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CRAFTY BUSINESS ADVICE => Crafty Business Discussion => Topic started by: Serendipity on March 02, 2004 10:40:29 AM



Title: Sales Tax
Post by: Serendipity on March 02, 2004 10:40:29 AM
Okay, I know that these rules will vary by state, but I have a couple of general questions:

1. Is there a minimum gross sales amount before you are required to pay sales tax for your business?

2. If I've already paid sales tax on the materials used to make my products, does that affect the amount of sales tax I need to collect?

3. Once I get my sales tax ID, can I use it at regular stores like Hobby Lobby so that I don't have to pay sales tax on my materials?


Title: Re:Sales Tax
Post by: Leigh on March 02, 2004 08:21:43 PM
I'm no expert--still learning myself, but if you know an accountant, that would probably be the best person to ask--at least it was for me.  She answered all my questions.  Like you said, it does vary from state to state, but I know that in Georgia I have to collect sales tax on any sale no matter what gross sales amount I've reached.  If I opened up shop today, sold something for $30 dollars, I'd have to collect 7% tax and report the total sales and tax ammount monthly.  Reporting monthly is a big pain, and I'm not sure if other people actually do it that way or what it's like in other states, but that's what the paperwork I have says to do. And as far as I know, the fact that you paid sales tax to buy supplies doesn't have anything to do with you collecting sales tax.  For the last question, I think your tax ID only helps you in the wholesale arena.  Hobby Lobby is retail only as far as I know, so you'd still be subject to sales tax and you wouldn't get a discounted rate, but you can sometimes use your tax ID to set up wholesale reationships or attend shows like the mart as a buyer.  


Title: Re:Sales Tax
Post by: simply on March 03, 2004 07:41:34 AM
i could be totally wrong since i personally haven't looked into yet, but i was told you don't pay until you sell $500. in florida anyways.


Title: Re:Sales Tax
Post by: plainmabel on March 03, 2004 03:56:55 PM
simply, are you thinking of income tax?

I think with sales tax in most states you're required to collect it (from in-state customers) and pay it no matter the amount you sell (in fact you usually have to file a form even if you don't collect any, once you've got your tax info filed).  But the way you go about paying it differs from state to state.  For example, here in MA, I only have to pay it once a year b/c I generally don't collect very much (most of my customers are not in MA).

As for retail stores, I've heard that you can fill out a form and they'll keep your tax # on file so you don't have to pay the sales tax when you come in (I guess you have to ask them to look it up for you each time you're at the register?).


Title: Re:Sales Tax
Post by: simply on March 03, 2004 07:14:19 PM
i coulda sworn it was sales tax...but i'm kinda flighty, so it might not be ::) i haven't gotten around to checking that out for myself yet.


Title: Re:Sales Tax
Post by: Serendipity on March 04, 2004 10:52:38 AM
Thanks for all of your responses -- I also talked to some other people and got some answers:

- My parents' business accountant says that you have to collect sales tax no matter how little you sell.

-Hobby Lobby's accounting department says that I can just bring in a copy of my tax (resale)certificate when I shop at their store and I won't have to pay sales tax on items that will be used in the products that I sell.

-My mom suggested that I just make a bunch of copies of the certificate and carry them with me so that the employees don't have to go look up my info every time I buy supplies.


I hope this info helps some other people, too!


Title: Re:Sales Tax
Post by: shaeon on March 10, 2004 01:28:06 PM
Wow, the employees at your local Hobby Lobby must be on the ball if they actually know what you're talking about with business tax.  At my local HL, they are all minimum wage zombies.


Title: Re:Sales Tax
Post by: www.sly-eye.com on March 10, 2004 01:56:39 PM
One more thing about a sales tax number - if you plan on selling at craft shows some shows require you have a number.  

Also, there is always a potential that the IRS could show up and ask to see your sales tax number!

I would check out a book called "Jewelry Making for Fun & Profit : Make Money Doing What You Love"  Or something similar.

I have found these books helped me sift through all of the info.

Morgan

P.S. - technically selling on the web you only have to collect sales tax from people who live in your state.  Any good checkout software or PayPal handles that part for you.


Title: Re:Sales Tax
Post by: Serendipity on March 10, 2004 02:25:48 PM
I didn't actually talk to the employees at my local Hobby Lobby, but I emailed their corporate accounting department (there's a link on the HL website). I was too embarassed to ask in person because I barely know what I'm talking about!  ;D

BTW, I mailed in the application for my sales tax id today -- Yippee!


Title: Re:Sales Tax
Post by: supercrafty on March 12, 2004 01:18:22 PM

-Hobby Lobby's accounting department says that I can just bring in a copy of my tax (resale)certificate when I shop at their store and I won't have to pay sales tax on items that will be used in the products that I sell.


Yes, I do this at Joann's too.  They just type in my number in the register and I don't pay sales tax on items I use to make things I sell.


