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I’ve updated the new Sales Tax & Business Registration link page–we’ve now got info for the following states:
If a state isn’t there and you’d like to see links please leave a comment with the state and I’ll add it to the top of my list!
Well I’ve been meaning to do this for the past few years and now that Etsy is trying to add a sales tax feature to the site there’s been an even greater need for info on sales tax & business registration requirements.
I’ve got a hundred or so links bookmarked for sales tax issues in many states that have come up in the Etsy forums and I’m putting them up on the blog’s new:
So far I’ve got info for only 10 states up, but I’ll be adding to the page as much as possible. If your state isn’t there yet and you’d like to see some links for it, please leave a comment on this post with your state and I’ll put your state at the top of the list for states to be added.
I’ve got direct links to answers many of the frequently asked questions from the forums–links that take you to official government pages because I believe you should only get your answers from the authorities.
Any other place you get answers–be it forums or unofficial websites–may or may not have accurate answers, and that’s just not good enough if you want to be obeying the law.
This post from 2008 should still prove very useful in your quest for information–it lets you know what questions are asked repeatedly by sellers, so finding out your state’s answers to these questions should help you understand issues you may not have faced yet, so you’ll be prepared to handle them when they arise:
Here’s to everyone getting legal!
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Most online sellers are aware of the business, premier and personal types of Paypal accounts but not so many know about the micro payment account where lower per-transaction fees are charged with a higher percentage fee. (I know this type of account is available to US sellers, but I don’t know about other countries.) Micro payment accounts are useful for low dollar amount transactions because of the lower transaction fee (and less useful for larger transactions because of the higher percentage fees), but if most of your transaction totals are under $12.14 it might be a savings for you to use a micro account. (amounts are in USD) Premier: Business: Micro-Payment: Paypal tells you here that you are allowed “one Personal account and one Premier or Business account”, but they specify on the following Paypal page that you should have a micro payment account in addition to your regular business account if you want to receive both macro and micro payments. See here for more on Paypal’s Micro Account & how to get one: paypalobjects.com/IntegrationCenter/ic_micropayments.html |
Go To Great Panes, Kathryn Maloney ©2010
This post is copyrighted–you do not have permission to repost this content elsewhere but you are welcome to link to it if you’d like to share the information.
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I often see folks asking for help in the critiques section of the Etsy forums wondering how to improve their shops because they aren’t getting many hits.
The most common response is to improve your photos, and while good photos are very important, even excellent photos will mean little if your items are not showing up in search results for folks to see those photos and click through to your item. Web-based searches don’t return photos with their listings, so you really need to improve in other ways to get outside traffic in to your shop. Promoting your business is great and usually necessary for success, as is getting the internet search engines to work for you… The key: Repeated text in titles, descriptions and tags is a good thing–it gives more weight to those keywords when search engines are returning results. Improve your listings with better titles, descriptions and tags by including words and information that folks would use when looking for items like yours–basically think like a buyer… what words would they search to find it? Some important ways to describe your items in the text:
A print? original? watercolor? photograph? hat? earrings? purse? Does it have two orange cats in a field of flowers? a field of yellow and white daisies? of light pink tulips? Red hand-knit hat with a multicolor tassel? or pompon? (or pom-pom, since that’s a common alternate spelling) Yellow and light blue handmade clay pendant on a bright pink ribbon necklace? Mood/Theme–Use common descriptors for your style so folks shopping for a “feel” can find you. Colors–describe all main colors in your item. Size–in inches and centimeters. Working all those in to a flowing description & adding the appropriate bits to the title and tags can be a challenge. It helps to have some writing skills, a friend who can help or to post in the forum critique section to get ideas on how to refine your listings. Here’s an example of an item description I helped someone with in the forums: http://www.etsy.com/forums_thread.php?thread_id=6556178&page=2 That’s not the only way to work keywords in, sometimes folks tell a story in their description and/or use humor and that’s a great talent. I’m sure if you browse Etsy and see a few good description styles you’ll find one that suits you and your items, but be sure not to copy anyone’s listings. Just a list of keywords isn’t good, search engines will see that keyword spamming and it may actually hurt your search engine results. These should also help you get a feel for what tags and text will help: Guidelines & Tips: Tagging on Etsy Etsy: Meta Tags Search Engine Optimization (SEO) info straight from Google |
Go To Great Panes, Kathryn Maloney ©2010
This post is copyrighted–you do not have permission to repost this content elsewhere but you are welcome to link to it if you’d like to share the information.
