# Selling my products online



## thenaturalway (Oct 6, 2007)

If I sell my products (handmade products, essential oils, fragrance oil, etc). should I obtain insurance, permit, etc? I thought about getting a DBA for my business, but when I read about starting a business, I just get so overwhelmed by the information and a little scared about starting it because of rules/regs.  Please advise! Thanks!


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## Tabitha (Oct 6, 2007)

That all depends on the state you are in. I am in TX too, you are required to get a sales tax number so you can purchase tax free & at wholesale prices & so you can charge tax & pay those in. You can go to your tax accessory local office, fill out 1 simple form & walk out w/ your number. the hard copy will be mailed to you. You then will need to pay your sales tax yearly, which you can estimate on a simple form if your sales aren't too high. You do not have to charge tax to out of state internet sales.

The insurance is a good idea just to cover your butt. There are claim happy people out there that *could* take all of your assets if they *claim* they get a rash or redness.

We finally LLC'ed last year to protect out personal/family property if we were to have a business related case in court. It helps separate the 2. To LLC we paid a company $300.00 (I think) & they took care of everything. i sold soaps w/o the LLC for probably 4 years. We added the LLC when we opened a storefront more because we were worried about people tripping over the cracks in the sidewalk or slipping in water in the public restrooms more so than for soap concerns.


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## soapbuddy (Oct 7, 2007)

I have a business license, a resale number and insurance. It's so worth it!

Irena


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## thenaturalway (Oct 7, 2007)

How do you get a business license? I'm new at all this so any information is very helpful.

I appreciate all responses to my questions.

Thanks!


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## soapbuddy (Oct 7, 2007)

thenaturalway said:
			
		

> How do you get a business license? I'm new at all this so any information is very helpful.
> 
> I appreciate all responses to my questions.
> 
> Thanks!



I went to my local city hall for my business license.

Irena


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## thenaturalway (Oct 7, 2007)

Thank you! I was planning on getting a DBA/Tax ID #.  Would I still need to get a business license or would that suffice? I'll continue to do research online but with the info I've gotten from this forum has been really helpful.

Thank you all again! And if there is other info I need to know, I would greatly appreciated!


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## soapbuddy (Oct 7, 2007)

I sell locally so I need a business license.
I got my Tax ID from the State Board of Equalization.

Irena


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## gbtreasures (Nov 25, 2007)

I called and inquired about a business license (more for the info in case I should ever need one) and was told that if it was a zero impact business, then I didn't need one.  This means if I don't put a sign in my yard, have customers dropping by, delivery trucks, parties, or have an impact on my neighborhood, then it isn't needed; however, I should write a letter to my township stating my business intentions so that it can be on file.  I wonder why it needs to be on file if I don't need a license.  Also, can you obtain a tax number wo the license?  Sticky business!
  :?


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## itsmeroro (Jan 3, 2008)

In our town (in California) to get a business license, you must first file a DBA or fict. name in the newspaper before getting a general business license - generally around $50 to $75 and good for 5 years (I think).  The business license ranges from $45 and up depending on where you are located and the amount of $$ you are bringing in.  I would reccomend this because as a home business, you may be able to use a portion of your electrical, water and so on - to write off for taxes - its great to have a small business - for the write offs.  Keep all reciepts and transactions.  Why not have one, if you are selling goods as a business??  

Cheers!  Rachelle (roro)


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## gbtreasures (Jan 4, 2008)

I know what you are saying, but frankly, I'm not sure how far any business venture would go financially.  Ideally, It would be nice to "test the water" so to speak, before diving in.  Right now, I am not interested in a business,
however, I have thought about it.  It seems to me that if the twp. views a small time beginners  "business" like this, then probably so should I!  It all hinges on the committment level and I just don't have it now.   :?


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## Tabitha (Jan 4, 2008)

In TX if you sell 1 single bar of soap or a muffin a bake sale you are required to have a sales tax resell number, collect & pay taxes on it. They DO NOT mess around when it comes to sales tax. They have literally knocked on my door :shock: !


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## gbtreasures (Jan 5, 2008)

I know another person who had their door knocked on, too!! If I'm ever ready to start a business, then I'll have to cross that bridge.  Frankly, I think anyone who dabbles in a craft has to wonder of their chances to branch out into a business.  How many really want to take on that type venture seriously?  Right now, for me, I'm happy crafting for myself (maybe a few gifts if I get any good enough).


