Obtaining Business License.

Q: I am trying to decided if I should pursue a business license so that I can buy wholesale. I just started consigning my jewelry at a few boutiques. How costly is this to do, and how much of a hassle is it? What are the benefits? Drawbacks?

A: You need to contact your Secretary of State to determine what kind of license you may need. Depending on what state you are in, a sales tax number may cost as much as $2.00 for a filing fee. If you are going to incorporate or register your business name, that may be most costly. Once you have a sales tax number and start collecting sales tax on items you sold at retail, you will have to file a tax report and either quarterly or yearly depending on your state requirements. If you sell wholesale, the final vendor is responsible for collecting the sales tax, but you will need to collect a resale certificate from this vendor at the time you leave your items with them. Here in NY, the tax people are quite aggressive and several people have gotten into trouble selling to businesses without having the resale certificate IN HAND. They didn't allow any leeway when they investigated these small businesses and these little people really got burned. In some instances at fairs, craft sales, bazaars, etc. the tax people have come with sheriff's deputies to check for sales tax certificates. In several cases, they seized the entire booth because the dealer didn't have their certificate on display, or didn't have one. Again...it depends on what state you live in... what the various requirements may be. Check with your state tax department. They would be the ones to best advise you. I recently did this: Went over to the State Dept. of Revenue (I'm in FL), filled out the app, gave the man a $5. bill, got my number, and was outta there in less than 15 minutes. Couldn't be simpler... I have to file a quarterly return to the State, and remit any tax I collect, and just mark 0's if I do no business in that particular quarter. That's about it. While I doubt all the US states are this hassle-free, I've done this in NH and in TX in the past, and it's always been about the same. I would say to you that the benefits far outweigh the "drawbacks".

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