Business License and Sellers Permit
by cheepcheepmovies, Window Shopper
- Created: September 14, 2012, 2:13 pm
- Updated: November 7, 2013, 5:42 pm
I have done some research and found that an online business without a physical location does not have to charge sales tax in the state they reside based on the Internet Tax Freedom Act. This rule is based on a 1992 Supreme Court ruling (Quill v. North Dakota, 504 U.S. 298, (1992)) in which the justices ruled that states cannot require mail-order businesses, and by extension, online retailers to collect sales tax unless they have a physical presence in the state. The Court reasoned that forcing sellers to comply with over 7,500 tax jurisdictions was too complex for sellers to manage, and would put a strain on interstate commerce. I have a website as a store front and no physical presence and I am concerned a general business license and sellers permit is required. The business is a Sole Proprietorship with no employees. I currently live in Santa Fe, NM; so I called Accounts Receivable per the Santa Fe, NM Official Website with my questions and got very little information from them. I advised them the business was an online business with no physical location. The man I spoke to advised I do need a business license but did not know anything about a sellers permit or taxation. I do understand that at a federal level I am considered a Hobby and any profit over $400 would need to be reported on my personal income tax. The definition of a business in Santa Fe means an activity or enterprise for financial gain, benefit, advantage or livelihood. I also found: It is unlawful for any person to engage in the businesses, professions or trades defined in this section as requiring a license, within the corporate limits of the city, without first obtaining a license as prescribed by this section and pursuant to Section 3-38-1 NMSA 1978 This all leads me to believe I need a local business license, so I downloaded the registration form and looked at the fees: Business Registration: $35.00 (Businesses that have a physical location within the city limits are required to have a business registration) Business License: $10.00 (Business that are located outside of the city limits but do come in the city limits to conduct business are required to establish a City of Santa Fe Business License) I do not have a physical location within the city limits (description for the Business Registration fee) or am I located outside the city limits but come into city limits to conduct business (description for the Business License fee) I am a bit confused and looking for some answers. Do I need a business license for a sole proprietorship with an online store front with no physical presence in New Mexico? Do I need a sellers permit for a sole proprietorship with an online store front with no physical presence in New Mexico to sell retail items purchased from wholesalers? -Thanks
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