7 replies to this topic

[Digdug]

OK, I'm trying to understand all of this. What are all these ebay store owners and these palpal store owners doing to be a legal business?

Also, I have seen small businesses shop at club stores (Sam's / Costco) and they don't pay tax on items for resale? I guess they pay tax later. Do online stores do this same thing?

I am wanting to do things correctly and legally, even if I only sell $10.00 worth of merchandise the first year. I just get the feeling that a great many are just selling things on ebay and other places without legally keeping track of things.

Thanks

[XtremeCarAudio]

if your in the USA Contact your local BBB or SBA

laws vary by state

[iiinetworks]

Quote

Also, I have seen small businesses shop at club stores (Sam's / Costco) and they don't pay tax on items for resale? I guess they pay tax later. Do online stores do this same thing?

In general, anyone who has a sales tax ID can buy items for resale without paying sales tax at the time of purchase. However, in that case, one is responsible for paying tax at the time of sale (or use--if you use an item yourself, you are supposed to pay the tax on it).

Hth,
Matt

[Digdug]

How do you pay tax at the time of sale? Do you pay at the end of the year when you file your income tax?

[iiinetworks]

Usually you are expected to file a sales tax return monthly (may be quarterly someplaces; if the amounts are large enough, weekly/daily payment may be required insteadl--if you get that size, you should already have a bookkeeper handling that for you). Payment would be expected with the return.

Hth,
Matt

[Digdug]

I came across this quote while looking for tax information.

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If you sell in Texas to Texas Residents irregardless of the fact that the business has a real building or not, you are supposed to pay sales tax.

I attended a seminar at the Texas Comptrollers office and thats my understanding. I have a Texas Sales Tax License and have been paying taxes for a couple of years now.

If you have questions on this matter, Contact the Texas Comptrollers office.
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I thought someone said that if you were only selling online you didn't have to charge taxes to local residents in your home state???

[iiinetworks]

No, you always have to collect taxes in your home state. If you are only selling online in another state, you do not have to collect taxes for that state. However, if you have a brick and mortar operation in another state, you will have to collect taxes for them as well

Hth,
Matt

[jpf]

Just a quick word. In SOME states/provinces if you sell goods direct to consummers - there may be a clause that at a specified amount per year - you have to apply for and collect local taxes - even though you do not have any presents (brick and morter or office or virual).

I know in Manitoba Canada - if within Canada you sell more than $30,000 in taxable good or more a year (to a consumer where the tax should have been collected from) direct to comsumer residing in this province - you are required to apply for the local RST and collect it where it is required. Even if your store/shipping location is not in Manitoba. If shipping outside of Canada - this and other taxes is collected from the comsumer from the customs clearing broker/boarder crossing. Generally it is up to the consumer - if he purchased an item and had that shipped to him and did not pay the local RST - then he is obligated to pay the RST on in.

Note: this is what it said - however they (Manitoba RST department) does not/can not audit out of province companies. Thus this is very empty part of the law.