Looking for your Paypal fees history or sales tax you collected through Paypal? It’s all in the history download from Paypal!
To download your history:
1. Log in to your Paypal account & hover over the History link, click the Download History link from the pop up menu.
2. On the right there’s a box with links, click Customize Download Fields.
That allows you to control the information you get & how you get it. Be sure to select shipping amount, insurance amount, sales tax and any other information you need. Click save at the bottom of that page.
3. Select Custom Date Range and put in the dates you need records from.
4. From the drop down File Types for Download menu select Tab Delimited.
5. At the bottom click the “Download History” button.
6. When download box pops up click to save the file to your computer.
7. Once you’ve saved the file, go to the folder on your computer where you saved it and change the file extension from .txt to .xls so that Excel can open it and will automatically put all the data in separate columns for you.
To change the extension right click on the file name and select rename, edit it then hit enter (on a Mac, use ctrl + click for the right click):
| From: | PP history 03 10.txt | |
| To: | PP history 03 10.xls |
8. Double-click the file name to open it. All your transaction data should be there now, separated into individual columns.
To add up a column, for example, your sales tax:
9. Click once on the first sales tax collected entry–that selects that box (I’m not sure what the column header is as we can’t use Paypal to accurately collect NY sales tax so our file doesn’t have that column).
10. Hold down the shift key and then hold down the down-arrow key to highlight the cells until you reach the end of the numbers you want to add, then click the down arrow one more time, highlighting one empty box at the end of the column. It should look like this:
11. At the top of the page click the big funny looking E in the menu bar–that will “auto-sum” the column. It will put the total in the empty box you highlighted at the bottom of the column. It should look like this:
12. All added up! In this example the total was $3.75.
This post is copyrighted–you do not have permission to repost this content elsewhere but you are welcome to link to it if you’d like to share the information.
This time of year many folks seem to have questions about where different business expenses go in your annual income taxes.
Generally, you should get your answers from people in the know–that means directly from the IRS or from an accountant or tax preparer that has experience with small business taxes.
Non-official websites and forums are not a good place to get answers. You’ll never know if the person supplying the info actually has a good understanding of the laws or if they just talk a good game if you don’t go to the source.
In that vein, I offer a few official IRS website links that I have found very helpful. (Links open in a new window or tab depending on your browser settings.)
| This one might be a little late for this year, but will help you get records in order for your 2010 income taxes:
Recordkeeping Info from the IRS For sole proprietorships (info), we report our income and expenses on the Schedule C and submit it with our 1040 to the IRS (and to the state where required). Form 1040, Schedule C This is the IRS’s instructions for the Schedule C: Instructions for the 1040 Schedule C and the following one answers some of the questions for the Schedule C that the instructions for the Schedule C seem to ignore–it has saved me from many a headache: Tax Guide for Small Business, Publication 334 |
Now don’t get overwhelmed by all this, these additional links will come in handy if you get stuck….
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Some more tough topics in detail:
Business Expenses, Publication 535 Inventories—see Publication 538 Travel, Entertainment, Gift & Car Expenses, Pub 463 How To Depreciate Property, Publication 946 Business Use of Your Home, Publication 587 |
This post is copyrighted–you do not have permission to repost this content elsewhere but you are welcome to link to it if you’d like to share the information.
Go To Great Panes, Kathryn Maloney ©2009
This isn’t the only SEO resource out there–if you search the web for info on SEO I am sure you’ll find tons of material. As with anything on the internet, some of the info will be accurate and some will just be someone’s opinion, so always consider the source of what you are reading.
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Go To Great Panes, Kathryn Maloney ©2008
Don’t know what Google Checkout is? See here: Accepting Credit Cards
2. Click the Tools tab.
3. On the left, click the Send an invoice link.
4. Fill out all the fields–I recommend checking the Send me a copy of this email box, otherwise you’ll have no record of the bill sent. Google Checkout doesn’t keep a copy in your account.
5. Click the Send invoice email button.
A yellow message will flash telling you the invoice has been sent.
