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goodgalpal
member
Etsy business questions
goodgalpal
member
So if you have an etsy store, do you have to pay taxes? Do you become an official business? I have no clue how this works but am considering opening my own store. I won't advertise on here, I promise! I just need to know about the legal issues and such. Please help!
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Re: Etsy business questions
Usually you are supposed to charge your customers tax if they live in your home state, or if they live in NY regardless of wherever you are. I let it slide on my 2 NY sales - I'll just be counting it as included when tax time comes. It's not a practice you want to broadcast to your customers, but I didn't see the point of sending someone a revised invoice for less than $1 when they've already paid via paypal before I even know the sale has gone through. You CAN list your tax policies in your Shop Policies, like that all NY customers will receive a revised invoice within such & such days of purchase, & just go from there if you like.
I think a lot of people don't register their businesses properly, though I have done some research in my area and I can't really find information that tells me i have to register my online business anywhere.
You should also search the business solutions forum on etsy, this topic has come up quite a bit, and people are generally pretty helpful
My husband is a small business owner. Yes, you should get a vendors license, pay sales tax fr your state and pay federal taxes no matter how much you make. Technically, even if you have a garage sale it is supposed to be claimed as income on your taxes. Even when I travel for work and get paid extra per diem (like to eat) it's supposed to be caimed.
However, it's virtually impossible for every single business to get caught. Personally, I think being on the internet, especially with paypal and everything which could link you directly to the business, BUT I stil don't think the gov't has the time, money, or even the ability to go after every single business. And I really don't think they'd go after small small businesses when there are MUCH larger businesses out there avoiding taxes.
So regardless, its a risk. I see it as downloading free music though. You now there is a risk, but you probably do it anyway......the chance of getting caught is pretty small. That being said though, DH does pay his taxes. I'm a federal employee and I could get fired if I willing knew he didn't.
The bonus though.....all kinds of tax breaks.....put a tiny sticker on your car with your company name.....tax deduction......buy some other craft supplies because "maybe" your business will grow into that area (aka - small scale R&D).....tax deduction......need to go to Hawaii for a craft fair or workshop....business expense = tax deduction.