Disclaimer: This is not a fun post. But hopefully it will prove to be a helpful one to at least someone out there!
A former client of mine on Oahu is in the process of starting her own photography business, and recently came to me for information on the legalities and requirements of starting a business in Hawaii. Photographers can be a competitive bunch — it’s a tough business. But when I was first starting to dip my toes into the wedding photography world five years ago, an incredibly talented wedding photographer in Charleston, SC took me on as an assistant and for the next couple of years provided invaluable guidance — both as I worked solely for him, and as I stepped away to start my own business. There was no reason for him to do this, but I will always be incredibly grateful that he did. I’m always happy for an opportunity to ‘pay it forward’ when the chance comes along!
So. Over the course of several days, I re-traced the steps I took when I dissolved my business in South Carolina and re-started it in Hawaii last year, and put everything in written form to share with her. And since I have it all written out, I thought I’d share it with anyone else out there who might be trying to start a business in the paradise state… Hopefully it will save some time and tears!
This is geared to those starting a photography business in Hawaii, so some of the information is relevant only to that. If you’re looking to start a different type of business in Hawaii, just disregard the photography-related stuff.
- The first step I would recommend is to get your business set up as an LLC (or whatever entity you choose.) When I set my LLC up several years ago, I did it through legal zoom. You do have to pay for this, but not a whole lot and it made it very simple — you complete an online form, and they basically do the rest for you and then mail you your LLC certificate. I’m sure there are lots of other ways to do this besides legal zoom!
- Find a good accountant who has experience with small LLCs (even better if you find one who has experience with other photographers so they have the most accurate info on what you can deduct) to help with taxes
- You will need to get a federal tax ID number
- You will also need to file for a Hawaii GE (General Excise) tax license — info on how to do this in the next step. You’ll need to pay the GE tax semi-annually to start — if they want you to pay on a different schedule (quarterly, for example) after your first year, they’ll let you know. On Oahu, the GE tax is 4.5%, and 4% on Maui. I pay my GE tax semi-annually, so it is due every July 20th and January 20th. When I paid Hawaii GE tax the first time, I filed paper forms and it was a little challenging for me — I’m not a mathematician, and the Oahu GE tax is a bit weird (sort of a percentage on top of a percentage — an accountant could explain that WAY better than me 😉 ) When I paid my GE tax last January, I realized that there is a way to do it online and it was incredibly easy — all I had to do was put in the total amount that I made for that time period, and it calculated it all out, told me how much I owed, and I was able to pay it all online and not have to deal with paper at all. I’d definitely recommend doing it this way. You can find the online link for that here.
- To help keep things organized and simple for tax season, I would suggest getting a separate business account set up as soon as possible (if you haven’t yet) that all business expenses and income pass through, and setting up an online accounting software to track it — I use Wave, which is free and works great. Most of my clients pay me via paypal, which goes to my business account and is tracked by Wave. I have my business expenses (website fees, advertising/marketing costs, equipment costs, etc) also set up to withdraw on a monthly (or how ever often the bills are due) basis from my business account, so all of my expenses are tracked and categorized by Wave, as well. At the end of the year, I can easily pull up reports on income, track the areas of expenses, etc.
- You will need to file for a business license with Hawaii Business Express — they will provide you with your GE tax license number when you do this.
- Professional photographers are required by the state of Hawaii to have 1-million in liability insurance coverage. This is an important step, and you can’t get your film permit (next step) without it. You can get your insurance policy through any agency that you prefer, but I would recommend joining PPA and getting your liability insurance through them. Joining PPA is a great thing to do as a photo biz owner anyway, for heaps of reasons (you can see them all on their website!) but they also have good rates on insurance (provided through Lockton Affinity.) Once you join PPA (which includes a free equipment damage insurance policy, btw,) you can fill out the form for your general liability insurance, Your insurance certificate must name the state of Hawaii as the additional insured, and have this exact wording:
In the “Description of Operations/Locations/Vehicles/Special Items” section:
“The State of Hawaii, including all of its departments and attached agencies, their officers, employees and agents are named as additional insured with respect to the named insured’s filming activities.”
In the “Certificate Holder” section:
State of Hawaii
c/o State of Hawaii Film Office of
Dept of Business, Economic Development & Tourism
PO Box 2359
Honolulu, Hawaii 96804-2359
You can include that info when you fill out the form for your insurance, and they will put it all on the certificate for you. You’ll then provide a copy of the insurance certificate to the film office when applying for your permit (next step.) You can get more info on the insurance and what is required
- You will need to apply for an annual Hawaii film permit application. This is what allows you to legally take photos (for profit) around the island. The permit is valid only for State agency-administered areas (they will send you a list of where it allows you to shoot); for county and federal areas, you will have to get a separate permit from them. For example, if you’re doing a shoot at Foster Botanical (or any other county park) you will need to get a county park permit, which you can apply for at the Frank F. Fasi Municipal Building, 1st Floor 650 South King Street. This is a ‘per event’ sort of thing, so you’ll need to apply for a permit each time you plan to have a shoot at one of these areas. They will also require you to have ‘The City and County of Honolulu’ listed as an additional insured on your liability insurance certificate, so when getting your insurance, it’d be a good idea to go ahead and have both the State of Hawaii and the city and county of Honolulu listed as additional insureds, just so you don’t have to go back and do that later when you’re in a hurry to get a permit. (Dealing with the permits can be a pain, but the fines are gnarly so I would definitely suggest it!)
- You’ll need to submit an annual business filing to keep your business in good standing with the state. The date that this is due will depend on when you first register your business — they will let you know. A few weeks prior to when this is due, you’ll receive a postcard with filing info on it. You can view info on this and how to file it online here. There is a small fee due with this annual filing, as well.
Shoots…you’re in business!
Next week, I’ll be following up with some information on the more “fun” side of starting a photography business…the actual photography side of the biz!