What do I need to start selling online & what information to collect for tax filing?

Asked in Tempe, AZ - about 1 year

I am interested in selling merchandise online, what information do I need? I have done some research on my own and found out the following but still have some questions that I hope you experts would be able to offer help. Thank you. --> I will need a seller's permit (I reside in Tempe, AZ) --> From the search I did on AVVO, it looks like I will be better off to register as a LLC or something like that? My questions: What information do I need to collect for tax filing? Is there agency/service that can help me with tax filing? I will be selling online primarily so all transactions will be done online. What kind of service/agent/lawyer available for this type of matter? How much are the service fees?

Attorney Answers (2)

Dana Whitney Atchley

New York Tax Lawyer

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Answered about 1 year ago. What you really need is a good business attorney or a CPA to assist you in setting up your business properly, not the least because there are too many facts and issues that need to be taken into account than can be described in one question post on Avvo. You also need to speak with someone familiar with setting up a business in your local area because there are many issues that are germane only to your locality - such as taxes and licenses needed for the town or city you live in - that can only be adequately handled by an attorney or a CPA in your area.

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Martin L Bearg

Livingston Business Attorney

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Answered about 1 year ago. Unless things have changed, Congress imposed a moratorium on the collection of sales tax on sales made through the Internet.

Some states, as in NJ, allow a reseller, to avoid paying sales tax on purchases, but need to collect on sales to NJ residents. This is why my colleague suggested you speak tto a CPA.

Yes, it is not a bad idea to establish a corporation or LLC through which to conduct this business, and to maintain a separate checking account for this entity. Depending on what type of entity you chose, you will be required to file a Certificate of Incorporation for a corporation or a Certificate of Formation or Organization for an LLC, and then register the entity with your state's Division of Taxation. Taking a wage from a corporation will require the withholding and payment of payroll taxes, while taking a draw from an LLC will require that you pay estimated income tax.

By all means speak to a local CPA and/or business law attorney.

The foregoing is not intended to be legal advice upon which you may rely as I have not been retained for this purpose.