Wholesale & eBay Forum Importing & Customs Trying to start an eCommerce business - do need a tax ID?

Trying to start an eCommerce business - do need a tax ID?


9475adrian
Free Member
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  • Joined: 29 Jun 07
  • Karma:
4 Jul 07 12:39:04 am
I am new to SaleHoo. I am trying to start an eCommerce business. I'm at the stage of gathering information right now.

Do I have to charge sales taxes on items I sell online?
Do I need a sales permit & a Tax ID?
Is an EIN the same as a tax ID?
Should I just get a DBA for my business name or LLC?


grace-salehoo
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  • Karma:
4 Jul 07 02:33:38 am
Do I have to charge sales taxes on items I sell online?


It depends on the state you are in. If you do need to collect sales tax, it is only on goods shipped within the same state. The problem is that this can make you less competitive, so some sellers get around it by setting up a mailing address in Nevada. eBay has its own tax table but recommends you speak to an expert Link hidden: Login to view.

Do I need a sales permit & a Tax ID?


Regarding a sales permit - it depends on your state. The best idea is to ring your local tax offer and they will be able to tell you what you need to do.

You don't need a tax ID unless you are ordering from a wholesale supplier that requires it (whether or not a supplier requires a tax ID is shown in the supplier details). Usually the only suppliers that require a tax ID are based in the US and require large MOQs. A tax ID is easy to get from your local tax office. Give them a ring and they will tell you what forms you can fill in - sometimes you can do it over the phone.

Is an EIN the same as a tax ID?

See: Link hidden: Login to view
No - an EIN is only required if you have employees or are a business entity. A EIN is federal, a tax ID is local.

Should I just get a DBA for my business name or LLC?


It really depends on how you wish to run your business. Many eBay businesses run as a sole proprietorship which has a lot of advantages while the business is still small - especially if being run from home. However, a LLC protects you personally. I wouldn't think a DBA would be necessary - these are usually used for franchises. However, you really need to discuss this with a lawyer as the best option can be very subjective.


Grace


berk-llc
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4 Jul 07 03:47:02 am
If you are doing business under your full name and nothing else, you do not need to file any paperwork. If you are doing business under another name you need to file DBA (Doing Business As) with you secretary of state for the state you are in. In Minnesota, you also need to place an add in a trade journal for at least three months indicating your DBA name. This is required by the state. I just register LLC's because you can have the name you want, (it must include LLC in the name) and it is about the same price as filing the paper work and taking out an add.

The tax ID can be created for free and it is a federal tax ID. Go to the IRS.gov and search for it. You can do it over the phone and it takes about 10 mins. Be prepared to file tax returns though. An LLC can be treated as a partnership or sole proprietorship for tax filings, and you get the personal liability. In my personal opinion, it is the easiest and safest legal entity.


grace-salehoo
Full Member
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  • Joined: 15 Jun 06
  • Karma:
4 Jul 07 04:20:34 am
Thanks for your clarification Berk LLC :). I was thinking of a sales tax ID which is issued locally.


Grace


 

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