Title: Re:Sales Tax
Post by: OldQlts on March 15, 2004 12:25:41 AM
this is for "toomuchglue" or anyone else who buys supplies at joann fabrics (aka joann fabric & crafts). you can go thru their web site to contact the corporate office and obtain a "commercial discount card." i just managed to get this after several months of trying to figure out how to do it (the local stores didn't seem to know anything about it!). anywayyyy ... this card is good for 15% off EVERYTHING ... including SALE items ... as long as there's no coupon involved. joann's is also very willing to accept your resale number so you don't have to pay sales tax. you will need to have your number on file in EACH joann's that you shop at, however.


Title: Re:Sales Tax
Post by: possumliving on April 16, 2004 03:59:38 AM
I'm no expert--still learning myself, but if you know an accountant, that would probably be the best person to ask--at least it was for me.  She answered all my questions.  Like you said, it does vary from state to state, but I know that in Georgia I have to collect sales tax on any sale no matter what gross sales amount I've reached.  If I opened up shop today, sold something for $30 dollars, I'd have to collect 7% tax and report the total sales and tax ammount monthly.  Reporting monthly is a big pain, and I'm not sure if other people actually do it that way or what it's like in other states, but that's what the paperwork I have says to do. And as far as I know, the fact that you paid sales tax to buy supplies doesn't have anything to do with you collecting sales tax.  For the last question, I think your tax ID only helps you in the wholesale arena.  Hobby Lobby is retail only as far as I know, so you'd still be subject to sales tax and you wouldn't get a discounted rate, but you can sometimes use your tax ID to set up wholesale reationships or attend shows like the mart as a buyer.  

Our Ben Franklin in FL kept a card file box with those who bought retail but had a tax ID #. They would take your number and required a copy of your resale tax form and keep it on file so you didn't have to pay tax.

If you pay tax on items you use in manufacturing your items, then you subtract that from the amount of sales taxes you are supposed to pay. It should be on your form somewhere. If not call your office.


Title: Re:Sales Tax
Post by: OldQlts on April 16, 2004 05:36:56 AM

If you pay tax on items you use in manufacturing your items, then you subtract that from the amount of sales taxes you are supposed to pay. It should be on your form somewhere. If not call your office.

hmmm ... i wasn't aware that i could do this! but maybe it's a state-by-state thing. does anyone know if california permits this? thanks!
Quote


Title: Re:Sales Tax
Post by: fly on April 24, 2004 11:44:18 AM
Last I knew, if you don't charge tax, you don't have to worry about it..  


Title: Re:Sales Tax
Post by: OldQlts on April 24, 2004 09:20:57 PM
Last I knew, if you don't charge tax, you don't have to worry about it..  

on the contrary, if you don't charge (collect) sales tax, and you sell retail within any state where you have a physical presence (generally the state where you live), you should be very, very worried. talk to your state tax commissioner ...



Title: Re:Sales Tax
Post by: warmsoul on April 27, 2004 03:26:52 PM
This is what I know about sales tax....in my wise varied business knowledge of 5 months....

It varies state by state. I obtained all of my state info by googling your state's dept. of revenue. (sometimes those gov't websites have long complicated addresses)

In GA, you have to collect on every sale you make in that state no matter what. For your 1st year of business, you must file a report every month, by the 20th. Even if you didn't make a sale. I guess they just want to get a feel for how much you are selling. After the first year, I guess you only have to file when you have sales, which for normal businesses is monthly, but if you do internet business, you might go a month or two without selling in your state.
Most all stores will honor your tax-id number if you fill out the proper forms, etc. Some give you a card to use, others have it in their computer, some make you bring it every time. I usually ask at customer service or corner that important person who makes everyone look busy!
And OldQ....Thanks for the Joann's tip! I was bummed cuz i couldn't use my student discount anymore and have been avoiding them, now i can get one of those commercil cards, and save,save,save!


Title: Re:Sales Tax
Post by: jaykwon on May 03, 2004 01:40:45 AM
i just went through the process of getting a sellers' permit (CA) in march. and honestly, it was *so* easy. i spent hella time trying to figure out the ins and outs and whys of the whole sales tax process, and eventually figured i'd just be better off going to the BOE office in person and getting it done with.

basically, the schedule for reporting/paying sales tax is scalable according to how much taxable income you're projecting for the current year. yearly if you're like me and aren't forecasting that much - monthly or more frequently if you're doing higher sales volumes.

and, yeah, you have to pay sales tax even if you only have, like, 10 bucks in taxable sales. but if that's all you're doing it only has to happen once a year.


