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A few questions about making this business legal

by invadercow
4 replies
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This is my first time setting up a legal business.After a bunch of research I've decided to give Amazon FBA a try because it fits me better than ebay. I'll be possibly using some drop shipping, but mostly buying from light-bulk wholesalers and in the future I'll be importing if this goes how I'd like it to.

I live in Florida in Manatee County and I'm trying to register a Sole Proprietorship

I've run a newspaper ad so I can register for a DBA, that's done.
I got my EIN today.
Now I'm having issues with whatever else I need. I believe I'm required to register with the state to deal with sales tax, but how does that work with FBA? I'm shipping to Amazon's warehouses and then they're delivering to the buyer? I have no idea what to do about sales tax.

I've also heard that I need to register for a resellers license as most wholesalers and suppliers require that. Is this true?

And last, I need a business license (I think?), but I dont see anything about an online retail business here: MyFlorida.com - Taxonomy - Business Licenses, Permits and Regulation

I just need help knowing what to do next and what I need. If this belongs in another subforum then I apologize.
#business #legal #making #questions
  • Profile picture of the author kjamesnv
    I am not a lawyer and can not give you legal advice. But I have owned many businesses and I can tell you what I would do.

    Normally one will need a state business license (resale) and possibly a city tax license depending on where you live. Many vendors banks etc. will not deal with you unless you have at least a state tax ID. Some will also require your Federal EIN (banks, merchant accounts) and occasionally they will want a City license.

    As far as sales taxes this is a complex area when dealing with Amazon. I would check with them and see what guidance they have. I would assume they have information about how to deal with this in regards to FBA.

    BTW you were looking on the wrong page of the Florida site. Try this one:
    MyFlorida.com - Taxonomy - Starting a Business in Florida
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    • Profile picture of the author DSGDSG
      Unfortunately I can't comment on what is required in florida. I can say however that you register with your states IRS office for your business and they give you a license. Here it's $20 unless you're selling alcohol or cigarettes then it's more. Your EIN is for federal registration. If you just register with the state as a sole proprietor your social security number acts where an EIN is needed. You'll have to file your sales and use tax for florida, usually it's quarterly but I don't know how they do it down there. What will happen is you will report your quarterly sales on one line and how much of those sales were shipped to a florida address which then you will owe your tax on. You'll also have to keep track of any supplies you use for your business which you didn't pay tax on and then pay the tax for that. Finally you print out a tax exempt certificate to give any florida suppliers you may buy from and fill it out so they can keep it in their files on you. This way you will not pay tax on the products you buy from them unless it's sold to a fellow florida resident.

      Now, keep in mind I am not a lawyer. I am just a business owner in another state and this is how things work here.

      HTH
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  • Profile picture of the author invadercow
    Okay I just registered at a state level for taxation. I now think I just need a reseller license, a business license, and possibly a few state licenses.
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  • Profile picture of the author ohgworld
    I am from Florida as well, I like to give my two cents to your sales tax questions you posted - but understand that I am not a lawyer nor a tax professional, as they only can give you correct advice in this matter. ....

    So far you have done the correct steps, but as for collecting sales tax, you have to apply for a 'Sales Tax Certificate' (under your d/b/a name) with the State of Florida .... you can do that best directly at the States website at: " SunBiz.org " .

    Once you receive your Sales Tax certificate, you are ready to go for selling. ....

    NOW, and this is very important, you have to understand what your obligations are when it comes to collecting sales tax(es) when doing business within 'Amazon', as there are TWO distinctions you have to make (but consult your lawyer or legal tax consultant to make sure).

    First, if you are selling on Amazon with Merchant Delivery (i.e. you deliver from your warehouse), than you only have to collect Sales Tax for customer deliveries Within the State of Florida .... But if you plan to sell via FBA (Fulfillment by Amazon), it can/will become complicated, as you will have to collect sales tax for all states where Amazon has its warehouses .... and on top of that, you should know that Amazon has recently signed a NEXUS TAX agreement with the State of Florida to collect sales tax beginning 06/01/2014 as they will be opening two new warehouse in Florida! .... You have to be very careful here on how you will have to set up your account regarding the Sales Tax collection when doing FBA, as it can be a real mess and a lot of work, as every Nexus state has different sales tax regulations, and you will have to apply and register with every state the sales tax collection applies to. ....

    I would suggest that you Google the meaning of the word 'Nexus Tax', and get some more information on forums or maybe here at: salestaxinstitute.com ....

    Again, so far you have everything in a correct way, and I wish you nothing but a lot of success
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