self employed--business license, sales tax, etc

The friendliest place on the web for anyone with an RV or an interest in RVing!
If you have answers, please help by responding to the unanswered posts.

DianaRose

Member
Joined
Jan 3, 2011
Posts
24
I run my own 0-employee LLC which I'll be taking fulltime on the road this year.  I have a sales tax permit, and the City of Clearwater required me to have what they call a "business tax receipt" making it legal to do business in Clearwater. 

When this expires in the Fall, do I need to renew it, since I won't be located in Clearwater any longer?  We are keeping Florida as our state of residence, but won't have an address.  If not Clearwater, do I need some kind of license from anyone else and if so, who?

My husband is a musician who will be performing and selling CDs and merchandise on the road.  He's just setting up his business, sales tax, etc.  Do we need to get such a license for him?  I know we would, if we were going to be located in Clearwater.

I asked at the City of Clearwater, and they insisted that I have to have a physical base somewhere, and that's where I should get legal.  But I don't have to have a physical location, do I?

Also, we pay Florida sales tax for the businesses.  Is that appropriate to continue since we are maintaining FL as our state of residence?  What about the 1% that goes to the county?

Thanks, I don't know who to ask that isn't fulltiming because it's so WEIRD!
 
The physical address that the Clearwater person was referring to is more appropriately referred to as a domicile.  I suspect that you might get by without a domicile but it would be difficult.  A domicile provides an address that establishes an address used for filing tax returns, obtaining drivers license, state license tags, insurance, voting registration, etc. 

If you do not own realestate, and are traveling around the country this becomes an advantage in that you may choose the state in which to establish a domicile.  Some states are more friendly than others in terms of cost of insurance, income tax rates, property tax rates, etc. 

I'm guessing that you also need to receive mail.  In states frequently selected by RVers as their domicile, there are mail forwarding services.  The mail forwarding service can be used as your domicile address too.  Some mail forwarding services will take care of titling your vehicles and obtaining license tags for you. 

Check out our library, there is related info there.

As for collecting sales tax and acquiring a license to do business; that will vary from state to state and must be considered on a state to state basis.
 
So, if we are using a physical address in Clearwater, we need to get the Clearwater business tax receipt even if the business is not happening in Clearwater?  And the sales tax is applicable to our address also, regardless of our location?

We are going to remain Florida residents (domicile) and were thinking of using a family member's address for a residence. 

Thanks for the quick reply!
 
DianaRose said:
So, if we are using a physical address in Clearwater, we need to get the Clearwater business tax receipt even if the business is not happening in Clearwater?  And the sales tax is applicable to our address also, regardless of our location?

Where and how are you making your sales? If you ship your orders to customers out of state, you do not have to collect or report state (and local) sales taxes, as long as you have no presence in the state to which you ship. The sales taxes become the responsibility of the buyer (many states have use tax requirements). If you deliver or ship to Clearwater or FL locations and you maintain your FL domicile, you will have to continue collecting and filing FL/Clearwater sales taxes and licenses.
 
Okay, makes sense.  I do internet sales and only charge tax on Florida sales.  Just wasn't sure that was still appropriate if my business wasn't in Florida.  But I guess it just depends on where the address of my business is, and that would be Florida.  My husband's CDs we will be selling in person all over the country, so while his business address will be in Florida, I wonder if we'll have to apply to collect sales tax everywhere we go?  What do people do who sell at shows around the country do?
 
Please be careful of this and fully understand the laws of the state of Florida. If it is like so many other states, only if you sell to a Florida resident or ship to a Florida address will you be liable for Florida State Sales Tax. (Providing your resident place of business is in Florida.)

If you were to sell your CDs, etc at a show or festival in another state, I guarantee that state tax representitives will be there to collect their fair share for their state. You would not declare this as a sale in Florida because you only collected tax for the state your in. I realize it gets complicated and that's why the state tax agencies monitor these events because many of the vendors, artists, and entertainers are from out of state. And of course you don't want to double up and pay in both states and the consumer definately would not want to be charged sales tax for both states.
 
DianaRose said:
I run my own 0-employee LLC which I'll be taking fulltime on the road this year.  I have a sales tax permit, and the City of Clearwater required me to have what they call a "business tax receipt" making it legal to do business in Clearwater. 

I know a few vendors that do just what you want to do.  Two of them also sell a few antiques, musical instruments, and other small used items.  They seem to be doing all right.  At least their rigs are in good shape, well maintained, and they have the spare cash to buy overpriced food at the markets.  Some venues may have odd rules about playing music.

I wonder if your LLC might make a difference as opposed to a sole proprietorship.  I'm not one to recommend hiring lawyers but you might need a lawyer for that question.  The one who set up your corporation should know.  I've stayed away from incorporating for that reason.  I was looking for a Tennessee mail forwarder and came across "registered agents".  The one I spoke to said theirs or a similar service was required if a corporation operates within TN for any length of time without a physical address.  But she was trying to sell something too.

You are required by law to collect sales tax in most states.  Depending on the venues, you might never see a tax man.  At some others, the operators require a tax ID number or driver's license number to rent a "spot".  There are also venues that are checked regularly.  My Pennsylvania Transient Vendor Certificate states "...This certificate must be prominently displayed.  Failure to do so will subject tangible personal property (automobile, truck, or other means of transportation used to carry said property) to confiscation by the Department."  I never heard of that happening but I also don't want to be the first one. 

By the way, if you sell "knock offs" several states, at least, WILL take everything.  I've been at markets where knock off vendors have been arrested- they were selling purses and items with team logos.  I very, very seldom sell any logo'ed products.  If I do they have the little holograph dohickey.

I haven't sold through the mail for almost 10 years so I can't make any suggestions there.  Ohio got cranky about collecting tax at different rates in different counties.

Some states, like Florida, require you to switch your tags to their state after a period of time.  I understand Ohio also requires this but doesn't really enforce it unless somebody complains.  If you will sell frequently in Florida keeping your vehicle registration there would be a good idea.

A good way to test the waters in a particular state is to set up on the border, for instance Youngstown and Rogers Ohio attract vendors from Pennsylvania and West Virginia.  Talk to the vendors that sell in the adjoining states.  Vendors in northern Florida will know exactly HOW laws are enforced in Georgia and Alabama.  Some states have made compliance for transient vendors, so difficult the laws are generally ignored and seldom enforced (and no, I'm not sharing that information).  If you are not set up to sell, flea market vendors at least really won't answer your questions accurately.  Sometimes it takes a few weeks for them to start trusting you.

fleamarketeer


 
I am going to recommend you get professional advice, even though it is expensive. Word of mouth from people who play fast and loose with sales tax collections is a good way to learn an even more expensive lesson.

Sales tax laws are complicated, vary by locality as well as state, and an audit is a nightmare. The penalties can be staggering and "I didn't know" never works as an excuse. Been there, done that.

States are spending an increasing amount of time trying to close the gap internet sales tax avoidance because of the revenue shortfalls. And once you are tagged, they are relentless.

If you are deriving any income of any significance from your work, or expect to, you need to be informed and make sound business choices.

And yes, running a small business is not a small task.
 
Back
Top Bottom