Title: Re: Sales Tax
Post by: jessdell on May 24, 2004 08:47:08 AM
hey! I have been thinking of starting a small webpage to sell my stuff. I'll probably make squat-diddly, if not, I KNOW not enough to ever be recognized. So do I still have to charge tax? I live in GA and I'm 14, so this might be a bit of a challenge for me! haha


Title: Re: Sales Tax
Post by: OldQlts on May 24, 2004 05:02:12 PM
hi jesusfreak,

the answer is yes ... if georgia has a sales tax (some states don't), then you should be registered to collect it and doing so. i googled on "sales tax" georgia and found the sales & use tax division of the georgia department of revenue. you can probably get more specific info from their web site, or by calling someone at the agency.

http://www2.state.ga.us/departments/dor/salestax/index.shtml

good luck!





Title: Re: Sales Tax
Post by: jessdell on May 24, 2004 07:49:13 PM
thanks! funny that you found that site, I just emailed the people there with my question.


Title: Re: Sales Tax
Post by: KnitAddictions on June 22, 2004 11:28:13 PM
I'm not sure if this has been addressed somewhere, but I'm going out of my mind trying to figure it out. 
Ok--if you sell on the internet, you only have to charge sales tax on items sold within the state where you have a physical presence (i.e. where you live, where your shop is whatever).  If you buy your supplies for your crafts within your state, you don't have to pay sales tax because you are going to resell items you make from those supplies.  Now, my question is, if you didn't pay sales tax on those supplies, and the customers you sell to on the internet are not from your state so they don't pay sales tax on your merchandise, how does sales tax get paid on that merchandise?  I order the majority of my supplies online from outside my state so I don't pay sales tax.  Or if I were to buy locally, you can often get a tax exemption at the store (i.e. the Joann's tax exempt card discussed earlier in the thread).  I can't imagine that the government wouldn't want sales tax paid on that merchandise one way or another, so I am responsible for paying sales tax on items that I am buying out of state and then selling out of state?   ???  I am totally confused?????????


Title: Re: Sales Tax
Post by: lexscreations on June 23, 2004 07:26:01 AM
I'm not sure if this has been addressed somewhere, but I'm going out of my mind trying to figure it out. 
Ok--if you sell on the internet, you only have to charge sales tax on items sold within the state where you have a physical presence (i.e. where you live, where your shop is whatever).  If you buy your supplies for your crafts within your state, you don't have to pay sales tax because you are going to resell items you make from those supplies.  Now, my question is, if you didn't pay sales tax on those supplies, and the customers you sell to on the internet are not from your state so they don't pay sales tax on your merchandise, how does sales tax get paid on that merchandise?  I order the majority of my supplies online from outside my state so I don't pay sales tax.  Or if I were to buy locally, you can often get a tax exemption at the store (i.e. the Joann's tax exempt card discussed earlier in the thread).  I can't imagine that the government wouldn't want sales tax paid on that merchandise one way or another, so I am responsible for paying sales tax on items that I am buying out of state and then selling out of state?   ???  I am totally confused?????????

I honestly don't think the government has anything in place yet to enable them to collect sales tax for out-of-state Internet sales.  So I would guess you don't have to worry about it.  (I don't think it means you have to pay tax on your supplies.) 

If anyone knows otherwise, please enlighten us.  ;)


Title: Re: Sales Tax
Post by: Serendipity on July 14, 2004 01:12:41 PM
Technically, customers are supposed to pay sales tax directly to the gov't when they make out-of-state internet purchases on which they haven't paid sales tax (assuming they're not buying for resale). Most people don't even know about this law and it's not really enforced yet, but it probably will be at some point in the future. Anyway, sellers are NOT required to collect sales tax on out-of-state sales even if they have not paid sales tax on the materials used. It is the responsibility of the buyer. Does that make sense?


Title: Re: Sales Tax
Post by: lexscreations on July 14, 2004 07:26:08 PM
Technically, customers are supposed to pay sales tax directly to the gov't when they make out-of-state internet purchases on which they haven't paid sales tax (assuming they're not buying for resale). Most people don't even know about this law and it's not really enforced yet, but it probably will be at some point in the future. Anyway, sellers are NOT required to collect sales tax on out-of-state sales even if they have not paid sales tax on the materials used. It is the responsibility of the buyer. Does that make sense?

Yes.  In fact, I learned as much recently from my boyfriend, who is taking a public policy class.  :)


Title: Re:Sales Tax
Post by: sadielouwho on September 16, 2004 09:22:29 PM

BTW, I mailed in the application for my sales tax id today -- Yippee!
See, I got mine in the mail a few days ago and I was really confused by some of the questions. Like what did you fill out for," Projected gross sales"? It's like, how the heck should I know and why do you care? Also, after you get your application approved, they ask you questions like," Give a list of your suppliers" How do I know who my suppliers are? Most of them won't even talk to you until you have that stupid certif! As you can tell, I'm not frustrated or anything...it just seems like I've been spinning my wheels lately. You can't get a business lic. until you have a seller's permit and you can't get a seller's permit until you have a business...hello?!


