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Discussion Starter #1 (Edited)
I find this whole EIN, reseller/tax id thing confusing. I'm in Minnesota, which doesn't charge tax on clothing. So I wouldn't collect tax from buyers in MN. Do I still need to have a reseller or tax id anyway?

If I want to get whole pricing on shirts, they usually require some id #, so I should get one even if I'm not collecting tax?

And if I'm creating a home based internet business, where I'm the only employee, do I need a EIN?
 

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amk2u said:
I find this whole EIN, reseller/tax id thing confusing. I'm in Minnesota, which doesn't charge tax on clothing. So I wouldn't collect tax from buyers in MN. Do I still need to have a reseller or tax id anyway?

If I want to get whole pricing on shirts, they usually require some id #, so I should get one even if I'm not collecting tax?

And if I'm creating a home based internet business, where I'm the only employee, do I need a EIN?
You don't NEED an EIN (tax id number) for tax purposes for the IRS (KGB!), but since it's free, easy to get, and you will need to provide it to some companies in order to get wholesale pricing, you might as well get one!

Check out this page from the KG...I mean IRS.

http://www.irs.gov/businesses/small/article/0,,id=98350,00.html

It should help you get going in the right direction.

As far as a state resale number in MN, since MN doesn't collect tax on clothing, then no you wouldn't need one. But like the tax id number, it could make your life much easier if you did have one.;)
 

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amk2u said:
If I want to get whole pricing on shirts, they usually require some id #, so I should get one even if I'm not collecting tax?

And if I'm creating a home based internet business, where I'm the only employee, do I need a EIN?
No, you don't need an EIN number.

As far as the reseller permit number, the best way to clear it up is to contact your local State Board of Equalization and ask them what you need to sell in the state.

It may be that your particular state still needs a reseller permit even though no state tax is charged.
 

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As the above poster stated and EIN is easy to get and when trying to get wholesale accounts it is needed sometimes.

staton wholesale needs a EIN number to register and American Apparel needs all that and a seller's id also so it's safe to get all of it.

As far as tax goes I read on entrepreur.com that if your state has sales tax you only have to charge state sales tax to someone who buys within your state. Example: I'm in california so when someone from california buys a shirt from me I have to charge them sales tax, but if someone from any other state does there is no sales tax. Please anyone correct me if I'm wrong. Hope this helps.
 

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indentityburn, you are correct. But as the OP stated, MN has no sales tax on clothing. So even if someone in their state bought shirts, they would not have to collect the sales tax.

But, amk2u, I did think of another issue for you. You don't have to collect sales tax on the sale of your shirts. But what about you paying taxes on having your shirts screen printed in MN? If you have a state resale number, you wouldn't have to pay taxes on the services provided to you that are for your business. This could save you some money, especially since you can't charge your customers sales tax.

Let's say you get some blanks wholesale from somewhere, and you don't have to pay sales tax. Then you want to get your shirts printed in MN. If you don't have a resale number, that screen printer is going to charge you sales tax on the services that they provided for you. That increases your costs. Which you would then have to eat, or pass along to your customers. But if you have a resale number. I'm pretty sure you wouldn't get charged the sales tax because it is for your business. I know here in TN, I don't get charged sales tax on goods or services because I have a resale number.

Just to help you out (and anybody else that's interested) here's a link to a site that has links to all of the different states' dept. of revenue websites. Just click on the flag of your state and it will take you there. Most of the sites are very thorough, and should answer most of the questions you might have.

http://www.nass.org/sos/sosflags.html
 

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Discussion Starter #6
After reading your replies, I think I will go ahead and get the EIN and state resale number. You guys are so helpful!

And thanks Comin'OutSwingin for pointing out that if I have a state resale number, I can save myself from paying taxes on services provided to me!
 

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I'm curious, would the printing of the shirt be considered a service and be sales taxed in MN? Or are the finished products just considered garments? You might make a point of asking that question when you talk to the state. Let us know what they reply.
 

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I believe you can use your social security# as your tax ID# as well. I believe I read that in "Starting a business in Minnesota" book
 
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