Registering My New Business. Came Accross A Little Confusion.

[silverbullet]

I hope I'm posting this in the right section. If i didn't, please free free to move my thread moderators.

I'm starting an online business (mostly Ebay for a while). I am physically in Virginia. My distributors are not and drop ship to the customers directly. I also do not hold any kind of inventory.

I have my Federal Tax ID.

Do I need to register for anything in the state? I was in the process of doing so when i came across tax questions: "Retail Sales and Use Tax," "Use Tax", and "Business Consumer's Use Tax". None of them completely applied to me from their descriptions but it would not allow me to continue without choosing one.

Retail Sales and Use Tax
As an in-state dealer, will your business be engaged in the retail sale, lease or rental of tangible goods, personal property and/or taxable services to consumers for purposes other than resale?
NO

Use Tax
As an out-of-state dealer, will your business be engaged in the retail sale, lease or rental of tangible goods, personal property and/or taxable services occurring outside of Virginia and delivered for use, consumption, or storage in Virginia?
NO

Business Consumer’s Use Tax
Will your business be engaged in the purchase, lease, or rental of tangible personal property from out-of-state vendors for use, consumption or storage in Virginia where the sales tax is not paid or charged at the time of purchase? If you checked "Yes" under "Retail Sales and Use Tax" above, select "No" for this tax.
NO




Can someone who has a little more exp. help me out here and fill me in if i even need to register with the state?

Thanks,
John

[DeenaEsq]

John,

If you are working as sole proprietorship and you're working under your own name, John Smith (or whatever your name is), you may need to register locally for a business license, but for that you'd have to check with your county clerk or your mayor's office.

Without knowing the laws of VA, when you're charging people who buy from you who are located in the state of VA, you need to charge sales tax if they're taxable goods, even if they're shipping from another state. If you have customers in VA and you've charged sales tax, you need to pay sales tax to the state...

So, yes. You need to register to collect sales tax in case any of your customers are in VA...

Hope that helps. Let me know if you have other questions.

Deena
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Any opinions are offered without knowledge of the specific law of your jurisdiction and with only the limited information provided in your post. No advice given here should be reasonably relied upon by you or any third party without consulting an attorney who is aware of all of the facts and law surrounding your situation. Any advice given here is not intended to create an attorney-client relationship in any way.

[pete]

Yes, you collect sales taxes for all sales delivered in VA, regardless of where the order comes from. Someone in China sends an order to VA, you tack on sales tax.

Your software should do this automatically.

ALSO - if your dropshipper is in a state with sales taxes, they may charge you sales tax for orders delivered within their state. You CANNOT collect these taxes, you will have to "eat them" as a cost of doing business.

Not all dropshippers do this, the larger ones do. In fact if they have distribution centers in several states, they are required by law to collect sales tax on any of your deliveries within any of those states. Again, you cannot charge your customer for this.

Well, you can, if you want to register to collect sales taxes in each state, but practically, it's not worth it. Just absorb the tax in those instances.

You need to register with the Department of Taxation for a sales tax account.

And, in most cases, you will need a business license from your city or county. A phone call to the local commissioner of the revenue can inform you of the local requirements.
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