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[Archive Post] Starting a business


#1
     Also, what are the benifits of having a tax ID number besides
getting items tax free?  

Well, there’s the piece of mind that comes from being legal. There
are tax savings once you’re making a profit. Some places won’t sell
to you unless you have a tax ID number.

I whole heartedly recommend it. It’s not that hard to set up and
you’ll take yourself seriously and others will to. If you don’t go
legal now, it’s like saying that this business isn’t going to grow,
isn’t ever going to need to be legal, will always be small enough to
be under the radar.

Furthermore, being illegal has it’s drawbacks, I have a very very
talented friend who won’t even print business cards for fear of
having her illegal, growing, business detected. It’s very limiting.

Good books: everything by Barbara Brabec.

Elaine Luther
Chicago area, Illinois, USA
Certified PMC Instructor
eluther@copper.net

Hi Jackie, Most states require that anyone going into business must
have a business license, also called a reseller’s license or a
transaction privilege tax license. This applies to small businesses
and home-based businesses. The Tennessee Department of Revenue’s site
has detailed info and applications at
http://www.state.tn.us/revenue/openbus.htm.

Hope it helps!
JoAnna Kelleher
Director of Operations/Designer

Hello Jackie, Many cities require a business license in addition to
a tax number from your state. I’m sure some people ignore those
requirements until caught and fined. The government is unforgiving
when it comes to collection of taxes. Undoubtedly the shop
purchasing your work will keep records of those transactions. Many
ask for your SSN or tax number. Should they be audited, (depending
on the state) the record shows disbursements to you. Now with
computerization, it’s easy to cross reference all those numbers.

But in addition to being the "right thing to do," getting the sales

tax number and keeping the records establishes a history. I would
also recommend conferring with your tax accountant so you will know
what records need to be kept and how they are used in determining
your income taxes. Start out right.

Should you decide to expand or buy equipment, you'll probably need a

loan. Unless you have a wealthy relative willing to loan you that
much money, you’ll be applying to a bank. Banks look favorably on
applicants who obey the law and can show a business history that
indicates potential for income. They like honesty and they do want
to get their money back and avoid the hassle of forclosure.

Get the licenses/certificates.  Fees are usually modest.  Set your

mind at ease.

Judy in Kansas
Judy M. Willingham, R.S.
Biological and Agricultural Engineering
237 Seaton Hall
Kansas State University
Manhattan KS 66506
(785) 532-2936

Hi Jackie, That all depends on your state & local laws. In most
states that have a sales tax you’re required to have a 'sales tax’
license or permit. This usually allows you to buy things that go into
the items you sell without paying sales tax on them. It also requires
you to collect the sales tax on the items being sold & then to send
the sales tax collected to the state revenue dept. on a periodic
basis. The periods may vary from monthly to annually depending on
the state & the amount of tax collected.

You could check with your local chamber of commerce or the
city/county/state revenue dept. If all else fails you can also check
with an attorney.

Dave