Do I really need a tax ID # to buy wholesale supplies?
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there's conflicting info on the web about this...some sites say all i need is a ss#. some places don't even ask for that, but the larger gem shows i want to start shopping at say they need a tax id#. i just hate shelling out $128 for something i don't actually need.
Posted at 9:12 pm Mar 1, 2007 EST
a tax id is not ordered thru a site. Your tax id is thru your state. It is a # you get to file your state taxes(sales tax), you also can get a federal Id #.
It is a certificate you receive with the sales tax Id #. Big wholesalers ask for this because simply you suppose to have it to run a legimate business ( i donot know how it works for home business or internet business). Because alot of us donot accept taxes online.
I say go to your small business association and ask these questions for your state, it is better safe than sorry.
Even a home business suppose to have a license, federal id # and i guest a sales tax # if you accept taxes. Most of all - your business name suppose to be registered so no one can swipe it( if they do - you cannot prove it with nothing legal). All this is done thru the government.
To make your business legit, go thru the process of doing this. It may start off just trying to order some beads but later down the line be something else.
Any money you make as a business suppose to be reported thru a process for a year.
Right now if you donot have these things, your business is invisable as a business thru the eyes of the law(as long as you donot get caught)
Posted at 10:05 pm Mar 1, 2007 EST
you are correct in that you don't have sales tax on internet sales. I don't know that honeybee is selling only on the net. It is by physical location and that is why in catalogs and things sometimes you have to pay. it will say something to effect of sales tax for --- --- ---. They have to charge tax if they have a location in that state, whether it be a warehouse, sales office, store, etc. It is technically called having Nexus.
If you want to buy wholesale (and not off the internet) from a local bead show or stores, you hav eto have a tax exempt status with your state. I would assume the only time this is not needed is in states (there are 6 ) that do not have sales tax. i cannot remember all of them ( I haven't worked for 12+ years now.), but I know Oregon and maybe new hampshire ( it's a new england area state)
That's why the majority of corporations are incorporated in those states.
There is no federal sales tax, so what is the purpose of an irs issued cert? Is it you PIN nimber for federal income tax? This is needed for a business, but not related to sales tax or reselling. It is a number thta identifies you as a business for income tax purposes. You can just as easily use your SS# for this purpose and depending on your income from said business, may have to file seperately or you can do a form schedule C on your yearly income tax (profit and loss from business )
Posted at 10:16 pm Mar 1, 2007 EST
the federal and state are seperate tax id's. You need a federal regardless, you cannot charge someone tax from anothner state and just keep it, you have to file it. You can use your ss# until you receive your federal id # but you can call and they will give it to you over the phone after you answer the questions they ask(which are simple)
Posted at 10:20 pm Mar 1, 2007 EST
If you google sales tax + your two letter state code - example I live in PA so "sales tax PA" should pop up your state's website to get a sales tax license. You can have them for multiple states - good if you're travelling to several states to conduct business. The big pain in the butt is remembering to file what you owe quarterly or semi-annually as demanded by each state that you hold a license from.
Posted at 10:24 pm Mar 1, 2007 EST
Let me clarify if I can - if you're a DBA chances are your Federal Tax # - the one that goes on your IRS forms in April - will be your SSN. You will need that number to get a sales tax license in most states. however, since every state I have them from require them to be posted in a visible location, the state assigns you a random number that becomes you sales tax id #. This # (and license) allows you to collect sales tax from buyers when they purchase an item from you. It also allows you to fill out an exemption form at wholesalers so they don't charge you tax on things that will be directly included in things you are charging tax on (so the stuff does not get taxed twice) or stuff you are purchasing for direct re-sale. (In which case you'll still be collecting sales tax on it.) The exception - if you have stuff at a consignment type shop, they will typically collect the sales tax for you because they are taking a percentage so you will want to keep a ledger of taxable sales + tax owed for each sale, and a separate column for Non-taxable sales.
Posted at 10:30 pm Mar 1, 2007 EST