# [CLOTHING LINE] I'm in Texas. What licenses do I need to sell t-shirts online?



## Augusto Amaya

Hey guys I live in Texas and I wanted to know exactly everything I will need in order fo sell online. I'm selling tshirts and hoodies ect. It's my own brand and stuff. I just want to make sure I get all the LEGAL stuff out of the way first. Start the right way. Any info would be greatly appreciated. 
Thanks Augusto.


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## gruntstyle

What specifically are your questions?


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## Augusto Amaya

Do I need any licenses?


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## gruntstyle

No. The reason why is because you have done any business yet (sold anything). Once you have sold more than $600 I would form a legal business like an LLC or sole pro.


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## ryan barker

check with your local offices, though, because tax thresholds can be different from place to place from what i understand. it doesn't make much sense not to get a vendor's license, though, as they're cheap ($25 or so where i'm at) and without that or a similar license you have no federal ID # and wholesalers won't do business with you without it. 

what's the sales tax in texas, like 8 1/4%? so, in order to avoid paying around $50 in collected sales tax ($8.25 for every $100, if the threshold was $600 the total 'savings' would be $49.50), you'd rather buy shirts and supplies at retail prices? if you, say, only paid a dollar more retail for a substrate than you would wholesale (and you don't get taxed wholesale b/c you're not the end user, whereas you do have to pay tax when you buy retail), it would only take buying fifty shirts to blow that 'savings.' if you sold a shirt for $15, you'll have exceeded that $600 threshold after only 41 shirts! you would have wasted ten extra bucks that could have gone towards the license in the first place.  

all i need here in ohio is a vendor's license. other places may have a different license or the same license by a different name, i can't attest to any of that, but, imo, it's absolutely foolish not to get one for what they cost (and the price may be different where you're at). so, daniel is absolutely right, you don't need one until you hit a certain benchmark before you have to start paying sales tax, but my thing is if you don't then you're limiting what you can get from whom and generally just limiting yourself badly for no other reason than putting off the inevitable for a little while. in other words, if you're doing your own shirts, the license pays for itself right away. if you have your shirts made for you, it still pays for itself in the long run by not having to pay tax on what you had to pay to get the shirt produced. 

then again, if you only sell twenty shirts what does it matter? lol.


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## gruntstyle

Exactly. Maybe nobody wants to give you money for your shirts, so you'll save money by not have legalities done. If people do give you money, you know the investment in legalities is worth it.


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## ryan barker

i don't think you can write any supplies or equipment or expenses such as gas off on your taxes unless you're registered as a business, either. were the threshold a lot higher, i'd say not to worry about it, but if you diligently try to sell shirts, then meeting that threshold might not take long. i mean, you'll 10-20 just to friends and family right away, right? 

since you want to be legal, i assume you want to be honest, too. you could just not report any earnings at all and pay nothing, and that'll definitely keep you under the threshold, lol. and it's not as if the government is going to send someone around to see what you're up to as you're just some random small business guy starting up. taxes are rather based on the honour system. note that i'm not advocating this, i'm just saying that's the way it is.


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## gruntstyle

There is a legal statue that has the maximum you can earn before you must report it on your taxes. It used to be $600 a few years back. I'm not sure if it changed. But most entrepreneurs don't make it, so to see if your idea will work first. I assure you are doing nothing illegal by trying to sell first.


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## Rodney

gruntstyle said:


> There is a legal statue that has the maximum you can earn before you must report it on your taxes. It used to be $600 a few years back. I'm not sure if it changed. But most entrepreneurs don't make it, so to see if your idea will work first. I assure you are doing nothing illegal by trying to sell first.


This does not apply to collecting sales taxes in your state. 

The original poster stated that they are trying to start off doing things the right way, so let's try to focus the answers on what he would need to do that instead of the "just to get by" type answers to keep it on topic


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## Rodney

Augusto Amaya said:


> Hey guys I live in Texas and I wanted to know exactly everything I will need in order fo sell online. I'm selling tshirts and hoodies ect. It's my own brand and stuff. I just want to make sure I get all the LEGAL stuff out of the way first. Start the right way. Any info would be greatly appreciated.
> Thanks Augusto.


Since you live in Texas, I'd suggest searching on the State of Texas official government website. It will tell you everything you need to start a business.

I just googled: texas business license and found the official .gov website.

From there I click Start a Business here you've got a link that will take you through what you need: Topics

Looks like they setup a whole website just to walk you through the process of starting a business  https://business.texas.gov/oog/bizq/


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## gruntstyle

Sorry, I get carried away sometimes thinking I know best. The corpses of wanna-be-entrepreneurs are littered everywhere because they don't know what they're doing and out of money before they realize what they need to do. So I'm always trying to help out based off of the success that I've had. 

Usually, from my experience, people who tell you to go file this, and spend that before you try to sell your first item, don't know what they're talking about, or aren't really in business them selves. But Rodney, I respect you because your around here all the time and help others out. So you're right and answering his question.


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## Austin300

Some of the best advice for starting a business in Texas
is gained by calling the Texas Secretary of State.
Contact the Corporations Section

Guides and Resources


They are extremely helpful and will answer all of your
questions.


