I love this forum.. I am starting a new internet shop for small gifts in NJ.. Do not know how to start ?? should i creat an LLC, and if I do so can I use this LLC idetification number to avoid paying sale tax to the whole salers. I nedd help to start

You most likely do not need to form an LLC to start your business. Depending on the local requirements you will probably need three things to get started.

1) Resale Certificate from your State Board of Equalization. Contact them and ask about filing fees, where you can file and if the forms are available on the Internet. Here in California there is no fee for this.

2) DBA - Doing Business As from your County Clerk's Office. You need this if you are not going to use your legal name as tha name of your business. There is usually a small filing fee and many jurisdictions have a publishing rule so people can file complaints about the choice of your name (never had it happen but it can). I live in Los Angeles County California and the fee was $23.00 for the first name and $4.00 for each additional name at the same filing. There is also a requirement to have the information published in a court approved local paper. If you have this then look around because prices vary widely. We ended up going with a small local journal which charged us a total of $64.00 for the filing of the paperwork and the publication.

3) Business License from your city or county depending on jurisdiction. Each city has its own requirements about issuing business licenses so you need to contact them. I paid $**.00 for mine and had to apply for a "Home Based Business Permit" as well. Basically the permit is a zoning override allowing me to do business in a residential neighborhood. If you don't own your residence, you will most likely need your landlord's approval as well. The permit didn't cost us anything.

Of the three the business license was the most expensive and we have to renew it every year. The DBA has to be renewed every five years under California State Law. But these are the only three things I needed to start my online retail business which is very similar to a standard gift outlet. You don't even need to apply for an EIN until you actually have employees, you would just claim the business on your 1040 return using Schedule C. Your state will give you instructions on remitting sales tax on either a quarterly or annual basis.

What if the online business doesn't sell goods but rather a service for customers? Since I'm a Sole proprietor then I wouldn't need to fill out any tax id correct?

Services aren't taxed, only products sold within the states that charge sales tax.

ncmd - check all the rules for collecting sales tax in NJ. I have an online store and charge sales tax only on orders shipped in GA and each month the state sends me a pack of forms to fill out and turn in with the check to pay the month's sales & use tax.

Have you figured out how you're going to process transactions and ship the orders?

I went with an S Corp just for all the benefits and protection it offers.

My online store has been an eye-opening experience for me so if you need more specific info, email me at diane@bouncepublishing.com.

Diane

The business writer who helps people grow their small business
http://www.BouncePublishing.com

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