1. SapereAude

    SapereAude Contributor Contributor

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    Why NOT to register your imprint as a trade name

    Discussion in 'Self-Publishing' started by SapereAude, Oct 7, 2021.

    Or: No good deed shall go unpunished.

    I made use of my COVID-19 stay-at-home time earlier this year by self-publishing three books. I used my name as the author but, rather than also using my name as the publisher I chose to honor my maternal great-grandparents and adopt as my "imprint" the name my great grandmother used for the property on which my house stands.

    Something I read somewhere said that if you use an imprint, you should file with your town clerk to register the trade name. So, being the former Boy Scout that I am, I did that.

    And a couple of days ago I received a form from the tax assessor, asking me to declare all the physical assets of the business -- so the town can tax them. The only physical assets I use in connection with the publishing are a 30-year old office desk and a seven year old computer that isn't up to snuff to run Windows 11, so it has essentially zero value. And the usage each gets that's related to the publishing is probably 10 percent or less of total use. These are my personal desk and computer.

    I declared each with a depreciated value of zero and a residual value of $50. I'm sure I'll get an argument about that.

    I shouldn't have registered the trade name. The unfortunate reality is that I have now probably opened the door to allowing the tax assessor to have a legal excuse to come into my private residence and start poking around for things she can tax.
     
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  2. Xoic

    Xoic Prognosticator of Arcana Ridiculosum Contributor Blogerator

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    Damn! Good to know. Thanks for sharing your real-life horror story so the rest of us might avoid such a situation.
     
  3. Catriona Grace

    Catriona Grace Mind the thorns Contributor Contest Winner 2022

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    Wow. That sucks. Appreciate the heads up.

    Both my husband and I have dba names, but we've not been invaded by the mighty IRS thus far (knock on wood and toss salt over my left shoulder into the face of Satan), perhaps because we've filed years of income tax returns for both businesses.
     
  4. Lazaares

    Lazaares Contributor Contributor

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    Interesting. How come you chose to register a trade name and not just go with a simple notary-supported confirmation of the pen name's association?
     
  5. Steerpike

    Steerpike Felis amatus Contributor

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    Was this a fictitious business name? A registration like that doesn't offer a lot of protection for the trade name. If you really want to protect it, a federal trademark registration provides the greatest protection (but will cost you a few hundred dollars). A federal trademark registration also won't summon the tax authorities to your door that I've ever heard of.
     
  6. SapereAude

    SapereAude Contributor Contributor

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    I'm not sure what you mean by "fictitious." My ancestors hailed from a region in Scotland. Great Grandmother named her farm after that region. I live on the last tiny corner of her farm that remains in the family, so I decided to adopt the name as an imprint. I don't expect to be producing any international best sellers, so I didn't feel like expending the time, effort and money to pursue state or national registration of a business name or tradename (which is different from a trademark).
     
  7. SapereAude

    SapereAude Contributor Contributor

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    Not a pen name. I write under my own name. This was an imprint, i.e. a name for the publisher.
     
  8. Steerpike

    Steerpike Felis amatus Contributor

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    A Fictitious Business Name statement is a filing you make with the local government to tell them that you're doing business under a name other than your own (i.e. a DBA). I was just asking out of curiosity about exactly what you filed to protect the trade name.
     
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  9. Andrae Smith

    Andrae Smith Bestselling Author|Editor|Writing Coach Contributor

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    Thanks for sharing your experience. Depending on where you live, you may want to research the tax guidelines for new businesses. By registering your trade name/publishing imprint, you have indicated that you have a business or consider yourself one at least in terms of how you operate in a publishing sense. It should be no issue to declare your computer and desk as you have.

    If you intend to legitimize your publishing imprint as an entity separate from you, it still may be worth it to read up on how to start your own small publishing company or register for your own EIN attached to it. I can't fully break down how, as I'm learning a lot of this myself as I transition from freelance editor to business owner and start to establish my work as a business separate from myself. (I don't just write and publish my own work and I'm moving from 1099 contracting to coaching, author services, and publishing, so it's a bit different in my case.)

    Many authors simply go for the DBA and EIN to track any financials pertaining to that aspect of their business.

    But getting back on track, as an indie author with hardly the makings of a company, there shouldn't be any recourse for only declaring a desk and computer with a value of $50. This may be different when you grow. The best REAL advice I have for you is to consult a tax professional when you file. I would recommend this anyway if you have income that is outside of a standard w-2 employment.