I have found that I cannot use the Opera browser to send the invoices, but it works fine with Internet Explorer and Firefox.
| Visit our 2nd Etsy shop: GoToSupplies |
Go To Great Panes, Kathryn Maloney ©2008
To send a Paypal Invoice:
1. Log in to Paypal.
2. Click the Request Money tab.
3. Click the Create an Invoice link.
4. Follow the directions to send an invoice to your buyer by email.
The buyer will receive an email invoice and be able to click a link in the email to pay you.
If they prefer not to click that link, they can sign in to Paypal directly and the invoice will be waiting there for them to pay it.
During the course of business many sales tax issues can come up. Below I’ve compiled a list of questions that will get you the general information you need to know about your state’s sales tax laws.
Look for answers to the questions below on your state’s website, the paperwork they sent you when you registered or give them a call and ask one of your state’s employees. That’s how to best get facts about your state’s laws, not someone else’s interpretation or opinion.
There are links to official state websites in this post that should help you find the answers to the questions below:
Sales tax laws are different from state to state and the answers to the questions below vary widely.
There is only one law that applies to all states when it comes to collecting sales tax:
What’s a nexus? The description varies a bit, but generally if you don’t have a physical presence in a state (be it a place you ship from, a public storefront of your own, a representative who presents your items for sale in a state, do a craft show in a state), you generally don’t have a business nexus there.
The questions…:
• Must I register to collect sales tax in my state?
You may think your business is too small or that you are just a hobby seller therefore you don’t need to register to collect sales tax for your state. From what I’ve seen, that’s probably not true. Many states require you register before you start selling, regardless as to whether or not you ever make a sale to someone in your state, make a sale at all or turn a profit, or whether or not you are a business or just an individual.
• Is there an amount of sales I can make before I am required to register?
Most states with sales tax require you to register straight away–rarely there’s a “You can sell $XXX worth of goods before registering to collect sales tax” rule so you need to find out what your state’s rules are for when registration is required.
Usually it’s “Intend to make a sale? Register before you start selling whether you are a business or just an individual planning on selling to the public”.
• Can I just include sales tax in my price?
Some states allow it, some don’t, and some allow it so long as you mention tax is included. There may be other stipulations, but none I have heard of off-hand.
• Can I just pay the sales tax for my customers?
Some states allow it, some don’t. Some allow it so long as you don’t advertise it.
• Can I advertise that I pay sales tax for my customers?
Some states have specific laws about publicizing that you will pay sales tax for your customers.
• What rate do I charge?
There’s two main types of sales tax for those of us in the mail-order/internet-sales business, you need to find out which of these applies in your state:
1. Origin-based sales tax: You charge the rate of where you sell from *to buyers your state*, just like when you purchase something in-person. When the package is shipped outside areas where you are obligated to collect sales tax (usually just your home state), you don’t charge sales tax.
2. Destination-based sales tax: You charge the rate of tax at the address to which you mail the package. That’s a bit of a hassle, but if that’s what the state requires that’s what you need to do. Here in NY, I must find out what county a buyer is in before I know what rate to apply.
There’s also a hybrid–some states have both state & local taxes and they require sellers to only collect the local taxes when items are being shipped within their home region (which makes it a bit like destination based sales tax–but only for those in their own area). So if the buyer is in the seller’s city or county, they collect state+city or state+county tax from that buyer, and only state sales tax from buyers in all other parts of their state.
• Are there different rates depending on the items or services I provide?
Some states have different rates for food, clothing, shoes, services… be sure to understand how they apply to your business.
• Do I collect sales tax on shipping?
In some states all shipping is taxed, in some only shipping of taxable goods (and the shipping might be partially taxable if only part of the order is taxable), in states the cost shipping isn’t taxable but any amount over the actual cost of shipping is taxable (so if you have a handling fee it would be taxed, or if you just round up the amount that would be taxable (for example from $1.72 actual shipping rounded up to $2.00, 28 cents would be taxable).
• Must my receipts to customers specify the amount of sales tax the customer paid and/or state that sales tax is included in the purchase price?
Some states require that you show how much tax the customer has paid/you paid for the customer. If the customer doesn’t know how much tax they paid, they won’t know if “use tax” is due on their purchase. (Use tax is due on purchases that should have had tax collected by the seller but didn’t. Many (most/all?) states with sales tax also have use tax which applies to internet and mail order purchases where the seller didn’t collect sales tax, though many people think that purchases from the internet are sales tax-free.)
| Need help getting your business registered & finding answers to these questions for sellers in your state? Start here:
US: Sales Tax & Business Registration |
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