You will also be required to file your info
at the county level.

You can call your county tax office for further
information and some allow the forms to be filed
online but you have to show up in person to sign
them in most areas.

ALSO,
If you are going to buy from wholesale companies they
will ask for your Texas ID numbers for tax reasons and
to give you a wholesale pricing list. There are a few
that don't require it but as time goes by they are all
requesting this information before selling to you.


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## Austin300

This page at the Texas Secretary of State will
explain the ways you can start your business.

Deciding if you are going to be a Sole Proprietor
or become an LLC is a decision you will have to
make.

This decision will also dictate your filing with the
county and or state and how your taxes will be
paid.

Selecting A Business Structure


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## Austin300

From the above posted link.




*Selecting A Business Structure*

The decision regarding business structure is a decision that a person should make, in consultation with an attorney and accountant, and taking into consideration issues regarding tax, liability, management, continuity, transferability of ownership interests, and formality of operation.

Generally, businesses are created and operated in one of the following forms:

*Sole proprietorship:* The most common and the simplest form of business is the sole proprietorship. In a sole proprietorship, a single individual engages in a business activity without necessity of formal organization. If the business is conducted under an assumed name (a name other than the surname of the individual), then an assumed name certificate (commonly referred to as a DBA) should be filed with the office of the county clerk in the county where a business premise is maintained. If no business premise is maintained, then an assumed name certificate should be filed in all counties where business is conducted under the assumed name.

*General partnership:* A general partnership is created when two or more persons associate to carry on a business for profit. A partnership generally operates in accordance with a partnership agreement, but there is no requirement that the agreement be in writing and no state-filing requirement. If the business of the partnership is conducted under an assumed name (a name that does not include the surname of all of the partners), then an assumed name certificate (commonly referred to as a DBA) should be filed with the office of the county clerk in the county where a business premise is maintained. If no business premise is maintained, then an assumed name certificate should be filed in all counties where business is conducted under the assumed name.

*Corporation:* A Texas corporation is created by filing a certificate of formation with the Texas Secretary of State. The Secretary of State provides a form that meets minimum state law requirements. Online filing of a certificate of formation is provided through SOSDirect.
A corporation is a legal person with the characteristics of limited liability, centralization of management, perpetual duration, and ease of transferability of ownership interests. The owners of a corporation are called “shareholders.” The persons who manage the business and affairs of a corporation are called “directors.” However, state corporate law does provide for shareholders to enter into shareholders’ agreements to eliminate the directors and provide for shareholder management. Choosing the best management structure for your corporation is a decision you make with the advice of an attorney. The Secretary of State cannot assist you.
An “S” corporation is not a matter of state corporate law but rather a federal tax election. A for-profit corporation elects to be taxed as an “S” corporation by filing an election with the Internal Revenue Service. Please contact the IRS or competent tax counsel regarding the decision to be taxed as an “S” corporation and the requirements for filing the election. This is not a matter with which the Secretary of State may assist.
 


*Limited Liability Company:* A Texas limited liability company is created by filing a certificate of formation with the Texas Secretary of State. The Secretary of State provides a form that meets minimum state law requirements. Online filing of a certificate of formation is provided through SOSDirect.
The limited liability company (LLC) is not a partnership or a corporation but rather is a distinct type of entity that has the powers of both a corporation and a partnership. Depending on how the LLC is structured, it may be likened to a general partnership with limited liability, or to a limited partnership where all the owners are free to participate in management and all have limited liability, or to an “S” corporation without the ownership and tax restrictions imposed by the Internal Revenue Code. Unlike the partnership, where the key element is the individual, the essence of the limited liability company is the entity, requiring for its creation more formal requirements. 1 William D. Bagley & Phillip P. Whynott, The Limited Liability Company, §2.10, (2d ed. 2d rev. James Publishing, 1995).
The owners of an LLC are called “members.” A member can be an individual, partnership, corporation, trust, and any other legal or commercial entity. Generally, the liability of the members is limited to their investment and they may enjoy the pass-through tax treatment afforded to partners in a partnership. As a result of federal tax classification rules, an LLC can achieve both structural flexibility and favorable tax treatment. Nevertheless, persons contemplating forming an LLC are well advised to consult competent legal counsel.
A limited liability company can be managed by managers or by its members. The management structure must be stated in the certificate of formation. Management structure is a determination that is made by the LLC and its members. The Secretary of State cannot give advice about management structure.
 


*Limited Partnership:* A Texas limited partnership is a partnership formed by two or more persons and having one or more general partners and one or more limited partners. The limited partnership operates in accordance with a partnership agreement, written or oral, of the partners as to the affairs of the limited partnership and the conduct of its business. While the partnership agreement is not filed for public record, the limited partnership must file a certificate of formation with the Texas Secretary of State. The Secretary of State provides a form that meets minimum state law requirements. Online filing of the certificate of formation is provided through SOSDirect.
 

*Limited Liability Partnership:* In order to limit the liability of its general partners, a general or limited partnership may opt to register as a limited liability partnership. The Secretary of State provides a form for registration as a limited liability partnership. Online filing of the registration is provided through SOSDirect.


