# online business & state laws



## lyndsay_kay (Apr 2, 2009)

i'm in the process of doing all the legal stuff for my business and i have a question. right now, i'm going to be doing business strictly online (in the future i hope to have an actual storefront).

do i register my business at the state level? i will be starting as a sole proprietor with a fictitious name (trade name).

i'm assuming i do...but i just want to make sure before i spend $$ and fill out a bunch of forms!


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## Comin'OutSwingin (Oct 28, 2005)

It depends on your state. Some states allow for DBA's at the local (city/county) level, and other states require that you register at the state level.


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## THX1138 (Aug 17, 2008)

Start with your county for DBA. That is the most likely place.


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## curiousity (Feb 15, 2009)

Vermont State business information (Second one down is "Starting a Business"):

Vermont.gov - Business

Also your county and/or city may require you to get a business license.


Also, I would get a FEIN from the IRS (very easy to get) so that you can use that instead of your SSN. FEIN = Federal Employer Identification Number; it's a unique number associated with your business.

Apply for an Employer Identification Number (EIN) Online


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## lyndsay_kay (Apr 2, 2009)

thanks for the great info!


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## rhaleluk (May 26, 2009)

Also,

Depending on what states your selling to.. You might have to collect state sales tax, for instance Cali. wants everyone to collect the states sales tax, even if your business is operating from out of state.

I believe Cali. is actually the first state to try and touch internet taxes.. Honestly, I dont' agree with any of it.. No one country governs the internet therefor nobody should be able to tax it.

Anyways, make sure you look into all this too because the last thing you would hate to do is be audited because of a couple of out of state sales.


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## artchitectii (Oct 3, 2007)

I know a lot of states don't charge sales tax if you're selling to a customer out of state but you're required to pay whats called a "use tax" because you will be "using" the item in that state, which just so happens to be the exact same amount as sales tax in Ohio. Wow what a coincidence huh?


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## curiousity (Feb 15, 2009)

rhaleluk said:


> Also,
> 
> Depending on what states your selling to.. You might have to collect state sales tax, for instance Cali. wants everyone to collect the states sales tax, even if your business is operating from out of state.
> 
> ...



Ah yes, the destination-based sales tax. I live in Washington state, so I'm trying to deal with that too.

This a project that trying to make sure that sales tax is collected from internet sales. It's call the Streamlined Sales and Use Tax Agreement (SSUTA.) Quite frankly, I think they are justified in wanting to collect their sales tax, but it is a little haphazard trying to implement it from the small business owner's side...

I've been in contact with SSUTA's executive director by email about this issue. He was very nice and informative. Honestly, I was surprised when I got an email back. He recommended only worrying about the destination tax for Washington State (where I live) for now - until I know that my new business will succeed. 

SSUTA's website:
Streamlined Sales Tax Project

SSUTA's current list of states taking part in the destination-based sales tax:
Streamlined Sales Tax Project


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