Title: Re: Sales Tax
Post by: shes crafty on September 23, 2004 12:02:55 AM
I'm trying to wrap my head around all the terms here-EIN, tax ID #, business license, etc.  Are these the same things?  Are they the same as a wholesalers license?  I'm throwing around the idea of starting my own business, but not sure really where to start legally.
Is there a small business bureau (in CA) that could answer these questions, or can someone spell it out for me (a little slow to this, sorry ???)



Title: Re: Sales Tax
Post by: OldQlts on September 23, 2004 06:33:12 AM
I'm trying to wrap my head around all the terms here-EIN, tax ID #, business license, etc.  Are these the same things?  Are they the same as a wholesalers license?  I'm throwing around the idea of starting my own business, but not sure really where to start legally. Is there a small business bureau (in CA) that could answer these questions, or can someone spell it out for me (a little slow to this, sorry ???)

i'm in california, so i'll jump in here! this is the state of california's business portal: http://tinyurl.com/4ybsx (the actual URL was waaaay too long). i'm not sure you'll be able to find anyone to "advise" you at the state level, although they'll be happy to get you set up with the proper permits & licenses.

if you're wanting to start a small home-based crafts biz in california, then all you'll probably need are the sales tax license (aka "seller's permit") from the BOE (board of equalization) and maybe a city or county license, depending on where you live (check with your local municipality for that info). the seller's permit is free (yay!), but your local folks may charge you a bit (go figure!).

two organizations that are helpful are the SBA (small business administration) and SCORE (service corps of retired executives). they both have terriffic web sites. just google for them and you'll find them easily enough. :)  they have TONS of online info, and may be willing to talk to you in person (i'm not sure how interested they really are in small, home-based businesses however).

to answer some of your other questions, EIN (employer identification number) is probably only required if you're going to have employees, tax ID # is probably the seller's permit #, and the seller's permit is what you'll need in order to buy wholesale. keep in mind that buying wholesale often involves minimum orders in excess of $100, and sometimes quite a bit more than that, however it will also allow you to escape paying sales tax when you go to your local joann's fabric store (for example) to buy supplies at retail! (most, but apparently not all retail stores ... based on my personal experience ... will allow you to bypass the sales tax when you have a seller's permit.)

hope this helps! feel free to holler for more help as you grow your business!




Title: Re: Sales Tax
Post by: jjgirl on September 23, 2004 04:50:15 PM
Hey! I'm 15 years old and from PA, which seems like didn't come up in this conversation.  I too had the sales tax problem.  I googled, and called about 15 toll free numbers that I found online, in the phonebook, etc, but nothing seemed to work.  I finally just called a number and filled out a machine survey and requested that they send me a form for a PA Salex Tax License. (actually, i think it's called a sales, use, and hotel occupancy tax, or some other junk like that...)
But I got the form in the mail about a week later and it gave clear instructions about what to put in each section - much better than what they have to off online at www.paopenforbusiness.state.pa.us (http://www.paopenforbusiness.state.pa.us) or http://www.revenue.state.pa.us/.  But I though it would be quicker if I just submitted my info online - I did and winthin two days, I had an e-mail with my sales tax id # in it.  I recieved all the official documents around 1 1/2 weeks later, so it did take some time.
And all that just because I wanted to sell my hats and scarves at two craft fairs.  Man. 
Oh, and just a quick question about filing the quarterly returns: since I technically sell "clothing accessories" I don't have to collect tax, right?

Hope this helps and if anyone in PA has anyother questions, feel free to e-mail or PM me!


Title: Re: Sales Tax
Post by: OldQlts on September 23, 2004 08:05:24 PM
hi jjgirl!

first, i really have been wanting to say how terriffic it is that younger folks are interested in marketing their crafts! i've sold my handmade things since around 6th grade or so (that was MANY years ago!).

sales tax is a state thing, and every state seems to have a different name for the department or agency that handles this stuff! i'm glad you finally got the paperwork you needed!

yep, many fair promoters are getting picky about whether one has a tax number. but you've got yours now! and DO remember to use it to "avoid" paying sales tax when you buy supplies!   :D  you might ask your favorite suppliers if they offer any sort of discount. i know joann's (fabric store chain) has a card you can get that is good for 15% off ALL items, as long as it's not a coupon sale. (meaning if they just offer 40% off and you don't need a coupon to get that sale price, then you can use the discount card and get a total of 55% off! woooo hoooo!!!) [you can contact joann's thru their web site to get this card, at least that's how i did it.]

whether you have to collect tax on "clothing accessories" is something that's determined by your state. my best guess would be if you don't pay tax on similar items at the mall (for example), then there's no reason that you should have to collect tax on the items you're selling. but you may want to check with someone at your state sales tax authority just to be on the safe side!

best of luck at your craft fairs!



Title: Re: Sales Tax
Post by: jjgirl on September 24, 2004 11:03:57 PM
Thanks for the advice - and about the Joann Fabric discount card, I looked and search their site, but couldn't find any info on how to obtain one.  Any directions would be great!


