Hey, I was wondering what I need to apply for to get the “Tax Payer ID” that people at Fiberglass Florida and Clark foam ask me if I have it. I would like to make a VERY SMALL business for shaping boards, letting me obtain materials at wholesale prices. Do I need to go to the local courthouse and apply for a BUSINESS LICENSE or what is it called? Do I file taxes for my business as well as personal income? Please help me out! I only make about 5 boards a year, and sell only 2 or 3 a year. Thanks.
What you’re talking about is applying for a state seller’s permit. Each state issues one. In CA it’s the California State Board of Equilization. In FL they might call it something different. A seller’s permit allows you to make purchases sales tax free as long as you resell it, charge a sales tax if applicable, and file & pay those sales taxes with the state. Search around online. I found this site which could help get you started: http://www.businessnameusa.com. With regards to income taxes, if you end up creating a sole proprietorship, then yes, you will file your personal income taxes along with your business income taxes. The IRS will see no distinction between the two. Do some basic background reading about the various types of businesses and how the IRS treats them. On the other hand, if you’re only selling 2-3 boards a year it doesn’t make a whole lot of sense to apply for a seller’s permit. Technically you’re supposed to have it, but with this amount your better off buying blanks from a distributor of Clark Foam. In So Cal there’s Foam-EZ. Have anything like that in FL?
I might be able to help. From What i’ve heard and this can be wrong. You need to get your business license first, then you apply for your Tax ID number. I’m also in Florida and just landed my first surfshop account, so i’m in the middle of getting everything lined up. Let me tell you, it’s alot of running around. Also, you might want to check zoning, because if your going to do it on a small scale. Your can get into trouble glassing at your home, if they wanted to be Aholes. What i did was search google for my country for business license and came up with the Florida main page for city,county, and other license. Make sure you do it right and pay taxes. You don’t want to get catch buying supplies at whole sale prices, and not pay taxes. Shoot me a email and i’ll try to help you through it. I’m in the middle of looking for a new location and two team riders. PLus, lining everything up for a new shop being built. It’s been very crazy the last few day. Richie at Clark Foam will hook you up and so will Fiberglass Fl. once you get everything in order. I’m getting ready to start buying a few drums of resin, since the price has gone through the roof. It’s about 14.00 a gallon that way, verse 35.00 a gallon or 130.00 per 5gal. Well, good luck and get back to me if you need any help. I’ll find the link and post it later to the Florida State website.
Good luck
How big of a discount will you be getting on the clark blanks? At only three-five boards a year, is it worth the hassel of all the paperwork and the increased complication in taxes?
At this point, I think I am not going to get the Taxpayer Id and Business license. I will continue to make the 3-5 boards a year and just sell them (probably used since I want to ride every board) to close friends. I still would like to know what it takes to put together something like that incase I want to take that route. At the moment I am only 18, enrolled in my sophomore year in college, work a part time job, and surf and shape in my spare time. Thanks for all then info! -Brett.
if you want this to be VERY SMALL, as you said, then the trouble of getting all these permits really isn’t worth it. registering a business has a couple hundred dollars worth of fees attached, and having a tax license can bring on whole new problems…for example, you need to submit a tax report every month…if it’s late, there’s a big fine…if you forget a month (even if you don’t sell anything), there’s an even bigger fine. unless you’re doing at least 1 board per week, i wouldn’t bother. it could easily wind up costing you more than you could ever save.
Howzit soulstice, I can't believe a business license can cost you hundreds of dollars. In Hawaii they are really cheap, In fact I only paid a few dollars for mine and if your sale are under a certain amount you only have to pay twice a year or only once a year depending on the amount sold. When I had my wholesale business my license cost me only $3.00 but I think they've gone up a little since then. I know one board builder who only claims sales on boards paid for with a check,not cash sales.Aloha,Kokua
last time i had any direct involvement was about a year ago when a friend registered his Surf School…registering the business cost $250…i don’t know if there’s any additional fees for a wholesale/tax license…but a friend of mine who shapes up in the Florida Panhandle had zero sales one month (he was on vacation), and didn’t file a tax report showing no sales…the fine was $500. so you see what i mean about how it can be more hassle and trouble than it’s worth for someone who only expects to operate on a very small scale.
