This section of the forum is for discussing the business and finance issues of the t-shirt industry. Which business structure to use (sole proprietor, LLC, S Corp, etc), how to handle billing, where to register your business and get the proper licensing, etc.
I live in and go to school in Colorado but am from Oklahoma and my perminent address ie parents home is in OK, I am setting my business up here in CO but have a fulfillment company shipping most of my merch from Kentuck, however I am also shipping from here in Colorado.
My question is, can I set up my business from any state I want so that I can pick a state like rhode island so I dont have to pay sales tax when I sell locally online here in Colorado?
Is this legal?
My initial marketing will be locally and if I can get around paying sales tax in Colorado it would save me tons of $$$
Two things.
1) You should be charging your customers for sales tax, not paying it yourself. While this is not required, it is generally accepted and done.
2) The general rule is you charge sales tax in States that you have a physical presence in. If you have an office, building, warehouse, etc, you collect sales tax in the city/state/county that you have it in.
First, congratulations. If you are paying a ton in sales taxes you must have a good business going.
Actually, you should not be paying any sales taxes, except those for equipment and supplies. You should register for a sales tax account with CO, as that is where you are doing business. Don;t try and get fancy, it will only cause you grief in the long run.
As mentioned, you should be COLLECTING, not paying, sales taxes for the state. And, with a sales tax account you will be exempt from paying sales taxes on any goods you purchase for resale. Buy a new printer, you'll pay taxes. Buy a container of tee shirts and you won't.
You should only collect sales taxes for goods delivered in Colorado. If someone in CO wants an order delivered in RI, there is no tax. If someone in NY wants an order delivered in CO, there is tax. Pretty simple, actually. DELIVERED in CO, you charge tax, regardless of where the order comes from.
The only exception is if you wholesale goods to a retailer and the retailer supplies you with a tax exemption number. Then it is their responsibility to collect and remit the taxes.
As far as where they are shipped from, it doesn't matter. The company in KY may have to charge you sales tax on items they ship to KY. Some dropshipper / fulfillment houses do, others so not.
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State sales permit...manipulation? 
