I've been looking to set up an Etsy store, or similar online shop to sell some leather products I make. In my research, I've found that there are quite a few things I have to do in order to stay above board with sales tax laws and all of that since I will be selling taxable items. Before I make the jump into getting all of this squared away, I just wanted to see if anyone has any experience with this stuff, and to be sure that I'm doing it right.

I'll probably set up as a sole proprietorship, so my SSN will be my tax ID and EIN? But I won't use my name as my company name, so I'll have to file a Form 503: Assumed Name Certificate with the state and my county (Dallas). Then I'll file for a Sales and Use Tax Permit. That will get me all the info I need to set up the Etsy shop/online shop with the proper sales tax.

Does this sound correct, am I missing anything? Any advice?

Thanks!

I'm in a different boat (travel agent), but I went down and registered a DBA with Brazos County, and then I got an EIN - so I am using that to file taxes with. I'll be filing for an LLC soon, and 1/1 most likely I will be turning into an S-Corp.

But I was mainly answering that I got an EIN instead of using my social, but I think at the point I am today, it doesn't matter which one, but I think it will after I turn into an S-Corp.

Can you just go to the courthouse for your company name and sign DBA? You may be doing even more than necessary .

You can get an EIN for free online and then get the Sales and Use Tax Permit...in Texas.

Then every quarter do the sales tax payment through the comptroller for sales in Texas. Etsy will charge the customer and pay for taxes that require it in other states.

Ebay is starting to collect and pay Texas taxes starting this quarter so you don't have to do anything. I don't think I have seen that from Etsy so I still file those.

I am not an accountant by the way.

rally-cap said:

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to stay above board with sales tax laws

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rally,

It sounds like you're on the right track.

I wish you much success, but if you get too successful with your out-of-Texas sales (> $100,000 or 200 transactions per year in a single state are typical thresholds), you'll now have other states pestering you to be their collection agent too. That's a change from prior law, and it's due to a recent Supreme Court ruling.

It's always something, I'm afraid.

Just out of curiosity, what type of leather products?

IrishTxAggie said:

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Just out of curiosity, what type of leather products?

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Thanks for all of the replys so far!

Wallets, bags, book covers, keychains, mousepads, and other similarly sized items.

https://instagr.am/p/B2xnPw2BtA7

https://instagr.am/p/BywOovrhlJR

https://instagr.am/p/Bu2MhlXhZtb

https://instagr.am/p/BsyujwGAW5O

https://instagr.am/p/BtJIieoAEHg

Olag00 said:

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You can get an EIN for free online and then get the Sales and Use Tax Permit...in Texas.

Then every quarter do the sales tax payment through the comptroller for sales in Texas. Etsy will charge the customer and pay for taxes that require it in other states.

Ebay is starting to collect and pay Texas taxes starting this quarter so you don't have to do anything. I don't think I have seen that from Etsy so I still file those.

I am not an accountant by the way.

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Would Etsy now collecting taxes negate the whole need to file for a sales tax license in Texas?

I am thinking so if they do. I will have to check to see if I have something from Etsy regarding them starting to collect the taxes. I know Ebay and Amazon are starting to collect for Texas sales which makes it easier on 3rd party sellers.

Just re-read your question and I am not sure I can answer that definitively. I would say to be safe to go ahead and get license since it is free.

Nice work. I followed you on Instagram. I'll PM you sometime soon with something I'm interested in.

Olag00 said:

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I am thinking so if they do. I will have to check to see if I have something from Etsy regarding them starting to collect the taxes. I know Ebay and Amazon are starting to collect for Texas sales which makes it easier on 3rd party sellers.

Just re-read your question and I am not sure I can answer that definitively. I would say to be safe to go ahead and get license since it is free.

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I would get a resale certificate from them for my files. It sounds like they are the end seller and you are selling to them.

I sell online on Amazon and Ebay, just did the assumed name at the local Harris County courthouse and got the sales tax permit through Texas Comptroller. I didn't bother with an EIN.

As previously mentioned, Amazon and Ebay effective October 1st are handling sales tax collect/remit for Texas (and several other states) and it looks like Etsy is doing the same.

IrishTxAggie said:

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Nice work. I followed you on Instagram. I'll PM you sometime soon with something I'm interested in.

