# LLC Questions RE: tax, employees



## BSApparel (Nov 6, 2007)

Hi all, I joined a few days ago and have just been reading the forum endlessly since then. I recently filed as an LLC in NY state and I'm trying to weed through all of the legal stuff, so I have a few questions. 


1. I'm selling online at this point - do I charge sales tax only to people who's shipping address is in NY, or billing address is in NY, or everybody that buys from me, or...?

2. If I decide to sell at a trade show or concert in NY, I'm assuming everyone pays sales tax. What if I go to a trade show in another state to sell - do I charge tax there too?

3. I own the company and I have three friends that will be working as graphic artists for me. I'm paying them a percentage of the sales - how do I go about bringing them on as employees of the company, and what kind of pay/benefits am I required to give them in NY?

Thanks alot!
Aaron


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## peteVA (Nov 11, 2007)

You NEVER have to charge sales tax. You MUST pay sales tax, whether you colllect it or not, on any sales made within NY state. For online sales you should charge tax for any goods DELIVERED in NY, regardless of where ordered.

If someone in Montana, which has no sales tax, orders from you for something to be delivered to a NY address, you charge sales tax.

If someone in NY orders something to be delivered outside of NY you do not charge them sales tax.

As far as trade shows in NY, yes, you collect sales tax.

For trade shows outside NY, you may not have to, but many states and venues make arrangements with the show promoter for taxes to be collected. They may issue a temporary "peddlers license" or some such document, or the show people may have another way to handle the sales taxes. Or there may not be any. It just depends.

Can't help on the employees, other than to suggest set them up as independent contractors, and let them take care of themselves. This depneds on how they work for you. If they just provide designs on their own they would be contractors. If you have set hours for them to work at your place of business, then they would be employees. Try and keep them contractors.

And be careful hiring friends, things can turn nasty.


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## BSApparel (Nov 6, 2007)

Thanks alot for the reply, I'll look into what's involved to have them as contractors. I know it's a bad idea to go into business with friends, that's why I made them my employees and not my business partners


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## jgratil (Jul 24, 2007)

peteVA said:


> You NEVER have to charge sales tax. You MUST pay sales tax, whether you colllect it or not, on any sales made within NY state. For online sales you should charge tax for any goods DELIVERED in NY, regardless of where ordered.
> 
> If someone in Montana, which has no sales tax, orders from you for something to be delivered to a NY address, you charge sales tax.
> 
> ...


Care to share where you got this information, Pete?

I live in Arizona and need answers to the first two questions that Aaron asked. Unfortunately tax knowledge is something I lack, but that will all change when I take an accounting class next semester. Basically, all I know right now is the differences between an I-9, W-2 and 1099. Not too much.


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## peteVA (Nov 11, 2007)

Jeremy, I got that information from my brain cells. I just happen to know. I don't want to come off like a know-it-all, but the fact of the matter is that while the forms may vary and the rates may vary, the basics of sales tax are the same in all states. 

You charge tax on any sales delivered in your state. Pretty simple, really. Doesn't matter where the money comes from, it could be Iran, if the goods are delivered in the state where you do business, you collect the tax.

There are exemptions, for people buying for resale and other reasons that do vary from state to state. In my glorious Commonwealth of Virginia manufacturing plants, commercial fishermen, farmers and thanks to intense lobbying efforts airlines are exempt from sales taxes. 

In Arizona there may be other business types exempt. But for the main part you have the same basic rules as Aaron and I.

I have gained that knowledge from selling, installing and training in the use of specialized computer systems all over the US. I sold point-of-sale retail systems with the barcode scanners, etc., specialized systems to tow truck companies and GPS based vehicle tracking systems to fleet operators. In about 40 states, including Arizona.

I've spent more sleepless nights than I care to remember near where Steve crosses the tracks in Flag. Those UP trains keep shuffling cars all night long. And I'll never forget the vivid contrast between dusty Bull Head City, where it seems they oil the roads to keep the dust down and the virtual wonderland of Laughlin, NV on the other side of the river. 

In almost all of my sales and training I taught people who at the time had never even turned on a computer (this was 10-15 years ago) how to use them in general and how to do their bookkeeping on them in particular. So I got to set up computerized bookkeeping systems throughout this grand United States of America that we share. 

So, I learned from experience. Experience I'm soon going to put to work on an internet based bookkeeping system for guys like you who are just starting and want to do it right. Here's an example of what is to come, a seperate site for each client with cash, PayPal and checkbook pages - Google Docs - demo
.


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## jgratil (Jul 24, 2007)

peteVA said:


> Jeremy, I got that information from my brain cells. I just happen to know. I don't want to come off like a know-it-all, but the fact of the matter is that while the forms may vary and the rates may vary, the basics of sales tax are the same in all states.
> 
> You charge tax on any sales delivered in your state. Pretty simple, really. Doesn't matter where the money comes from, it could be Iran, if the goods are delivered in the state where you do business, you collect the tax.
> 
> ...


Ah, so in the words of Robert Kiyosaki, you "worked to learn, not worked to earn." I understand now. I wanted to know if you had read any books or anything that would be of help to me.

Maybe I should take your advice though!

p.s. Bullhead City = waste of space.


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## peteVA (Nov 11, 2007)

No doubt a waste of space. 110 degrees inside a metal shed of a building. And looking across the river at the lush green around the hotels in Laughlin. Definitely night and day. 

Weel, here's a site you can check out - Small Business FAQ


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