Should I Register My Event Vendor Business?

Holiday bazaars, craft festivals, and other holiday markets are a big deal for many artists, crafters, dealers, and vendors. These events are often the heart of their business—chances to promote new work, build a community or customer base, and sometimes, make their biggest sales all year.

Exhibiting as a vendor at a convention or similar show can be both fun and profitable, but it can also be confusing, especially when you’re just starting out. Does being a convention vendor count as a small business, and if so, do you need to register it with the government? Is a business license necessary? Are taxes different for vendors? Don’t worry, we’ve got the answers to these questions and more. Spoiler warning: it’s easier than you think!

Forming a Registered Business as an Event Vendor

If you make decent money from selling at conventions or other events, there might be good reason to form a registered business by filing as an LLC or corporation. Being a registered business can lend you credibility with customers, suppliers, and event organizers. But even more important than that, corporations and LLCs are legally separate from their owners, which means personal assets are protected if your business gets sued or goes into debt.

General partnerships and sole proprietorships don’t have that protection. If you operate one of those businesses and get sued for perceived copyright infringement, selling something that injured a customer, or incur debt because an investment didn’t work out, your personal assets could be seized in judgments against you. Liability protection can be very important for high-profile vendors who might be targeted for their visibility. When vendors choose to register their businesses, they often choose to do so as an LLC. LLCs are fairly easy to manage and offer flexible options for how the business gets taxed. Forming a corporation is also an option, but comes with much stricter regulations and administrative requirements.

Do I need to start a business to sell at an event?

If you’ve sold something, you’re technically a sole proprietorship (or a general partnership, if you and another person work together). Sole proprietorships and general partnerships are simple business structures that generally have less paperwork involved. Legally, those business structures are extensions of their owners, even with the same legal names (unless you get a DBA for your business).

Truthfully, for vendors that don’t make a substantial amount of money, a sole proprietorship is usually sufficient. However, for certain vendors, taking the extra step to register as an LLC or corporation might be beneficial.

Liability insurance for convention vendors

Forming a registered business isn’t the only way to limit your liability for things that happen because of your business. One often overlooked option is liability insurance. Some conventions will provide liability insurance for vendors (which usually adds to the cost of an exhibitor space), but others will just require all exhibitors to obtain a specific amount of liability insurance themselves. Bear in mind that the liability protection of being a registered business is not a valid substitute when events make liability insurance mandatory.

This requirement has become widespread enough that certain insurers offer specialized insurance just for conventions and similar events. You may be able to purchase short-term liability coverage in this manner for the length of time of a specific event, but if you exhibit at many shows over the year, a long-term annual rate may be more cost-effective.

If your event vending business is booming, and it’s time to officially register, Northwest is ready to be your sidekick. Our business formation and registered agent service comes with a free year of web hosting and a dedicated domain of your own, perfect for promoting your work ahead of your next show.

Other Legal Requirements for Event Vendors

Whether your business is registered or not isn’t the only legal consideration you should have as an event vendor. No matter if your business is painting heroic action figures or spun pottery for home decor, you’ll still have to follow the rules for permits, licenses and taxes.

What permits and licenses will I need?

Before you set up shop at a convention, you might need to secure some permits. Requirements vary by state and locality, but generally, you’ll need a seller’s permit for that state. States generally have limited-use permit options for vendors, covering a set amount of time that are less expensive or difficult to obtain than a full-blown ongoing permit would be.

In some areas, you may also need a local business license for the right to operate your business within a specific city or county. These requirements vary tremendously by location, so check ahead of time with the local government where the event is held.

What about taxes?

If you’re selling goods at an event, you’ll generally need to get a state sales tax permit. This permit allows you to collect sales tax on the items you sell. In some places, the state sales tax permit is part of the seller’s permit, but that can vary. State departments of revenue or taxation usually issue those permits.

You’ll likely need to keep track of your total sales while using the permit, then pay a certain percentage of what you made to the state by a set date. The exact percentage you owe will probably depend on whether you are a resident of the state where the event was held, or traveled there from a different state. Income from conventions and other events is still taxable income, so you’ll probably need to account for what you’ve made come income tax time. Small business income is usually reported through Schedule C on a 1040 form. Income below a minimum threshold ($400 in 2024) doesn’t require paying tax, but you’re still legally required to report all income by filing Schedule C.

Register a business for your vending

Whether you’re a newcomer to exhibiting at conventions or looking to level up your business by registering as an LLC, it’s essential to understand the legal requirements and tax obligations associated with being an exhibitor. With careful planning and preparation, you’ll easily conquer the challenges of being a vendor at a festival or other event.