Tax Resale Certificates

[BuzzKillington]

I was looking to open an eBay store and found a dealer who would sell to me but only if I had a "Tax Resale Certificate."

What do these do to you in the long run? Will I get hit hard with taxes at the end of the year?

Does anyone here own a business that could help guide me in the right direction for filing the right paperwork and all that jazz for an eBay business?

[Airbozo]

The Tax certificate is just a license to show that you have registered with the government (state). When doing business as a resale store, you are required to pay taxes to your local state. This is NOT a once a year deal. I have a California state resale license and I am required to make quarterly payments. I even have to file paperwork if I don't have any taxes to pay. When I first applied for my small business license I used my SS number. Once I started reselling stuff I had to have a permanent number.

Check with the local small business administration office. What state are you in?

[Oneslowz28]

Airbozo hit the nail on the head. You have to make payments quarterly, and file paperwork if you have 0 sales for that quarter. I too started under my SS number but quikly had to change to a EIN as it was required for the Sales Tax certificate. Getting a EIN is as simple as filling out a short form on IRS.gov.

[BuzzKillington]

I'm in California as well.

How much is small payments? How difficult is the paperwork? I just wanted to start selling here and there to supplement my income. If the taxes are ridiculous then I think I'll avoid the drama.

[Airbozo]

I'm in California as well.

How much is small payments? How difficult is the paperwork? I just wanted to start selling here and there to supplement my income. If the taxes are ridiculous then I think I'll avoid the drama.


From what I remember...
Actually the only payments you make are on the items you sale that are subject to sales tax. If you don't sale any items subject to the state sales tax, you only have to file the paperwork and no fee is required. (also I do not think that there is any fee or penalty for not filing when you have no tax to report. I have not filed in a year or so since I have not had anything to report and my tax person said not to worry about it. CHECK WITH YOUR OWN CPA OR FINANCIAL PERSON TO VERIFY THIS) The paperwork is not that difficult. The documents that the State Board of Equalization gives you when registering, outline the services that are subject to taxation. They also either give you the breakdown of what states require you to collect sales tax or point you to the information online.

Even if you don't end up selling stuff, the whole process is very enlightening...

Contact the California State Board of Equalization HERE (http://www.boe.ca.gov/info/reg.htm).