posted on November 28, 2000 10:27:21 AM new
Hi all - I might as well fess up here...I don't know a THING about collecting and paying sales tax on my ebay sales. I am keeping records towards paying income tax, but I do not have a small business license.
How do you know when you are required to collect and pay the sales tax?
Is that something I should ask our family accountant?
posted on November 28, 2000 02:40:33 PM new
In most sales tax states, tax is owed on all sales, even such things as garage sales.
As a practical matter, this is difficult to enforce. What is much easier to enforce is a requirement based on business licenses. If you get a business license, you may well start receiving forms from your state to fill in with sales numbers, and a demand for a check for what's owed.
In states with both income and sales taxes, expect income tax people and sales tax people to share data. Reporting one without the other is likely to prompt an inquiry.
Discovering those who run substantial businesses without a license is the realm of yet other investigators, usually from the federal IRS, but often with help from local people and local law enforcement. They don't catch everyone every year, but with enough years and enough dollars, the odds of sliding through go way down. This is what people go to jail for.
posted on November 28, 2000 03:09:01 PM new
There's a line of books called "How to Start a Business in...." that is very informative and spells out all of the basics -- from business licenses to sales tax and other state laws.
Editions are available for the following states:
Florida, Georgia, Illinois, Massachusetts, Michigan, Minnesota, New York, North Carolina, Pennsylvania and Texas.
If you live in one of these states, I recommend the book!
