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Here in our state and I believe all states you can have a "hobby business". as long as you pay taxes on any actual profits at the end of the year, you are not required to be a registered business at all.
You may want to double check to make sure that sales taxes are not also required to be paid.

I know in California, if you're making sales, you have to collect/report/and pay sales tax.
 

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Sales tax is required on anything you sell. Here in Missouri, some counties require you to collect sales tax on garage sales! Collecting sales tax does not necessarily mean you are in business. If you do get permits and business tax ID numbers, please be aware you must file a business schedule with your taxes every year and if you lose money for three years you put up red flags that DO trigger an audit. The government looks at business much differently, Their philosophy is " Why would you stay in business if you are not making any money". I would not do anything illegal, but I certainly intend to not become a business without trying out the product/s and thoroughly researching what marketing will work. Getting an order for 100 shirts may be all you get the entire year, this would not be lucrative for any business. I intend to start as a " Hobby Business" and will indeed pay taxes on any profits. I will not become a retail business until it becomes profitable to do so.
 

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Not sure about all states but in Ohio you can make something like $600 before you have to file it on your taxes.

I Also ran into the end of the year tax problem once. I thought I was doing really good and set aside money for taxes at the end of the year and everything. I was painting cars, motorcycles, etc. which is a service so the tax situation was different. I was working my butt of and paying a lot of extra taxes due to having a full time job as well. It put me into a different tax bracket.
 

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Not sure about all states but in Ohio you can make something like $600 before you have to file it on your taxes.

I Also ran into the end of the year tax problem once. I thought I was doing really good and set aside money for taxes at the end of the year and everything. I was painting cars, motorcycles, etc. which is a service so the tax situation was different. I was working my butt of and paying a lot of extra taxes due to having a full time job as well. It put me into a different tax bracket.
I think there's some confusion here.

There are different types of taxes being discussed.

The type that sometimes have a minimum is "Income Tax" (like from the IRS). Sometimes it's set at $600 before you have to claim it or something like that.

The type of tax I'm talking about that you CAN'T avoid is "Sales Tax". That is collecting tax from sales made in your state and paying tax back to the state that you collected.

There's no minimum "grace period" on "sales tax" that I know of.
 
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I thought the original question was whether or not a liscense was required to try out a business on an experimental basis. Of course everyone must pay sales tax business or individual alike if they sell anything retail, that includes flea market vendors, crafters etc. However not eveyone must have a business liscense, again ex: flea market vendors, carfters yard sales etc.
I do hope that helps to clear any confusion I may have contributed to in this thread.
 

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I think there's some confusion here.

There are different types of taxes being discussed.

The type that sometimes have a minimum is "Income Tax" (like from the IRS). Sometimes it's set at $600 before you have to claim it or something like that.

The type of tax I'm talking about that you CAN'T avoid is "Sales Tax". That is collecting tax from sales made in your state and paying tax back to the state that you collected.

There's no minimum "grace period" on "sales tax" that I know of.

Sorry about that. I wasn't thinking about sales tax.
Last time I sold to someone out of state I was not required to charge sales tax. Only if you were in Ohio selling to someone in Ohio you had to charge the tax. May have changed but I still see a lot of places that say "residents of (insert state name here) add xx% for taxes.
 

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Rodney had a lot of good points in his posts.

Just to clarify: the reason a lot of 'wholesalers' won't sell to you without you providing a sales tax ID is:

1) They aren't a retail outlet and don't want to compete with their retail customers by selling a handful of shirts here and there.

2) They are required to CHARGE you sales tax if you don't prove you are a retailer and will be collecting whatever sales tax is required on your finished product.

If you are in the 'planning stages' of your business, I'd say having to pay a little more for your 'sample' shirts is just the way it's going to be. Once you are an 'official business,' it will qualify you for better pricing.

And, in states where clothing isn't taxed, it's easy to fill out the form ... it asks for 'gross sales' then 'sales excluded from tax' -- you pay the difference. If you have little or no tax liability, some states will put you on a semi-annual or annual filing.
 

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I just wanted to add, as this seems to come up, Alpha Shirt will give case pricing when the order is phoned in. They can't do it for online orders as they adjust it manually. I've gotten orders out of Philly for $30 that I needed same day, and they've given case pricing on the items. Just have to ask for it over the phone. Good luck everyone! Happy t-shirting! :)
 

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The general rule (emphasize general) is that sales tax must be collected on all sales delivered within "your" state. There are exceptions. It doesn't matter how small the sale. Obviously if you live in a state that doesn't collect sales tax on clothing you are not required to collect it. In my state...maybe yours, maybe not...30 days after you've made a sale sales tax must be reported and paid. Failing to do so is a violation of state law. It doesn't matter if your a hobby business or not. Always, ALWAYS, check with the laws in your state. My brother was hit with a $5,000.00 fine and penalty for failing to pay sales tax on belt buckles he was engraving and selling at gun shows. He was nabbed at a local gun show...not a pleasant day for him. Couple state treasury workers came up to him and demanded he provide his retail sales tax id...he looked confused. They copied down his driver's license and he received a summons in the mail 3 days later. Better safe than sorry.
 

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Legal is the way to ngo. All you need to do is register your company and make it official. You do not need to file taxes until you start earning a certain amount of money after your exenses - which can take some time. It may be worth talking to an accountant before making a decision about not registering your company. All you need to do is fill out some paperwork and you can register fro a sole proprietership or the like and you can do it by yourself. Really, not a big deal at all!
 

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Again, don't mix Federal or State income taxes with Sales Tax...there is no minimum on sales tax in most, if not all states. Income tax is a different matter. Find an accountant in your state...it's money well spent.
 

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Ohio is the same way. If you sell, you need that vendor's license and you have to collect and pay sales tax on every item that you sell.
 

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This is a very informative and well discussed thread. And I found the info about blank-wholesalers very helpful.

On the topic as to going through the process of getting all the necessary paperworks done, I personally think I would need a tutor for that whole thingy. And I sure hope that tutor would accompany if ever I need to go to local offices to apply, because the words they use int he forms are all too overwhelming.
 

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Ordering blanks online: just want a confirmation, will shipping costs be lesser if quantity is bigger? I wanted to order just 1, but the shipping is $8.50 while the shirt is just $1.72, is it worth it? or should I pick out more?
 

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Ordering blanks online: just want a confirmation, will shipping costs be lesser if quantity is bigger? I wanted to order just 1, but the shipping is $8.50 while the shirt is just $1.72, is it worth it? or should I pick out more?
Shipping costs will increase as your quantities increase. Not proportionally though.

1 t-shirt via UPS costs around $6 or more to ship. Once they add in packaging and labor, that's why the $8 ish total comes in.

50 t-shirts costs probably about $18 to ship (just estimating).

So it's not like you'll be paying $8 per shirt for shipping, that's just the lowest cost shipping option available for one t-shirt through the shipping carrier they are using.
 

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shirtsupplier.com i believe carries a wide range of hanes, gildan, and others without having to be registered....i believe.

i haven't bought from them yet but at checkout all business related fields are optional
 

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Ordering blanks online: just want a confirmation, will shipping costs be lesser if quantity is bigger? I wanted to order just 1, but the shipping is $8.50 while the shirt is just $1.72, is it worth it? or should I pick out more?
Shipping becomes free over a certain dollar amount from several companies- Broder/Alpha and Sanmar.

Shipping is determined by weight and size but $8-10 is about the minimum. Some companies will sell you samples at reduced prices so it pays to call and ask.
 
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