, a good way to structure yourself is to create TWO entities: the business where you run any for-profit catering and a not-for-profit cook team which is sponsored by your business. Solves both tax issues and any potential hassles with the Highway Patrol demanding to see your commercial driver's license because you are driving a "commercial" rig.

[Balls Casten]

I am guessing what the purveyor is looking for is insurance on your part. Their insurance company will not let them sell to anyone that does not carry their own insurance, as does ours although in a different business.
Check to see what they are needing. It may be cheaper than you think.

[Podge]

Yup !!.. anytime I have a serious tax question, the first place I head to is a BBQ forum.

[Mike - CSBBBQ]

Originally Posted by Podge

Yup !!.. anytime I have a serious tax question, the first place I head to is a BBQ forum.

LOL Whatever you need to know you can get it here

Anyway...spoke with a tax guy last year and formed an LLC...according to him it is okay (hope so). Did do a couple of small catering deals last year. After almost 27 years with the BOP don't want to end up on the other side

[Smokin Mike]

Originally Posted by The Pickled Pig

Register with your state as a business (sole proprietor) and get the sales tax and withholding certificates. Then register with the feds to get a TIN. Those docs will get you in any doors.

In KS, it's free and easy. You'll have to complete tax forms every January but that's really easy if you have no withholding or revenue to declare.

Now, if you buy something using your sales tax exemption and use it rather than sell it, you'll need to pay a use tax or you could get into trouble.

you are right paul, but I take one extra step, I LLC every business I have, only 120.00 extra. (my cousin in law?? is a lawyer and recommends it, so I do it, I will admit it, really don't know why for a team)

[chilepeppa]

Thanks for all the advice; I really appreciate it.
This truely is a great community.
Jim

[chilepeppa]

Originally Posted by goodsmokebbq

Careful what you ask for, my “friendly” neighbor claimed I was running a catering business out of my house (they really don’t believe there is such a thing as competition BBQ) and as such my trailer was a commercial vehicle and could not be stored on residential property (she is an out of work lawyer). I had to go through 3 layers of people at the zoning board to convince them it is just a storage trailer for my addictive hobby. If my team was a business I would be in violation of the zoning code and have to store my trailer somewhere else.

Your codes will be different, so check, just wanted it on your radar.

Thanks for the heads up GoodSmoke.
Our very first KCBS comp ever will be Roc City ribfest. Planning on taking the KCBS judge class also.
Hope to see you there.
Jim

[Podge]

Originally Posted by Mike - CSBBBQ

LOL Whatever you need to know you can get it here

Anyway...spoke with a tax guy last year and formed an LLC...according to him it is okay (hope so). Did do a couple of small catering deals last year. After almost 27 years with the BOP don't want to end up on the other side

I guess what I was getting at, is that you wouldn't go to a CPA to ask how to BBQ.

[Scottie]

Originally Posted by Podge

I guess what I was getting at, is that you wouldn't go to a CPA to ask how to BBQ.

But my CPA really likes BBQ.... I agree with you Podge. It's funny that all the tax attorneys that I work with, say don't do it. Why raise a flag? So I don't...