I’ll make sure to post all the information here, once i get everything lined up. The location is holding me up. We are looking at two places and one of them is inside city limits and the other isn’t. The one that is outside of town, is country. That means i won’t need the city license, just a county. I’m also heading over to my CPA. He’s going to give me a list of everything i need to do and get. I’ll make sure to post it for everyone here and also for the Florida people that might be thinking about the idea. As for the cost of Blanks at wholesale. Don’t know as of yet. Richie, told me to swing by and he’d setup a business account and go over prices and all. If it’s OK with him, I’ll post the prices. But, I don’t want to piss those guys off. If your only doing a few boards like your saying. Just stick to retail and wait till you start selling more.
Good Luck,
Steve
While this subject is rumbling around, let me toss in http://www.irs.gov/ and especially http://www.irs.gov/businesses/small/article/0,id=97860,00.html - the Employer Identification Number.
You don’t have to have any employees to use it, it opens a number of doors and discounts and it costs nothing. Online application via the latter link. Just one more thing to have in your paperwork arsenal.
hope that’s of use
doc…
Maybe I can add a little here. To obtain an EIN/TIN, you need to file a Form SS-4 with the IRS. Fairly recently, the IRS (finally!!) caught wind of a phenomenon called the “internet” and you can now complete and file the Form SS-4 online.
A word of caution - as some of the other threads have warned, be sure you really, really want to “officially” start a business. Once you form a business entity (most likely you would conclude that a limited liability company (“LLC”) or S-corporation best suited your needs) and file for a TIN, your company officially shows up on Federal radar. Once you register your business with the State of Florida, you officially show up on their radar. Granted, a small business can be a great way to jimmy down your income from other sources through business deductions assuming that you actively participate in what is a legitimate business as opposed to some sort of tax sham, but the tax benefits from a business that produces 3-5 boards per year doesn’t justify the brain damage you are going to suffer with all of the paperwork, administrative hassle, etc. of forming and maintaining the business.
On top of that, certain states (like CA) have a minimum franchise tax. In CA, our friends at the Franchise Tax Board hit LLC’s to the tune of $800 per year in taxes REGARDLESS of whether the LLC makes $1 or no $$$ in income!
Bottom line - I strongly recommend against forming your own company if you are going to produce 3-5 boards per year. Whatever discount you may get from suppliers will be more than offset by the administrative costs of forming and maintaining the company.
Most small businessmen I have helped operated as a sole proprietor for a while before deciding to form a business entity. Usually the decision to form a business entity happens after they have started a business, passed the initial stage of “will this thing sink or swim?”, and started turning enough profit to justify the administrative costs. At this stage, the notion of limiting personal liability usually enters the picture, so folks often want to form a LLC or some type of corporation to protect their personal assets in case the get sued by a customer, etc. etc.
Where are you located in Florida? I could possibly have a short cut for you, depending on where you are?
in brevard county, go up to the courthouse in viera and buy a license for a home business. $11.00. the city you are in will also want you to license with them. cost varies. with luck you will reside in the county, not in a city within the county. the folks up at the courthouse are ALWAYS very helpful with ignorant folks like myself when i deal with them. they know all the rules and with just a little respect shown, they will let you in on them.
the county has a list that lets you know what can and cannot constitute a home business. you will nod your head and indicate that you just run your website and your business office and filekeeping etc… from the home.
if you are only making 3 or 4 boards a year, this is not for you. just keep making them. if you are making 3 or 4 hundred a year…that’s another story. if you are making 50 or a hundred…hmmmmm. it may be worth the discount for wholesale.
you have to register with the state as a business also, and file your sales tax report quarterly with them.
you may also be eligible for an intangible tax from the county based on ownership of other than real property. the tax collector will send you information. and they will expect you to reply and pay.
you also have to tell the IRS at the end of the year about your income from this enterprise. usually your first year…and several more years after that are in the red. actually, with some forethought, you can be sure that your business is in the red ink. this leads to what we call a reduction in gross income which then leads to what we call an income tax refund. given that this is not your only source of income, of course.
and what everybody else said, if i left anything out.
anyhow…you pays your money and you takes your choice.