Title: Re: Sales Tax
Post by: OldQlts on September 25, 2004 05:37:39 AM
Thanks for the advice - and about the Joann Fabric discount card, I looked and search their site, but couldn't find any info on how to obtain one.  Any directions would be great!

i just looked at my card. it's called the "commercial discount card." i think i just used their site to email their corporate office. it's somewhere in southern california as i recall. hope this helps a bit more!



Title: Re: Sales Tax
Post by: Decorate Now on September 26, 2004 11:49:00 AM
Sales tax is collected for the state/county in which you live.   Different states have different rules on *what* you collect the sales tax on.  For example, in some states, labor is taxed.  In others, labor is sales tax exempt.  You'll have to ask your accountant or check your state's sales tax website or office for info on what is correct for your own state.

You need a business license to operate in your city/county.   Those are local items and are enforced locally. 

Sales tax is enforced at the state level.   

How much you sell will determine how often you need to fill out the sales tax and use form.  Again, that varies by state.   If you owe more than $500 per month in sales tax, you most likely will need to file monthly.  Smaller amounts tend to need to file quarterly.  Check to see what the cut off limits are for your own state.

For web/online sales, you need to collect sales tax for sales in areas which you have a physical presence...that means an office building or other presence--such as anything that would need a business license in the area.   Some very large companies set up their websites as separate corporations, so that they didn't have to collect sales tax.   Awhile back, the Supreme Court ruled that you can't collect state tax across state lines.  That is why you don't collect sales tax from the buyer in Florida if your company is in California.  However, since they are missing out on a HUGE amount of revenues in tax dollars, they are working on this.  There was legislation passed so that no sales tax had to be collected for online out-of-your-area sales, just so there wouldn't be any confusion.  Government is working at smoothing out all the bumps to make it easier to collect and distribute sales tax regardless of where the buyer/seller are located.  So this may all change later.   

Also, some states (like Georgia) require you to collect *the county's sales tax from the buyer's county* for internet sales.   So, if I sell an item to any of the 100+ counties in GA, then I need to collect *their* sales tax, fill out *their* sales tax form, and do this over 100 times (if I have a sale in each county).    I don't just send the sales tax from Gwinnett county(buyer's resident county)  to Cobb county (seller's resident county).   I have to find out what rate Gwinnett charges (it may be more or less than my own county, due to local option sales taxes) and send that amount to their county.  Repeat for any other county in GA that I sold to.   So check with your own state to see if your own county gets any sales tax for online sales in your home state--or if the county of the buyer gets that tax.   It can become very complicated.

Also, a Sales and Use tax is made so that tax gets paid *somewhere.*   If I buy something locally, then I pay the retailer sales tax, and the retailer pays the state.   However, if I buy something online or through mail order (and the company doesn't have a physical presence in my state that would require them to collect sales tax regardless), then the BUYER is supposed to pay the sales tax in their own home state.  Most of the time, the  buyer is complerely unaware of this.  However, if you buy a larger ticket item, such as a car, then you will find out quickly about having to pay sales tax in your own home state.   So (for example) you would buy the car in GA and think you are getting deal because you didn't pay GA sales tax, and then your home county would promptly hit you up for the sales tax before they will register your car.

And if you do craft shows out of state, then check the other state's website and call their tax office to find out what the rules are.   Many states require you to file their sales tax forms very quickly after a craft show where you are an out of state vendor. 







Title: Re: Sales Tax
Post by: TuffJess on March 19, 2005 05:32:09 PM
Thanks for all the insight, folks.  I know this thread is a little old, but I have a couple of questions.  So....if I am selling at a craft fair in a different state, I will have to send in the sales tax.  But what do I need to be able to sell there in the first place?  Do you have to register in that state as well, or just provide your business ID info from your home state?  If that makes any sense..


Title: Re: Sales Tax
Post by: ticklememom on March 20, 2005 10:50:09 AM
As of July1, 2005 on-line sellers (regardless of their location or physical presence) must collect local sales tax by taxing district in Ohio, Kansas, Utah and Idaho. Tax is figured by package destination.   More states to follow.  This is going to be national in the not too distant future.  Check out this website:  www.streamlinedsalestax.org    This is the on-line collaboration site for all the state tax departments.

Sorry to bring bad news but this is going to affect all of us soon.


Title: Re: Sales Tax
Post by: OldQlts on March 20, 2005 10:15:35 PM
hi tuffjess,

when you're doing a show in another state, the promoter *should* provide sales tax info.

at some of the out-of-state shows i've done, there's an option to sign up for a temporary sales tax permit (good for as long as the show is). sometimes this is done thru the mail ahead of time, and other times there's a representative from the sales tax department present at the show.

you could also go to the state's web page (generally www.ca.gov ... replace "ca" with the 2-letter abbreviation for the state in question) ... find a link to the tax or revenue department and contact them by phone or email.

hope this helps!



