Reptile & Amphibian Forums

This may seem like an obvious question, but I was just curious -- do the 'big guys' or anyone who breeds snakes for a living have to pay taxes on their snakes? I was thinking if that's their livelihood, they would have to pay income tax on every snake they sold? What about small time breeders, with other jobs, who still have pretty high end expensive morphs for sale -- do those sales have to be included in taxes and stuff? At what point do you have to get a business license to continue selling your snakes? This is all just idle curiosity - I don't forsee reaching the point where I don't need a job to support this expensive habit. Thanks for entertaining my pointless questions!

As far as I know if you sell something, you must pay tax. I'm sure a lot of snake sales go unreported, but it should be reported, that is if your honest.

Now if your just selling a pet you have, I'm not sure, but ANY income must be reported to the IRS.

I for one would love to know who does, and who doesn't, report but I don't think I'll get an honest answer.

Any sale over $500 needs to be reported as income - if you sell a bunch of $200 snakes it doesn't count - unless they are all to the same person - in one transaction. The figure may have changed in the past year but thats what it used to be. Good news is if you are declaring income from your snakes you also get to write off expenses - lots of them!!!!
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Tosha

"Nihil facimus sed id bene facimus"

7.33.0 Ball Python (Harry and Fluffy and gang)
1.0.0 Angolan Python (Anakin Skywalker)
0.0.1 Green Tree Python (Verdi - yeah I know but my kids love the book)
0.2.0 Feline (Pippen and Pandora)
0.0.1 Desert Tortoise (Pope John Paul aka JP )
2.2.1 Fish (1,2,3,4)
0.0.2 frogs rescued from pool skimmer

>>Any sale over $500 needs to be reported as income - if you sell a bunch of $200 snakes it doesn't count - unless they are all to the same person - in one transaction. The figure may have changed in the past year but thats what it used to be. Good news is if you are declaring income from your snakes you also get to write off expenses - lots of them!!!!
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It may differ from state to state, but I was once told if you sold a certain amount or more on a particular hobby over the course of the year (doesn't matter how many transcations), you had to claim that income. If you sold less than the amount, you didn't have to worry about it. I had inquired once with our state about a decade ago in regards to participating in a craft fair. Regs have probably changed a bit over the years, but the figure may be closer to around $700 or something like that now (unless of course each state is allowed to set whatever limit they want). I'll have to try to remember to ask a coworker tomorrow since she occasionally makes dance costumes for people on the side and has to claim it on her income taxes (depending on the detail, some go as much as $250-300 each).
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PHWyvern

Actually you are on the right track. I think its somewhere around $600 to $800 dollars, to federal income, and it varies from state to state. Also some states will not care if you sell to someone in another state, but here in Alabama, you must pay sales tax on any sale to anyone (even people selling on ebay from Alabama are suposed to pay sales tax is its over about $600 total in a year). Whats more in Alabama consumers have to pay sales tax for anything they buy out of state and bring back to Alabama for any amount of money. Crazy huh? Most people dont bother paying taxes on their sales, and most sates could really care less... but dont push it. If you have a garage sale and make $400... they dont really care... if you have 6 garage sales and make $400 each time... they care. They have much bigger fish to fry than someone shorting them 1% of $2000 a year. Not only that to prove anything they would have to setup a sting, or find paperwork/bank transactions.

That was a long answer, but still the same. Yes. You do need to pay taxes on anything you sell, check with your local court house to see how much and where the bar is set. Where I live you have to get a building permit to build any kind a building that can be inhabitable... I went to get a permit and they wanted to know why I was wasting their time, and told me to buzz off... yes I got it in writing... the building was over 1000 finished sq feet... some places really dont care one bit what you do just as long as they get to lunch on time.

Ben

Thanks for all the replies...I'll keep that in mind in two years when I am a huge breeder earning about 2 mil a year. Don't worry, I won't forget the little people!

In addition to raising snakes (just back after a 15 year hiatus) for the past two years, I'm a fulltime Powerseller on ebay. That's my job and livlihood. I take certain deductions on taxes, and report the income from that. The snakes haven't shown a profit yet, but may in '06, so they're big deductions. As to what I deduct and what I pay, obviously that's between me and Uncle Sam.
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1.1 Blackheaded pythons
1.1 Woma (Juvie female)
2.1 Aussie Olives
1.1 Timors
1.0 Angolan Juvie
1.1 Savu
1.1 Juvie Bloods
1.1 Juvie Balls
1.1 IJ Carpets
1.1 Coastal Carpets
1.2 Macklotts
1.1 Papuan Olives
1.0 Jungle Carpet
2.2 Scrubs (on breeding loan)
0.1 Jungle/Diamond cross
0.1 child, CB
0.1 wife, WC

you also get to claim expenses! So you can deduct mileage on your car (keep a log) at a set rate whenever you go to pick up rodents, animal food & supplies, go to herp meetings, expos, anything at all that contributes to your business. And of course there are a million other expenses too, such as office supplies, telephone, portion of electricty, the cost of various other supplies and new animals, etc, etc, etc.

Considering the fact that you would probably pay a lot of these expenses anyway, just to enjoy your hobby, it can be worth the paperwork of doing it as a business.

I believe you can also deduct expenses if it is an income producing hobby, but only up to the point of the amount the hobby produces (no net loss). If it is a business, you can actually lose money and count it against your regular job, at least for a while. The IRS DOES expect you to make a profit most years.

But my CPA is the one with the details, so don't take this info as professional advice, lol! But check it out for yourself to see if it will benefit you to claim both income and expenses for your hobby / business.

I think you can only claim a loss for 3 years....then it's just no profit, but as Kathy says...check your accountant.
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1.1 Blackheaded pythons
1.1 Woma (Juvie female)
2.1 Aussie Olives
1.1 Timors
1.0 Angolan Juvie
1.1 Savu
1.1 Juvie Bloods
1.1 Juvie Balls
1.1 IJ Carpets
1.1 Coastal Carpets
1.2 Macklotts
1.1 Papuan Olives
1.0 Jungle Carpet
2.2 Scrubs (on breeding loan)
0.1 Jungle/Diamond cross
0.1 child, CB
0.1 wife, WC