Like the title says, from the filing process and tax questions to tax policy and reform, you can search and share All Things Tax here. This is the place to find answers to all your general questions that don't fall under the other categories. And just a reminder: questions about software or online filing should be posted in DIY Products.
01-22-2018 08:51 PM
I have a FT job, but sell items online (Amazon and Ebay) to help raise some extra money for my family, it is a very small business and i do have have an actual business, everything is done with my regular personal taxes. I do not have any type of seller license or anything like that.
I sell small things i can buy in stores on sale.
I am also a holistic health coach, which i do not make any money on, i provide help to my friends, community and church free of charge, and by being a Certified Health Coach i was able to open a practitioner account with a supplement company, which i have a wholesaler discount and but items for my clients (at no profit), but i also buy and re-sell online for profit. Until last year i did not need any license (seller license for NC where i reside), just purchased sold and declared on my income tax.
This year the company is requiring a Seller License from the state to continue the business, but as i mentioned i do not have one. My question is, what will change if i get the license from the state of NC? I do not know what is the difference between having one or not. Will i still do my taxes as i do every year? I currently do schedule C (i believe) to declare my personal business. Would i have to start asking for sales tax? i sell online only (amazon and eBay) i do not have an actual store.
I dont know if it would be harder to have the business if i apply for a state seller license.
Thank You for your help!
01-22-2018 09:11 PM
Welcome to the H&R Block community.
Getting a resale license is not going to affect your tax return negatively.
In fact you should have a resale license for any business in which you sell a product. You generally have to collect and pay sales tax on sales to residents of the state in which you are located. You must pay sales tax on your North Carolina sales. However, some states are changing laws so that if a resident purchases something online they have to pay the sales tax no matter what. The big companies like Amazon will automatically charge for sales tax in accordance with those new laws though, or they will inform you of a new law when one is passed if it affects you.
As for your tax return, you can deduct the cost of getting your license on Schedule C. You can also deduct the sales tax you pay on Schedule C since everything that comes in is part of your gross revenue. In other words, sales tax will not increase your tax liability.
If you have any other questions I'll be glad to help.
Senior Tax Advisor (Tampa, FL)
01-23-2018 08:12 PM - edited 01-23-2018 08:25 PM
Thank You for your help!
I read somewhere that i would need to submit the sales tax often to the state, do i understand this correctly? or could i just continue to do once a year?
Would i be applying to Sales and use tax or withholding tax? i believe it is the first option, but wanted to be sure. Also it is also asking me "Type of accounting method that will be used whether cash or accrual" which would be my choice here, i am not sure of the difference.
Thank you so much!
01-23-2018 08:36 PM
You're quite welcome.
You are applying for sales & use tax. This is the sales tax that you collect from customers who reside in your state.
Normally sales tax that you collect from your customers is paid to the state once every quarter, but if the business gets big enough they will switch you to a once per month payment schedule.
The income tax on your income is paid once per year as long as you expect to owe less than $1,000. If you expect to owe more than $1,000 overall for the year then you have to make quarterly payments to the IRS & state for the income tax.
01-28-2018 02:25 PM
Thank You once again for your help!
I am debating whether i should continue to try to re-sell the products and apply for a business license or if i should just give up. I have a couple of questions that would help me make that decision:
1 - I sell online at Amazon, so i am sure they have in place tax entry resources to automatically charge NC customers the sales tax, but if i have to pay quaterly to the state how would that work? i would think Amazon would have some type of report that shows me the state sales and the sales tax for that quarter. But not sure how to proceed with this. (currently i just do once a year, does that mean that i am not paying the sales tax? every year o owe the state and am almost even (get some back) from the federal so i assumed it was due to sales tax)
2 - In my original post i mentioned that i sell these items to clients, friends and family at no profit, also use some items myself. How would that work with state tax? do i still need to charge tax, even though it's basically free? specially with personal items that i may buy for myself and not re-sell/
Thank You so much!