Title: Re: Sales Tax
Post by: sugarhandgrenade on April 15, 2005 10:55:24 AM
Ok. Please some one help me stop pulling my hair out! I've read all the threads and messages and I am still utterly lost.

--I have a on-line store. Do I need a Sales Tax ID? Where can I get one? (I live in South Carolina)
--When I have this sales tax ID will I have to file taxes for this year?
--I already have a EIN #. I just use this for wholesale, right?
--What are some basic things that I need to cover to make sure Mr. Tax Man doesn't come pounding on my door telling me I owe $131,321,321,655,603 in back taxes.

If anyone could help, I would be soo grateful!


Title: Re: Sales Tax
Post by: SKN725 on April 18, 2005 07:25:08 AM

--I have a on-line store. Do I need a Sales Tax ID? Where can I get one? (I live in South Carolina)
--If anyone could help, I would be soo grateful!

  SC government has a website and I believe now has a law that covers "electronic sales". Can't remember exactly how the site is listed.  Search SC tax laws. It includes copies of liscense applications.  They are somewhat confusing but you can call their toll free number if you have questions once you find the website.They really make yu wonder if its worth doing business in SC!!!


Title: Re: Sales Tax
Post by: girlapaloo on May 03, 2005 11:11:36 AM
taking a break from yanking my hair out like so many others...

if i am selling things on ebay, a personal website, and at local stores -
do i just need a tax id number or do i also need a business license along with it?
i'm in kentucky, i don't make that much money doing it but i still have to figure out how to report it.
argh! the department of revenue website really has me lost. i may have to hire an accountant. double argh!


Title: Re: Sales Tax
Post by: k8et on May 24, 2005 12:16:46 PM
i dabbled with the tax ID a while ago, but found it to be a hassle and i wasn't really selling anything so i cancelled it.

i am curious, if i hold a garage sale, am i supposed to collect sales tax?  or if i sell stuff on ebay that i would sell at a garage sale, then what?

i'm not pursuing the craft-business currently, but need to clean out my storage, and sell stuff i won't use. just curious how that would fit in to the equation! thanks!!  (oh and i'm in NJ.)


Title: Re: Sales Tax
Post by: chefddr on January 06, 2006 07:16:27 PM
thank you soooo much for this information.  I have just started my new business and since I will be going to the craft store for MANY MANY items over the next several months, it is good to know.  I hope it works at AC Moore in PA!  But great idea to keep my sales tax ID# copies with me - that will save TONS of time!



Title: Re: Sales Tax
Post by: javastain on January 09, 2006 12:58:40 PM
Hahahahaha! This is crazy!
I would like to make a couple of points;
1. there is a difference between buying something and selling something=they are two seperate transactions. therefore...
2. It does not matter if you paid SALES tax on 'beads' (insert your material here). You may avoid it by having your tax ID number (see other posts for how-to). If you sell an item with those 'beads' that person must pay sales tax as well (to you) if they are in, or the sale is happening, in the same state as you.
3. You MUST pay INCOME tax on the PROFITS of that sale.
4. you MUST report through out the year your PROFITS (income). At first it is monthly and then it goes quarterly. The IRS will send you notices, don't worry  ;)
5. The permits/certificates and other papers needed vary, BUT you almost always need a local vendors permit to set up a table at a craft fair, or on the corner at a parade, or if you go door to door (or customers come to you). You also need to have your Tax Id number. These are two different things, one is a permit to do business in that area you are in (they will give you local laws/rules about selling in that county/town/state). The other is a proof of registration for YOU paying your government (IRS) taxes.
6. Keep all receipts, and if you do a decent amount of business, pay someone to do your yearly taxes! My hubby installs, builds and repairs computers, he makes a nice penny doing so, but still has a full time job for medical bennies. He pays someone to do his taxes and would not do it any other way! Plus those tax people will give you hints on ways you can better save/spend your dollars. And eventually you might be comfortable doing your own.

Invest in the beginning, it creates a future for your business. Record all transactions (even trades), don't cheat the IRS, if you don't like it change the laws! Keep receipts for things like poster board if you make your own signs, gas fill ups if you are travelling a distance to a craft fair, and even your internet bills if you sell on line. I am not saying these things are all completely tax deductible, but give them all to that tax gal and she can figure it out!!! 
6.


Title: Re: Sales Tax
Post by: cronenwett on January 23, 2006 07:50:16 AM
I have another question, I wonder if any of you have had this issue...

I live in NH, and our business is here.  NH has no sales tax (yay!).  So I don't have the magic "no sales tax" certificate.  NH is very small and most of the good stores we go to are in MA.  MA has sales tax.  Is there a way for me to avoid paying sales tax on the supplies I buy in MA for my NH business?  Or am I just out of luck?

