I am in the process of starting a business with 3 people who will be producting clothing and designs at the current moment for a few organizations and business in buffalo, Rochester, and NYC.
We are looking to sell online mostly as we will have no physical location to start and all 3 of us will be working together out of our homes.
Is anyone currently in the online business and knows the requirements to sell online as a LLC in new York state?
Anyone have a local agency or lawyer we can contact as our advisor? We are using legalzoom.com to file the papers but we need legal advice for new York states laws on online business.
It’s my understanding that you only need to be a corporation in the state when has a physical location which is ny but just need some advice.
LLC is dirt cheap and easy… I would waste my time with it. I know he’s had a business or two. That’s not the issue. He would like to know about the selling goods aspect of a business
You’ll need a sales tax license and that’s about it in addition to a regular non-retail business. I would go with an LLC. I just formed one online for like $500 and it took me 20 minutes to fill everything out. The protection it gives you is more than worth it.
We have a few customers already who will cover our expenses to get started and more on the way. We mainly would rather front the cost and cover ourselves than 10 years down the line, get fucked over and find out we missed a step.
Ya, legalzoom.com can handle everything for upstate NY for like $500-600. We like the idea of keeping the business a separate entity and also not having double taxes for the companies and our own income with an LLC.
Do you need just sales tax license in the state you are formed in? Would people who buy stuff online from another state not have to pay any sales tax?
You are only filed in NY correct? If you have someone come from Pennsylvania to buy a car, what is different about the transaction than if they were from NY?
You only need a sales tax license for the state in which you have a physical presence, because you will be filing sales tax quarterly for that state.
You are only required to collect sales tax for purchases that are TAKEN RECEIPT OF in a state in which you have a physical presence. Person from Wyoming buys a shirt, you ship it to Wyoming. As long as you don’t have a physical presence in Wyoming, no sales tax. Person from Pennsylvania drives up to buy a shirt from you. They take possession of it in New York where you have a physical presence, you have to charge sales tax
I’ve done this for years, selling auto parts via the internet.
Here is how I want to do it, versus how I am currently doing it.
I heard that you can setup a Nevada corporation or LLC to avoid paying taxes. Nevada doesn’t charge state income tax, and you could essentially shelter your money from NY State because Nevada does not share tax information with other states.
I think another state is like this, Delaware I think.
The way I do it, is by the book in NY. You need a federal EIN, and a state tax “certificate of authority”.
You need to file quarterly taxes with NY, even if you don’t collect any tax.
You need to charge sales tax only on items shipped within NY. Everything else is not your responsibility.
Then you pay tax on your earnings at the end of the year.
Legalzoom is probably a ripoff man. You could have talked to a local accountant and gotten the whole entity filed for half that amount of money.
The guy I used is a certified CPA, we filed everything for a few hundred bucks.
Here is my non legal advise. When I was like 18 I ran this business, without any licenses or tax or anything.
I just had checks made out to me, or money sent to my paypal account. Seriously no one is the wiser, unless you deposit over 5 or 10 grand at once, then the IRS automatically gets a letter.
I went with bizfilings.com. I got 20% off with my amex card and saved $50 because I started the transaction then quit…to get me back they offered me $50 off.
Like silver mentioned you only need to pay sales tax for the states you have a business presence in. Someone in NY buys something you have to pay it…someone in PA does and you don’t.
I really shouldn’t have to tell you not to listen to this guy.
BTW - Filing for an LLC in NY is mad easy, you can do it online yourself for the filing fee of like $200 (I think). You then have 3 months to publish a notice of your intent to create an LLC several times over a few weeks in several major publications for the county. Hire an outside company so you don’t screw it up. This cost me $300 for Monroe county.
Actually I just went through that publication and it’s pretty simple. Call your county clerk and ask what 2 newspapers they require you to post it in. Call the newspapers and see what they require. The 2 newspapers here e-mailed me a template that I plugged my business name and address into. Prices depend on the newspaper but it’s going to cost me like $60 to do it here.
After that you fill out a “simple” state form and send it with the affidavits that the newspapers gave you. I think the fee there is $50.
So you used a CPA to help you with all your corporation paperwork for the filing and sales tax and then the county clerk helped you do the publication?
Do you have a CPA on retainer or did you just contract one hourly?
Damn, wish I had known that. Everything I read/researched made it out to be a really complicated process to get the newspaper to do it right/legally, so I just hired another company.
Never had a CPA…only thing I don’t do myself is payroll and all the crap involved with that. The sales tax is a pretty simple process. It’s been a few years since I’ve done it so I can’t tell you exactly what you need to do but I remember it being a fairly simple web form on a state site.
www.bizfilings.com for the LLC…simple and cheap. I talked to lawyers about doing it and the cheapest I found was $800. I walked away for under $500 online after the discount Amex gave me.
I just called the clerk to ask about the required newspapers…each county requires different newspapers (2) to publicize in. After you find out which ones call them up and see what they can do for you.
Yeah…bizfilings wanted like $1800 to do it. I almost bailed on the whole thing but after doing research and grilling bizfilings I found out they just charge that as a flat rate since some newspapers charge a lot to publicize…essentially screwing over the people in counties where it’s cheap. $300 isn’t that bad though.