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## CiCi (Jan 26, 2008)

My confusion: A tax id# is necessary to buy wholesale and not pay taxes on the purchase. You then charge the customer taxes on the purchased merchandise and pay that to the state. Sooo...say I do not buy wholesale and thus pay taxes when I purchase my soap supplies, if I choose not to charge the customer for taxes, why would I have to pay the state? Also, I had a tax ID once before. Well, when I had to submit my forms to the state for that year, I had not collected any taxes, myself, as all of my sales were then out of boutiques/craftmalls, who collected and paid the taxes on my behalf. I didn't handle any taxes. The state cancelled my resale permit. With my business license, it was for home occupation (handcrafts). I paid $150/yr and they sent me a license every year. I was talking to someone in that office and told her that I do not sell anything out of my home and no one comes to my home, as I sell all of my items through boutiques/craftmalls. She told me that I should not have been paying for a license. They refunded my money and the next year I didn't get another license. Now, I am extremely confused as to if I need a business license to sell online only and also confused as to if I need a reseller's permit if I do not buy wholesale and thus do not charge my customer sale's tax. They will just cancel again.


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## Tabitha (Jan 26, 2008)

As for the tax ID thing, you are going to buy it for $5.00 & sell it for $10.00 so the state wants to collect money on the full $10.00 and not just the $5.00.

As for the rest you really should go in & talk to your local tax accessor. They can clear things up for you.


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## Lane (Jan 26, 2008)

This topic makes my head spin.... When I was doing craft shows and such, in IA you needed Tax ID #s and then they changed it and you no longer needed it, because no one had one and the craft shows were shrinking... Now I am in Las Vegas NV... I ONLY sell online and I don't charge sells tax on any of my stuff...

I think if you only sell online the rules are a bit "looser"...  :?  :?  :?


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## Tabitha (Jan 26, 2008)

Something I learned when the tax man came knocking at my door ( :shock: , yes he did!) was that if  you make something (from ingredient you bought tax free due to a tx ID number) but keep it or give it away YOU must pay the tax on it. The example he used was if I make 10 bars of soap, I sell 3, I place 1 in my ladies room, I donate 1 to the church bazzar and 5 are on the shelf, when Jan 1st rolled around the govt expects tax on all 5 bars since they were purchased ( or the ingredients were purchased) tax free *someone* has to pay tax on them!


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## Lane (Jan 26, 2008)

Tabitha said:
			
		

> if  you make something (from ingredient you bought tax free due to a tx ID number) but keep it or give it away YOU must pay the tax on it.



I don't purchase my ingredients with a Tax ID number, if I have to pay tax, I pay tax, but I never charge Tax on my products.... So.... would that still count?  :?  See, my head already aches...


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## Tabitha (Jan 27, 2008)

The govt still wants that money whether you chose to pay tax on it originally or not UNLESS you bought it for $5.00 paid tax on it & sold it for $5.00. If you sold it for $10.00 they want that extra tax when the item increased from 5-10 bucks.


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## Lane (Jan 27, 2008)

:?  :?  :?  I was just told if what you put back into your business evens out what you make, you don't even have to worry about it. BAH! I should probably go set up an appointment to go talk to someone.


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## Tabitha (Jan 27, 2008)

If you have a biz loss you _probably_ do not have to worry about filing the *biz taxes *because they are _probably_ not going to come knocking at your door because you are small beans HOWEVER.... they still want the *sales tax *& _will_ come knocking at your door for it.

 (deleted)

I do not suggest anyone blow them off. They are more than happy to sit down with you and answer all the questions you have in real simple English unlike the brochures  and websites that are hard to understand.


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## Lane (Jan 27, 2008)

For some reason it comforts me, the idea of someone actually coming over to talk to me, than having a letter randmoly sent that I have no clue how to respond to.


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## gbtreasures (Jan 27, 2008)

Tab - How did they (or you) arrive at the conclusion you owed them $------ for taxes?  One person I know whose door was "knocked" on, put up signs in her neighborhood to advertise a home party where she sold her craft.  This drew attention to her home based business and caused her some problem.  What is the purpose of a tax id# anyway?  Some on-line places accept a ss# in place of it.  A local personnel told me I would be surprised at how many home based businesses there are, especially on-line businesses,  and nobody even has a permit let alone a tax id#.  Go figure!?  Frankly, I don't have either right now, and I'm not sure I even want to go there.  I am curious,
however.


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## Tabitha (Jan 27, 2008)

I keep an invoice book. I added my sales for that year together & multiplies by 8 1/4% which is my states  sales tax. They took me at my word & did not ask to see my sales books or bank statements.

A tax ID number benefits you by saving you from having to pay sales tax on your supplies or items you plan to resell.

A tax ID number benefits the govt by requiring & permitting you to collect tax for every item you sell.


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## Tabitha (Jan 27, 2008)

When an online shop collects you SS# or your tax ID number, that is supposed to be for their books. Since they are not ccharging you the tax they need to be able to tell the govt they sold it to you so the govt can hold you reliable for the tax. They may or may not turn those figures & numbers in when they file their taxes. The SS # or the tax ID number is just a way for the govt to keep tabs on everything.


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## gbtreasures (Jan 28, 2008)

You were lucky they didn't hound you further, and took you at your word.  Thanks for the crash course on tax id#'s.  I know one thing, if I ever do sell, I'm going to research the subject thoroughly.  But for now, I'm perfecting my bath salts and bombs.  Even these simple things aren't as easy as I thought.


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