Thanks,
Liz


Title: Re: Sales Tax
Post by: sweetjaime on January 23, 2006 01:40:12 PM
Does anyone know anything about sales taxes in Canada? Getting a tax expent for buyin things etc ?


Title: Re: Sales Tax
Post by: 123shopaholic on April 10, 2006 07:39:01 PM
Does anyone know anything about sales taxes in Canada? Getting a tax expent for buyin things etc ?
yah im in canada too so does anyone know?
im not sure if this question has been asked before, but do you have to pay taxes  when you buy something off etsy, or Ecrater? im deffinatly considering getting a website at Ecrater  and so im wondering if ppl have to pay taxes when they buy one of my products?


Title: Re: Sales Tax
Post by: tenraid on April 25, 2006 10:37:18 AM
i'm in florida... and i'm gonna be doing a few fairs in the near future (one this weekend), and i'm freaking out!  i also have an etsy store, though on the store i've never sold anything to anyone in florida, so i don't think it'll be a problem for that...

do i have to register my business with the state or local gov't?  can i get the tax resale # without it?

is there anyone in florida that can help me out?


Title: Re: Sales Tax
Post by: AngiR on May 28, 2006 10:45:50 AM
I haven't seen anything about Texas here on the board, but just for those that sell or manufacture stuff in Texas: You must have a Sales and Use Tax permit to sell. No matter how much or how little you sell.  It's free to get one, and relatively painless.  The only tricky part is to figure out what category your business fits into.
You can find more information on Texas taxes at: http://www.window.state.tx.us/taxinfo/sales/index.html.
This includes anything you may send out of state.



Title: Re: Sales Tax
Post by: PinkyK on June 15, 2006 02:08:27 PM
I'm in Florida... and I'm gonna be doing a few fairs in the near future (one this weekend), and I'm freaking out!  i also have an etsy store, though on the store I've never sold anything to anyone in Florida, so i don't think it'll be a problem for that...

do i have to register my business with the state or local gov't?  can i get the tax resale # without it?

is there anyone in Florida that can help me out?

I know you posted a LONG time ago but just in case you still need an answer.....

Yes you need to register your business with both state and local government.  I just did it today. I registered as a sole  propietorship and that made things easier.

All of the state business registration is handled through the Department of State. This is a link to their corporation resources: http://www.dos.state.fl.us/doc/ (http://www.dos.state.fl.us/doc/) You can register on-line using the sunbiz link.  http://www.sunbiz.org/ (http://www.sunbiz.org/)

All of the tax information is handled through the Department of Revenue (DOR).  We do not have a state income tax in Florida (YEAH!) but we do have sales tax and our sales tax varies from County to County.  I talked to a bunch of DOR people today and they were helpful and helped me figure out what I needed to do.  They also have a questionnaire on their sales tax web page to help determine what you need to register for. Here are the DOR web pages: 
http://www.myflorida.com/agency/44/ (http://www.myflorida.com/agency/44/)
http://www.myflorida.com/dor/eservices/apps/register/ (http://www.myflorida.com/dor/eservices/apps/register/)
http://www.myflorida.com/dor/eservices/apps/filepay/ (http://www.myflorida.com/dor/eservices/apps/filepay/)

Also check for local business license information.   

As far as federal taxes go, right now it is my understanding that as a sole proprietorship I don't NEED a federal tax ID number. I can use my social security number.  However, I am going to verify that fact with the IRS tomorrow. It is better to be safe than sorry.

Budget/Government Wonk Warning: Policy information ahead!
Someone asked why you have to report how much tax you collect on a monthly basis.  This is so budget bean counters (like me in my former life) can "estimate" the amount of revenue that will be generated by a specific source or tax.  If it is lower than predicted/expected they may have to make adjustments to the budget and government spending. This happened in 2001 after September 11th.  People didn't travel nearly as much and sales tax revenues in Florida fell dramatically.  The Legislature had to meet and make budget cuts. If sales tax were not reported on a regular basis then the spending levels would have remained the same and the state would have been operating in a deficit. Which, in Florida, is against the state constitution. So, basically, reporting taxes on a regular basis is sort of like keeping a balanced checkbook.

Anyway, I hope this information is helpful. I'm sorry it was such a lllooooonnnngggg post!  :-[


Title: Re: Sales Tax
Post by: tenraid on June 21, 2006 09:14:11 AM
Thanks PinkyK for all the info!  it's never too late to learn more about making your business work.  Thanks again!


Title: Re: Sales Tax
Post by: PinkyK on June 21, 2006 09:22:47 AM
Thanks PinkyK for all the info!  it's never too late to learn more about making your business work.  Thanks again!

You are welcome! I should have my tax ID number from DOR very soon, like today! Then I can register my business with the city and county.

