business license

I understand what you guys are saying. I deduct all my expenses (Like Blade Show), I pay my taxes, I have an accountant. BUT I don't collect sales tax and I don't have a business Licence. If I had a retail store then I would collect sales tax and have a licence. Now I don't live in a city or even a town, no zoning and no foot traffic. If you find yourself at my shop, you're either lost or you're looking for me :p I would like to know, how many makers here collect sales tax? Also, I've been doing knife shows (not gun shows) for around 15 years and no one has ever asked me for any sales tax :p Now I'm not wanting to argue with anybody, just curious :) I find this interesting.

Don
 
Don, there was only one time I did the Chesapeake knife show that I was given a sales tax form. I haven't gotten one since. I don't know how the knife show promoters handle that in other states. On several occasions I was asked at the gun shows to display my license but most of the time nobody does. If you haven't been questioned about it I wouldn't worry about it. Like I said, I had to get one for the wholesale pricing. If I had to do it over now I wouldn't bother with it. I have my trade name Razorback Knives registered with the trade commision so no one else in Maryland can use it. It can be used in other states. There's an internet knife dealer in Texas that goes by Razorback Knives that's why I have a - in between Razorback and Knives on my website because they got RazorbackKnives.com before me.
Scott
 
I'm with Don on this one - hard to see the value of a tax number unless you're doing a whole lot of business. The record keeping is a royal pain in the keester if you do it yourself, and rather expensive to hire an accountant. I had a small part time business for a few years and I finally quit it because the bookeeping was taking more time than I spent working!

But there's plenty of fairly straightforward software available for bookkeeping and taxes that make this task as painless as possible (Quicken/Turbo Tax is a good combo; they talk to each other which makes filing taxes much simpler.)

If you do decide you want a business license for some reason, consult an attorney first and find out how much an accountant would charge for your records and taxes. I can't see any benefit in it personally.
 
15 years of fines .. would add up fast.. with the IRS
they try to make it worth the audit. :eek:

if you sell out-of state (by mail), in most of the states you don't have to collect sales tax.
it's up to the customer to report it as use tax..
 
Dan Gray said:
15 years of fines .. would add up fast.. with the IRS
they try to make it worth the audit. :eek:

if you sell out-of state (by mail), in most of the states you don't have to collect sales tax.
it's up to the customer to report it as use tax..
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Dan I pay the IRS and conduct my business legally. :confused: I would have no problem with an audit. Sales tax is a state tax collected on retail sales. I sell very few knives in the state of Missouri, most years none. I rarly receive a sales tax form at shows. If a maker feels they need a business license, they should get one :)

Don
 
I think you guys are missing the point.
The state of Pennylvania requires that anyone conducting sales within its borders is required to collect sales tax. They enforce it strictly enough and they dont give little fines. Ohio is the same way. Im required to get a temporary vendors license and pay all tax collected in Ohio to Ohio.
All im saying is that if you conduct sales at any public venue in Pa ( or any state that collects sales tax) without colllecting for the govt. you are playing with fire.
I also always point out to customers that I dont charge sales tax, I only collect it for the govt.
Pat
 
sunfishman said:
Dan I pay the IRS and conduct my business legally. :confused: I would have no problem with an audit. Sales tax is a state tax collected on retail sales. I sell very few knives in the state of Missouri, most years none. I rarly receive a sales tax form at shows. If a maker feels they need a business license, they should get one :)

Don
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Don I don't have a problem with the way you handle your business
if you have instate sales and don't collect S/tax then your gross earnings are not correct and that could catch the interest of the IRS. if audited.
I'm saying.. here,, if caught not collecting what is due the state, it's jail time , I don't think they care if it's .10 or 10,000 dollars
if audited by the State ( and you don't have to be in business to be audited) this would trigger a looksee by the IRS too.

if we wanted to get fussy about it
I believe us being a manufacture of a product we have another type of tax that is suppose to be paid too..
but I believe being small they're not pushing that.. YET

you/we may never have to face this But then again?? who knows :confused:
 
Here's my 2 cents again. I have Quickbooks on my laptop. I keep everything on that, and at the end of the tax year, I burn my Quickbooks onto a CD and drive it over to my accountant's office. $300 and a few weeks later my taxes are done. That is money WELL spent. Granted, running a health care business is a lot different from small time knifemaking, but the IRS can and will jam you so hard if they get a chance/feel a need to I say why bother?

For the cost of a couple knives per year you can run your business the right way (legally and ethically) and have your taxes done, etc. Seems like a no-brainer to me. To me it's just like insurance.
 
My understanding is that as long as you don't have any employees, you can use your Social Security # as your tax ID #.

And yes, I believe you need a license to sell in whatever state you may find yourself selling in, i.e., if you go to Blade in Atlanta, you need a seller's permit for that locale. Maybe they sell temp permits right there at the show, I don't know ...but I don't believe it'd be something I'd blow off as 'not relevant' considering the possible ramifications posed by, say, one revenue agent being in attendance there.
 
jiminy said:
My understanding is that as long as you don't have any employees, you can use your Social Security # as your tax ID #.

you need a seller's permit
.
Click to expand...

employees don't matter if it's a sole ownership
the SS# would be used as the fed# there are way around that .
nothing to do with the state numbers other than recognizing who you are.

I think your talking about a vendors permit. if you are there selling on the spot?

many guys get away selling without and license
and also
you don't get hit by a bus every day either but it could happen. :)
 
Correct, you have a 'business license' for the location where your business is based (...basically, it's just a 'license to conduct a business'), and then ...whatever passes for a 'sellers permit' at the event you are attending.

So, theoretically, in order to legitimatelly sell at Blade, I believe you would need to possess both a business license and a sellers permit.
 
kingfisher studio said:
I think you guys are missing the point.
The state of Pennylvania requires that anyone conducting sales within its borders is required to collect sales tax. They enforce it strictly enough and they dont give little fines. Ohio is the same way. Im required to get a temporary vendors license and pay all tax collected in Ohio to Ohio.
All im saying is that if you conduct sales at any public venue in Pa ( or any state that collects sales tax) without colllecting for the govt. you are playing with fire.
I also always point out to customers that I dont charge sales tax, I only collect it for the govt.
Pat
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This is exactly my point. If knifemaking was my sole income and I claimed it as my income when filing my income tax then I would be concerned about the sales tax issue. If I was starting out and only a hobby maker looking for some extra cash I wouldn't bother with a license. If I was eventually planning for the long run and make it my sole income being a fulltime maker, then I would go ahead and get a license. If you sell a product and your state has sales tax, then it's your responsibility to pay sales tax to the state. If you do business in another state let's say a trade show, that state wants sale tax because you did business in their state. One reason I don't do gunshows in PA is because they are a royal pain in the ass about collecting sales tax. :grumpy: Messing with the IRS can end up being costly. To me it's not worth it so I pay my sales tax on products I sell.
Scott
 
I think I'm finally glad I'm nobody. :) I don't make many knives and they're all private cash sales. I've never set up at a show; if I ever do I think I'd be smart enough to pay the appropriate taxes. I just hate bookkeeping and filling out income tax forms. I try to keep my life as simple as possible in that regard but I guess if it comes to it, it'd be simpler to do all the record keeping and depreciation than risk a big IRS hassle... Good discussion, thanks.
 
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