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## ryan barker

not sure if that comment was directed to me or not, but for the record we've been in business six years with our convenience store and trophy shop, and last year added screen printing. 

to me, it's just goofy to 'save' paying the piddly sales tax and nominal one-time license fee while shutting so many doors on yourself and paying higher prices for supplies (not to mention taxes on that stuff, more or less defeating the purpose of holding off on a license) if you're doing your own shirts. when it comes tax time, you can't write any of your expenses off unless you're a business, either. i dunno, i'm just not grasping why someone wanting to make shirts wouldn't get a license. 

i'm the same way about wanting to try to save people money just starting out, that's why i suggest getting a license in most cases. and, honestly, if someone can't afford a license i don't see why they think they can afford to start up a business, ya know? some of these guys couldn't even afford to boost a stop-and-rob because bullets cost more than 27 cents or the cash to gas up the getaway car....


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## splathead

Not sure where this $600 figure is coming from, but beware, it's incorrect.

Here are the two things you need to do first, regardless if you ever have $600 of sales or not:

1. Contact your city or county office and see if you need a business license for the location your office (or home office)is located.

2. Contact the state sales tax office and get your resellers permit. You better have it before you sell $1 worth of goods in TX or you'll face severe penalties.


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## gruntstyle

Looks guys. I'm not telling him to go do the wrong thing. I'm tell this guy that MOST entrepreneurs fail. Well, every entrepreneur fails and if you've learned from your failure and have enough money to keep going, you might eventually make it. I'm not going to argue with you guys, you're obviously all successful and know what you're talking about. That's great. Entrepreneurs need good advice. My advice is different and it's not for everyone. 
I'm just trying to have this kid avoid spending money on something that nobody might be interested in yet. My advice would be make a few shirts, go to a flee market or an event that has the culture he's trying to sell too (niche) and see if people will give him money for it. If they don't, he didn't waste extra money on it. If they do, then he might have a business and knows he can invest in it. 

Nobody gets a business license for a garage sale. What's the difference? Your advice is fine. It's just different. I'm just coming from no business back ground to building a new brand. I'm still new to this my self. You guys have more experience than I do.


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## Hegemone

You will need to track your income from your business and claim it on your income taxes if you make 400 or more. You will also need to track which portion of that was collected via credit card processing (new tax law that's starting up this year). Do the best you can to keep biz and personal finances separate. Quicken home and small biz version can help with this and integrates well with turbo tax small business just make sure you categorize your deposits and receipts. For me getting a federal employer Id and a state tax Id and local biz license with a Doing Business As (from the courthouse) all helped me keep my mind on the fact that I need to treat what I was doing like a biz or it would always just be a hobby. What's the saying... "Dress for the job you want, not the job you have." Not to mention it gets my goat when people are making money and not paying the same taxes and doing things legally. Same thing with copy rights. Just because you don't get caught doesn't mean your not hurting the those who are doing things the legal way. Play fair, play nice and keep the field level for everyone trying to make a living. 

There are small business centers all over the place that are set up by the government for exactly this reason. If you call them or stop in they will have pamphlets and instructions and even short classes on this. You will also meet a ton of people to network with who are in the same boat as you and will end up being great resources to grow and learn with (not to mention potential customers who will have a soft spot for other small biz owners).

Best of luck and keep up the energy. It may take a while but your hard work and energies will be rewarded.


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## splathead

Hey Daniel, I wasn't blasting on you per se. In a forum like this, what you say, and what you might do personally, can be two different things. You may wing it on some aspects in business because now that you've been in it a while you know the ropes. We've all done that at one time or another.

But when we're giving advice to someone just starting out, I think it's incumbent on us to provide him with the correct, legal answer. Then it's on him personally to do what he feels is best based on his circumstances.

Most people know how to not do something right; set up your online store, don't charge sales tax or register your company, and hope for the best. They come here and ask because they want to know how to do it the right way.


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## ryan barker

successful? yeah, see that porsche parked out front? it's the invisible version.... 

success is relative. to me, paying the bills is being successful at the moment. five years ago and i would be wondering what i was doing wrong. five years from now i hope to be glad i kept a business going.


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## dwntwn49

I agree with The Grunt on this one. Why not take the car for a test run before you put the "non-refundable" deposit on it. Get those puppies out in the open to make sure you can move em. Either way best of luck on your venture!!!


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## ryan barker

why? because it's not a down-payment on a porsche and once you bought $350 in supplies or services, the money you save in not paying taxes pays for the license itself. 

i think you have to look at the 'being legal' side of it, but also the potential cost savings. as small business people we have to be super conscious of such things, no? for me, i'm not arguing daniel's 'wait to see' position, rather advocating the 'save a buck when you can' stance.


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## dwntwn49

...just my 2 cents. Not saying one way is better than the other. He was looking for opinion's...that was mine


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## ryan barker

that's what we're here for, right?


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## dwntwn49

Yes we are! : )


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## Ysharifi786

You guys don't know how much I've learned from reading all you're different opinions! Really, keep it up


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