I still have not called the IRS yet but my parents have run small businesses their whole lives and they said you don't have to have a tax ID number if your business is small enough. For example, if you don't have any employees. You can hire contractors, they owned houses and rented them so would have to hire for example, a roofer, from time to time. The roofer was considered a short term contractor not a full time employee. You just need to be extremely diligent in keeping your business and personal expenses separate.  The IRS has been auditing "home offices" and "home business" because so may people claimed things that were really not a business expense.  Claim what you should rightfully claim, but make sure you don't rationalize claiming things as "business expenses" and end up in trouble.


Title: Re: Sales Tax
Post by: ScraPerfect on November 30, 2006 02:44:14 AM
As a business, I pay charge and pay state sales tax for any sale inside of my state whether in person or on the internet--well, any direct to consumer sales as retail stores or other resellers don't pay sales tax.


Title: Re: Sales Tax
Post by: Sockdiva on January 04, 2007 06:53:41 PM
Hi! I've now heard this a couple of times...too small to worry about keeping track of inventory, or supplies, and such. What exactly is too small? It's just me, no employees, but I got a resale license when I passed that magic # to be a hobby anymore. But the idea of keeping track of every  bead and scrap of fabric is crazy!

I'm filling out a request for a consultant from our Small Business Development Center, but they may not even want to bother with a little craftser like me!

I finally understand about accrual and writing off only what supplies I've used in what I've sold, but what about supplies? It gets recorded as what? Do I really need to keep track of this for taxes? I'm willing to do it for inventory of jewelry I've made, but do I have to do anything with my supplies, except keep receipts to prove the cost of materials used when I sell something I made with it?


Title: Re: Sales Tax
Post by: PinkyK on January 05, 2007 08:28:00 AM
I keep track of my supplies by keeping my receipts so when I do my federal income taxes I will be able to write off my business as a loss. I KNOW I spent more than I made for sure! I'm really hoping that this won't be the case next year.....but until then I'll take the deduction!


Title: Re: Sales Tax
Post by: ksew on January 29, 2007 12:49:19 PM
So.. yet another question. I live in MA. I have a sole prop. and I use my SS# as my tax ID. So what that means is that really I never got a tax ID. Now, my question, because I just did my taxes, is this.... I have online sales only. I only charge sales tax to customers in my state (MA). Now, how am I supposed to pay this sales tax back to the IRS? I have read in this thread that everyone says you are supposed to file monthly, then quarterly, etc. but .. where? and how? and what is this form called? And someone also said the IRS sends the form directly to you???? Am I not getting this form because I use my SS# as my tax ID? And lastly, I just did my taxes. I only had 2 customers this past year from MA so I only collected $2.85 in sales tax. What am I supposed to do with that, and where do I file it? Sorry if this is redundant, I'm just not understanding the process.


Title: Re: Sales Tax
Post by: jlyarnworks on February 14, 2007 06:36:58 AM
ksew, it sounds like you're using your SS# for filing income tax. To file sales tax you'd need a tax ID#. That's how your local govt keeps track of you. It allows you to tell them how much you think you'll make this year (so they can determine how often you need to file). It allows you to be tax exempt on supplies when you shop. Some craft shows also require a tax ID#. It also allows you to register your business name in your state so that no one else can steal it!

On our state sales tax form I list my total sales and then subtract out of state sales. What's left is the in-state sales I pay tax on.

Also, someone else asked earlier about supplies purchased out of state. I just got a flyer saying that I need to pay use tax on anything appropriate I purchased from out of state (tools, supplies for samples, etc.), but not regular supplies since I wouldn't pay sales tax for those in-state anyway. Does that make sense?

Jackie


Title: Re: Sales Tax
Post by: AttackOfSteph on February 26, 2007 05:47:02 AM
All this is sooo confusing!

I am thinking about opening an Etsy store, who knows if I'm gonna sell anything... do i really need to get an tax id # and stuff if i might sell $5 of merchandise?


Title: Re: Sales Tax
Post by: julie524 on April 17, 2007 01:17:19 PM
I know this isn't about Sales Tax, but it's about something that was mentioned in some replies. I emailed Guest Services at Jo-Ann Fabric's last night about the discount card and this is the reply I got.

Thank you for your communicating regarding our business discount program.  We do have a VIP 15% Discount card that is extended to those individuals that have a valid tax exemption status. Please provide your local store a copy of your current resale tax exemption certificate to receive the VIP Discount Card. The new VIP Discount card replaces the previously issued Commercial Discount Card.  The discount card can also be used for purchases at joann.com.
 
You will need to have your exemption status on file at each location in which you do business for audit purposes.


So now there is only one card and not two. I thought I would post their reply so that everyone that is wanting to get a card doesn't have to email them about how.


Title: Re:Sales Tax
Post by: NyteRayn on September 27, 2007 01:11:48 PM
Yes, I do this at Joann's too.  They just type in my number in the register and I don't pay sales tax on items I use to make things I sell.

At the Joann's here in Connecticut, they take off the sales tax and they also give me a 15% off coupon. Makes a HUGE difference in my cost for materials over a few months.