    (Caveat: My knowledge is grounded strictly in US terms. I'm not familiar with taxation or business laws for any other country. ha ha!)
     
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  10. SapereAude

    SapereAude Contributor Contributor

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    My state (U.S.) has a form called a 'Trade Name Certificate." I suppose that's similar to a dba declaration.
     
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  11. Friedrich Kugelschreiber

    Friedrich Kugelschreiber marshmallow Contributor

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  12. SapereAude

    SapereAude Contributor Contributor

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    The sorry saga continues.

    My publishing is a hobby; I have a day job. My books haven't earned enough in royalties to even pay for purchasing the ISBNs. But the fact that I filed a trade name certificate has the tax assessor convinced that I am running a business. When she sent me a form on which to declare the "assets" of the "business," I listed my 10-year old computer and 35-year old desk as having a depreciated value of zero and a residual value of $50 each.

    She doesn't like that. I received an e-mail today informing me that I didn't fill out the form completely, and demanding that I resubmit.

    The moral of this story is, indeed, that "No good deed shall go unpunished." I should NOT have registered the trade name.
     
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  13. big soft moose

    big soft moose An Admoostrator Admin Staff Supporter Contributor Community Volunteer

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    Just fill it out properly - the tax people are used to business that don't turn a profit immediately (as you'll know from your other ventures hardly any business make bank in year 1).

    The assets of the business include the copyright to the books with the value assessed based on the actual or potential sales, the isbns, etc

    If you're selling books, you are doing business regardless of whether that business is a success, so the tax assessor is right.
     
  14. SapereAude

    SapereAude Contributor Contributor

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    I'm not writing as a business, I write as a hobby. I have a regular day job. I live in a small town, and my tax assessor clearly could not make the mental leap that registering an imprint does not automatically equate to creating a "business." In a post above, Steerpike wrote:

    In my state, the form is called a "Trade Name Certificate." Apparently, although there was nothing about this on the town's web page where I downloaded the form, the tax assessor regards a trade name certificate as being the same as a d/b/a declaration. I had no way of knowing that, and I certainly had no intention of declaring that I was open for business. I just wanted to declare the name, as protection (at a very low level) in case someone down the road starts using it and then wants to force me to stop using it. Considering the very limited level of protection registering the name on the municipal level provides, I now regret having done so.

    She sent a very specific list of things to declare if I had them, and intangibles such as the value of copyrights, ISBNs, or future potential were not included. The tax is on property, not the appraised value of the "business."

    At this level, that's like saying that anyone who conducts a tag sale is running a business.
     
  15. big soft moose

    big soft moose An Admoostrator Admin Staff Supporter Contributor Community Volunteer

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    There's no getting away from it publishing is a business... the fact that you're not making much money just indicates that business isn't very good...

    its not the same as running a tag sale... most people having a yard sale wouldn't create a business name for their yard sales and pretend to be a bric a brac company.

    The reason the tax assessor equates a trade name registration with a DBA is that Trade def "the action of buying goods and services"ie a business... people don't register trade names for their hobbies.

    somewhere along the line you can also expect them to mention this to the IRS and for you to have to account for your profit and loss on income when you do your taxes
     
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  16. SapereAude

    SapereAude Contributor Contributor

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    ^^^ The problem is that all this comes to light after I made the mistake of registering the "trade" name.

    I wish I could remember where I read the advice to do so. Over the first few months of this year I spent a lot of time on the Internet, reading everything I could find about self publishing. I have no idea at this time which site it was that advised registering the name of your imprint as a trade name, but the context wasn't about establishing yourself as a business, the context was that of establishing at least a first line of protection for the name. And the article definitely didn't mention that a trade name certificate is essentially and functionally the same as a d/b/a declaration.

    All I can do now is lock the barn door after the horse has been stolen: I'll cancel the trade name certificate, and argue it out with the tax assessor over what a fair value should be for the only two items of personal property I have that are used for my publishing: the 10-year old computer and the 35-year old desk -- neither of which was anything like "top of the line" when purchased.
     
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  17. Catriona Grace

    Catriona Grace Mind the thorns Contributor Contest Winner 2022

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    I'm sorry this has been such a hassle.
     
