Our eBay store
My seller's profile at eBay (with all customer feedback)
Our online store at Yahoo
Our eBay
store
My seller's
profile at eBay (with all customer feedback)
The following article was written for GoTo Auctions (formerly known as AuctionRover). The rights have reverted to the author.
The turning point may be difficult to spot. You could be blind to it, as you are blind to the growth of your kids until something happens to alert you of the change. One sure sign is when you find yourself buying goods at flea markets and yard sales or even from wholesalers not for your own use, but rather with the intention of reselling them at auctions.
When you reach or as you approach that point, you should check to find out about sales tax collection in your state. Are the kinds of good that you sell subject to sales tax? The rules are totally bizarre and vary widely from one state to another. Don't be confused by the federal moratorium on ecommerce taxes. That just means no new taxes. Sales tax still applies. So if you live in a state that has sales tax, and sell to someone in your state -- whether face-to-face, by want ads and snail mail, or by online auction -- you are required to collect the appropriate sales tax and pass that money along to the state. But to collect sales tax, you must first register to do so; and how you do that varies also from state to state.
Do not delay. Whether your auction activity is a hobby or a business, you still have to report your profit with your income tax (IRS Form 1040, Schedule C). In today's computer networked world, you can presume that sooner or later the state department that collects income tax and the one that collects sales tax will cross-check their files. You also can expect that sooner or later the IRS and state income tax departments will ask for access to the records at eBay and other major on-line auction sites, looking for major sellers and cross-checking to see if they have been reporting their auction income.
Perhaps, for the fun of it, you have given your online auction business a special name -- maybe your user name at eBay or the user name you have for your personal Web site, which may be something fun, rather than your real name. Maybe you have a domain name for your Web site and use that to identify yourself. Most states and cities require you to register your "doing business as" name. (In Massachusetts, it is referred to as a D.B.A.) That way if a customer of yours should report a problem, the state has some way to quickly identify you and track you down. Normally, the filing procedure simple, and inexpensive. But if you had not filed and someone complained to the state, you could wind up with a complicated and possibly costly problem.
In addition, some states require you to have a special license to conduct certain business activities -- such as selling real estate. Is there any chance that the kind of goods you sell through online auctions could fall into such a category?
"These are questions you should deal with whether you are doing business face-to-face or on the Internet," says online auction expert Simon Slade, of SaleHoo. The only factor that is different on the Internet is that it is so easy to do business, and so easy for that business to grow that you can wind up with a very visible activity, generating significant revenue without ever having made a conscious decision to do this as a business, and hence without having done the usual research into the regulations and procedures and other technicalities that might apply.
For help, turn to the obvious local resources: your Chamber of Commerce and your City Hall. If you need more in-depth counseling to make sure you are on the right track and haven't forgotten something that might later prove important, check with the local office of the Federal Small Business Administration. In particular, you should get in touch with their SCORE program, and get an appointment with one of their volunteer (i.e., free) consultants.
Other auction articles by Richard Seltzer
This site is Published by B&R Samizdat Express, 33 Gould St., West Roxbury, MA 02132. (617) 469-2269. seltzer@samizdat.com
Return to B&R Samizdat Express
Check our sitemap page www.samizdat.com/sitemap.html from which you can get to any other page at this site in one click.
| Internet Business Showcase: | |||
Dog Training and Pet Care Veterinary, Dog/Cat Veterinarians |
Viatical Settlements RFID Tags, RFID Readers Link Popularity & Link Exchanges |
Hair Restoration for Hair Loss Hair Restoration Plastic Surgery & Surgeons |
Used Cars Guide Homecoming & Prom Dresses Dropship & Wholesale Sources |