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Legal steps for online businesses- etsy/ebay

by Maddy01, Window Shopper

  • Created: November 30, 2010, 6:53 pm
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5 comments

Hi, I am planning on starting an online business selling homemade crafts. However, I want to first test the waters by selling on sites like etsy and ebay. I plan on having my etsy and ebay sites up and running by mid December and do not expect to make more than a few hundred dollars. So, my question is can I hold off on getting the business license, sales and use tax license, and reseller license until next year (January) since there is less than a month left for this year. I just want to make sure that there will be no penalty if I do not obtain the business license and such right away.

 

FYI: I am asking in reference to Marylan;s requirements.

 

My brain is fried after all the research -ve done. Here is what I have found and concluded:

 

NEED:

-        Business license

-        Sales and use tax license which I can apply for through the controlle-s website.

-        Reseller license for tax id purposes and to buy wholesale products

 

Do not need at the moment unless my company expands or I become a LLC:

-        I do not need to register my business name (dba) since it is a sole proprietorship.

-        I do not yet need an EIN since I do not have any employees

 

Please correct me if I am wrong. Again, my question is whether I can hold off on getting my business license and sales and use tax license until January. Or should I just get a sales and use tax license for now and get the business license in January?

 

 

Tags: Discuss Popular Topics, Self Employed & Home Based Business
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jagath102 | Window Shopper | 11/5/2011 - 6:40 am

For a succesful online business, you should make customers satisfaction and their trust. Many big companies give the priority to these points.
Professional Web Site: http://best-way-to-earn-money-online.net23.net

BizResearcher | Window Shopper | 12/7/2010 - 9:32 am

As Nicole suggested, you might want to initially consider the business to be a hobby while you 'test the waters.' As a hobby, when you file your taxes you can deduct expenses up to the amount of profit you make. If you decide to then get a business license, sales tax permit, etc. and become an actual business, you will be able to deduct expenses over and above your profit. If you find that you don't make enough money to form an actual business, then you haven't spent money unnecessarily.

NicoleD | Former Moderator | 12/7/2010 - 8:57 am

Maddy - The answer likely depends on whether you are operating a business, or if your Etsy/Ebay activities are considered have hobby. RS provides some helpful information to help you determine if an activity qualifies as a hobby or a for-profit endeavor. As a for profit endeavor, you will need to have the appropriate licenses. Here you will find the steps to starting a business in Maryland, including information on the licenses and permits you will need.

DiTesco | Window Shopper | 12/1/2010 - 5:45 am

I will try to reply this based on very little experience I have on US (Maryland) requirements, but rather on a business sense and experience I have on similar markets. Regardless of whether it will be on a test basis, you should always consider Customer satisfaction and protection. Here in my side of the world, we can hold off the licenses until you are certain that you will be conducting your business on a regular basis. At the most, if for some reason your sales go way over that expected, you can always 'declare' that under your personal income and pay taxes if deemed necessary. That shows sign of 'good' faith. We have what we call 'presumed' sales and if that is under a certain amount, you are actually excempt from everything. I'm sure you have seen this already, but just in case: http://www.dat.state.md.us/sdatweb/checklist.html entrepreneur.com/management/leadership/advicefromcliffennico/article76374.html Good luck! ---This post was edited to remove a commercial link. Read our discussion policies for more Community best practices.
Professional Web Site: http://www.iblogzone.com

SteersR | Creator | 12/3/2010 - 10:40 pm

Show Replied Text…
I will try to reply this based on very little experience I have on US (Maryland) requirements, but rather on a business sense and experience I have on similar markets. Regardless of whether it will be on a test basis, you should always consider Customer satisfaction and protection. Here in my side of the world, we can hold off the licenses until you are certain that you will be conducting your business on a regular basis. At the most, if for some reason your sales go way over that expected, you can always 'declare' that under your personal income and pay taxes if deemed necessary. That shows sign of 'good' faith. We have what we call 'presumed' sales and if that is under a certain amount, you are actually excempt from everything. I'm sure you have seen this already, but just in case: http://www.dat.state.md.us/sdatweb/checklist.html entrepreneur.com/management/leadership/advicefromcliffennico/article76374.html Good luck! ---This post was edited to remove a commercial link. Read our discussion policies for more Community best practices.
I agree with DiTesco. You should always think first about your customers. Prioritizing their satisfactory level on a higher basis that will make the business more successful.