  18. Selbbin

    Selbbin The Moderating Cat Staff Contributor Contest Winner 2023

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    Thanks for the warning. I hadn't thought much about that and while the laws here may be rather different it's something to check for before venturing down this path.
     
  19. big soft moose

    big soft moose An Admoostrator Admin Staff Supporter Contributor Community Volunteer

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    Of course most of us want to establish ourselves as a business anyway... that's why we're self publishing....

    there's something strange at play here in that they are assessing the assets of the business for tax rather than its income... a lot of service businesses hardly have any assets - if you think of a plumber he has his tools and a van... but he makes way more than that in the services he provides.

    On point - I wonder if you misinterpreted the advice given... its not unusual for people to suggest that you register your imprint name as a 'trademark'... to stop a competitor using it after you've spent a lot on establishing it... but as far as i'm aware in the US trademarks are registered nationally with USPTO usually via an attorney... we'll all doubtless recall the wonders of cockygate

    Personally i'd suggest that trademarking an imprint name is only necessary when its actually a business- if its just a hobby presumably you're not going to spend thousands on establishing and promoting anyway, so why would you want to protect the name in the first place.
     
    Last edited: Oct 21, 2021
  20. SapereAude

    SapereAude Contributor Contributor

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    There's nothing strange at all. In the U.S., municipalities (other than a very few huge cities such as New York) don't tax income, they only tax physical property. My trade name registration and the contact from the tax assessor were both at the municipal level. The town tax assessor has no interest in whether or not I have any income, from any source. She is after the tax on the value of what I own.

    I wasn't registering a trademark, I was registering a trade name. As I wrote above: "... the context wasn't about establishing yourself as a business, the context was that of establishing at least a first line of protection for the name." There are three levels at which a trade name can be protected: municipal (the lowest, offering the least degree of protection), state, and federal (trademark). At the state level, reserving a trade name is part and parcel of declaring yourself as a business ... and that's not what I wanted to do. The process of registering a trademark at the federal level is expensive and time consuming, so I elected not to pursue that. I did not misunderstand the advice. The advice was clear ... but it failed to explain the downstream implications.

    Why would I NOT want to protect the name of my imprint? I would want to protect the name so that in the future someone else can't adopt the name and then sue me for damages because I'm using "their" name, even though I was using it first. This has occurred in many instances.
     
  21. big soft moose

    big soft moose An Admoostrator Admin Staff Supporter Contributor Community Volunteer

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    Why would you even have an imprint if you're not running a business... and what would someone sue you for as if you're not running a business they'd have suffered no loss by your use of of the imprint name.

    the problem here is that you've chosen to apply the trappings of a business to what you describe as a hobby, and then expect other people to assume its a hobby, despite looking like a business

    Most of the advice in the self publishing sphere assumes that people want to sell their books at a profit and make money from being an author... if that's not your intention, its not a great idea to follow advice aimed at people for whom it is
     
    Last edited: Oct 21, 2021
  22. Steerpike

    Steerpike Felis amatus Contributor

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    You can also register a trademark with a state in the U.S., though I find that most want the federal registration (for good reason) and many are unaware that states have their own registration systems.
     
  23. Steerpike

    Steerpike Felis amatus Contributor

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    In the U.S., at least, if you're using it first you have priority over a subsequent user (even if they get a trademark registration and you didn't), though your rights will be limited in geographic scope. Not that this is the case where you are--just making the point for those in the U.S. who may be reading this thread.
     
  24. SapereAude

    SapereAude Contributor Contributor

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    I chose to use an imprint name that I felt was a way of honoring my maternal grandfather and his mother, rather than just publish under my name as both author and publisher. Okay?

    Someone else using the same name could sue because they allege that my use of the name creates market confusion and deprives them of sales.

    Quod erat demonstrandum. As I have have stated several times, this point was not mentioned in the article I read that strongly suggested registering the imprint name with your municipality as a way of creating a first level of protection for the name. I didn't expect anyone to assume it's a hobby, but I also didn't expect the town clerk to assume it's a business and rat me out to the tax assessor.
     
  25. big soft moose

    big soft moose An Admoostrator Admin Staff Supporter Contributor Community Volunteer

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    The point i'm making is that the article would have no reason to assume there was an issue that needed to be highlighted because self publishing is by definition a business
     

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