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Looking forward to it!

corndog04 said:

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I sell online on Amazon and Ebay, just did the assumed name at the local Harris County courthouse and got the sales tax permit through Texas Comptroller. I didn't bother with an EIN.

As previously mentioned, Amazon and Ebay effective October 1st are handling sales tax collect/remit for Texas (and several other states) and it looks like Etsy is doing the same.

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Just for clarity, why did you not bother with the EIN? Are you set up as a sole proprietorship? So will those sites withhold and send the needed taxes for you, meaning you don't have to ever see or handle the tax dollar transactions. Do you still need to report to the state?

If you are a sole proprietor, then you ONLY file your DBA in the county of your primary place of business. Form 503 is only filed by legal entities seeking to operate under an assumed name along with their county-level filing.

rally-cap said:

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corndog04 said:

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I sell online on Amazon and Ebay, just did the assumed name at the local Harris County courthouse and got the sales tax permit through Texas Comptroller. I didn't bother with an EIN.

As previously mentioned, Amazon and Ebay effective October 1st are handling sales tax collect/remit for Texas (and several other states) and it looks like Etsy is doing the same.

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Just for clarity, why did you not bother with the EIN? Are you set up as a sole proprietorship? So will those sites withhold and send the needed taxes for you, meaning you don't have to ever see or handle the tax dollar transactions. Do you still need to report to the state?

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If you don't have employees or meet a few other criteria, then an EIN is not necessary as a sole prop.

https://www.nolo.com/legal-encyclopedia/when-does-sole-proprietor-need-ein.html

corndog04 said:

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I sell online on Amazon and Ebay, just did the assumed name at the local Harris County courthouse and got the sales tax permit through Texas Comptroller. I didn't bother with an EIN.

As previously mentioned, Amazon and Ebay effective October 1st are handling sales tax collect/remit for Texas (and several other states) and it looks like Etsy is doing the same.

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Be careful with this. My wife sells on eBay and I do her accounting. I THINK I read that they are not yet handling sales taxes for people on the new managed payments platform. That may be wrong but I was actually researching this over the weekend and am pretty sure that's what I saw. I'll look it up again later this week.

I don't know anything about collecting and paying taxes for online sales, but you might think about forming an LLC to put your business in. If a toddler chokes on one of your keychains or something you don't want the parent to try to take your house in a lawsuit...

SweaterVest said:

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I don't know anything about collecting and paying taxes for online sales, but you might think about forming an LLC to put your business in. If a toddler chokes on one of your keychains or something you don't want the parent to try to take your house in a lawsuit...

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This isn't as foolproof as everyone thinks it is. Adequate business insurance is significantly better protection than an LLC. I actually had a client operating a gun store as a sole prop and when I asked why he said his attorney said the LLC wasn't worth the cost because it wouldn't afford any protection at all. His advice was to spend the money on insurance instead.

I am no an attorney.

LOYAL AG said:

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SweaterVest said:

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I don't know anything about collecting and paying taxes for online sales, but you might think about forming an LLC to put your business in. If a toddler chokes on one of your keychains or something you don't want the parent to try to take your house in a lawsuit...

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This isn't as foolproof as everyone thinks it is. Adequate business insurance is significantly better protection than an LLC. I actually had a client operating a gun store as a sole prop and when I asked why he said his attorney said the LLC wasn't worth the cost because it wouldn't afford any protection at all. His advice was to spend the money on insurance instead.

I am no an attorney.

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This is typically true, but I will toss in the caveat that it wholly depends on the type of business and the fact if the liability pierces through to responsible individuals.

LOYAL AG said:

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SweaterVest said:

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I don't know anything about collecting and paying taxes for online sales, but you might think about forming an LLC to put your business in. If a toddler chokes on one of your keychains or something you don't want the parent to try to take your house in a lawsuit...

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This isn't as foolproof as everyone thinks it is. Adequate business insurance is significantly better protection than an LLC. I actually had a client operating a gun store as a sole prop and when I asked why he said his attorney said the LLC wasn't worth the cost because it wouldn't afford any protection at all. His advice was to spend the money on insurance instead.

I am no an attorney.

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Many times the state has breached the LLC. It all depends on the set up and how you handle it after. I agree insurance is a much better route to go. ***not an attorney