What is the purpose of a license and why do I need one?
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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.
What is the purpose of a license and why do I need one?
What is the purpose of a license and why do I need one?
Hi everyone! My brother and I have decided to team up and start selling t-shirts via the internet. This is our first time doing like this and its just me and him. However, I was wondering do I need a license to sell shirts?? Where do I get one (I live in VA, USA), what kind do I need, why do I need one, and how much does it cost? I know I have a ton of questions but I want to get all the information before we start up. Thank you very much.
Re: What is the purpose of a license and why do I need one?
you do need a lic in the state where you live. It is just a sales lic...you must collect sales tax as required by your state and also declare your sales as income....less the cost of doing business. And just as important, a lot of wholesale companies will not sell to people without a sales lic...they only want to sell to the professional and not let someone buy their personal clothes at cost
Re: What is the purpose of a license and why do I need one?
Quote:
Originally Posted by Cherriibomb
But what happens if I just selling my t-shirts online through my website. Would I still need a license for that?
Yes, you'll still need a business license in Virginia. You will need to collect and pay taxes on sales made in the state of Virginia (via the internet or not.) You do not have to collect taxes on purchases made from outside of your state, but if the mailing address of your customer is in Virginia, you'll need to collect the appropriate taxes.
Last edited by MardiGrasTexan; March 25th, 2009 at 10:53 AM.
Re: What is the purpose of a license and why do I need one?
You don't really need a license if you are just starting out. I operated in CA for a year or so before I had enough sales to really merit getting a business license.
Re: What is the purpose of a license and why do I need one?
Never take advice from someone telling you it's OK to break the law. The states that require you to collect sales tax require it to be collected whether you are big or small on all sales within their state borders of taxable items. Do you really want to run the risk of having to pay several hundred dollars per day in fines that you are found to have been operating as a business without a sale tax license. If you are small, it can be enough to put you out of business. The state and federal government and their tax requirements are 2 things that you don't want to mess with. Do it right from the start and don't listen to people who are telling you to basically risk everything just because they got away with it. A sales tax permit is usually free or very cheap. It's not worth it to risk getting hit with tax evasion for refusing to get a free piece of paper.
Re: What is the purpose of a license and why do I need one?
Quote:
Originally Posted by akasharose
You don't really need a license if you are just starting out. I operated in CA for a year or so before I had enough sales to really merit getting a business license.
For your own good, do not follow this poster's advice. If you're going to start a business, then start a business the right way and run it the right way from the beginning. What's the point of not getting the license? So you can avoid paying taxes? If you collect the appropriate tax when you make the sale, then what's the problem? Are you just trying to avoid some start-up costs? If so, guess what, you're not ready to "start-up"....save up until you can do it right.
Re: What is the purpose of a license and why do I need one?
I live in CA and obtained a license the same day. I downloaded the forms from BOE, took to my local office, signed, and got a copy of my license (technically I could start with that) until I received an original by mail (I believe it was less than a week). Save yourself the heartache and get the license. Go to your state's website and see if they have the forms and look for your local office. It takes no time at all.
Re: What is the purpose of a license and why do I need one?
Jeez! I'm not trying to create criminals here!! In my *humble* opinion it just isn't that big of a deal until you have an established business actually making sales in your state. It takes a lot of work to create a money-making website and a business license does cost money and needs to be renewed each year. And once you have it, you have to keep them up to date on your address and file state tax forms regularly. What if you don't like the business and end up ditching it before you even make a sale in Virginia? We're all busy people, living busy lives. I personally try to keep my responsibilities to a minimum. The BOE is not the gestapo, they aren't going to hang you for selling a couple T shirts online. The first year you make sales in VA, get a business license and pay the sales tax to the BOE. No big deal.
I've had really nice experiences with both the IRS and the BOE. I was just offering an honest opinion based on my experience.
Re: What is the purpose of a license and why do I need one?
I think the point of the prior posts was not to minimize the licenses required in the state you live in. If your experience was that of a more casual nature, then so be it. Many vendors require proof of a resale license as well in order to do business with you. Furthermore, I think many here where just telling Cherriibomb to do her homework. In running a business, everything is important: website design, accounting, marketing, PR, etc.
Re: What is the purpose of a license and why do I need one?
Wow thank you everyone for the advice. Akasharose i agree i have no idea if my business venture is going to work or not and i am very busy so getting a license may be for only 2 shirts which would suck. But, I agree with everyone I'd much rather play it safe and legit and get a license especially since it doesn't seem to be a tough process. I thought it would be much harder then just printing, filling and submitting forms. I guess not. So, thanks liltam, MardiGrasTexan, Wjmurray and Charles I appreciate the info and will get the license as soon as I get my equipment!