# Buying equipment before having business license



## treetreego (Dec 3, 2010)

If I purchase anything (equipment, supplies, etc.) BEFORE I have my business license can I still count it as an expense for my business?

I'm looking to get started and since the new year is coming up I figured it'd be good to start at the beginning tax-wise and go from there. However, I'd like to have my equipment/supplies ready to go and get started with things asap. 

Thanks for any help/info.


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## treetreego (Dec 3, 2010)

So I'd have to sign up for the license and wait two weeks before it comes in before buying any equipment or supplies? That stinks. I was hoping to get the materials in so I could try everything out and make sure it's working properly and to test some samples to help me decide on what transfer vendors I want to use.

I'm in Mississippi.


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## treetreego (Dec 3, 2010)

I'm starting home based. I think all I need is a business license right now. I'll be a sole proprietor.


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## binki (Jul 16, 2006)

treetreego said:


> If I purchase anything (equipment, supplies, etc.) BEFORE I have my business license can I still count it as an expense for my business?


Yes you can. The biz license is the last thing to do. Don't worry about that until you start selling. But you should register your biz at some point be it a DBA, LLC, or Corp. If the city is smart they will ping you for the biz lic. if they see your registration.


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## treetreego (Dec 3, 2010)

binki said:


> Yes you can. The biz license is the last thing to do. Don't worry about that until you start selling. But you should register your biz at some point be it a DBA, LLC, or Corp. If the city is smart they will ping you for the biz lic. if they see your registration.


I planned to apply for the business license Monday. It takes about two weeks to actually receive it. I figure with the holidays that'd be sometime the first week of January. In the meantime I want to get my stuff ordered and try it all out. 

I was just concerned about being able to count everything I purchase as expenses since I wouldn't have the license until after the purchases were made.


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## binki (Jul 16, 2006)

treetreego said:


> I planned to apply for the business license Monday. It takes about two weeks to actually receive it. I figure with the holidays that'd be sometime the first week of January. In the meantime I want to get my stuff ordered and try it all out.
> 
> I was just concerned about being able to count everything I purchase as expenses since I wouldn't have the license until after the purchases were made.


You are mixing things up. You don't need a biz license to have biz expenses. You should register your company but you don't have to. It is all part of starting up. 

If you are a sole prop you normal do a dba with the county. Other forms require you to go to the State. If you are a sole prop and use your name in the biz you may not have to register at all. 

To get a sellers permit you normally have to have your biz registration, not license. The license comes from the city or county if you are not incorporated.


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## binki (Jul 16, 2006)

FatKat Printz said:


> You can not get a business license without registering with the state as a Sole Proprietor.
> 
> You can not get a EIN without your Articles of Corporation.
> 
> ...


In California it is the county that has that requirement, normally a dba just places an ad in the paper for 4 weeks.

I don't remember the others but we did it in this order:

Register with the SOS for an LLC/LLP or Corp
Get an EIN
Get a sellers permit
Get a bank account
Get an Employers number from the State (if you have employees)
Get a Biz Lic. if needed (they charge based on sales volume normally)
Register with the County if required (they tax your non real property)
Get permits for your operation from the city/county/State if required


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## splathead (Dec 4, 2005)

FatKat Printz said:


> You can not get a business license without registering with the state as a Sole Proprietor.
> 
> You can not get a EIN without your Articles of Corporation. You can't get a resale license without your Articles of Corporation and EIN.
> 
> I understand the business license is the least expensive option other than the EIN which is free. But you won't be able to get it without first registering.


These statements are incorrect. Perhaps they apply in FL, but they are not the norm. 

You don't have to register with the state as a sole proprietor if you plan on using your individual name. You only have to register if you are using a dba. Most dba filings are done through the city or county, not through the state.

You don't have to have articles of incorporation to get an EIN. You don't need to be a corporation to have an EIN.

You also don't have to be a corporation to obtain a resale license.


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## gotshirtz001 (Sep 23, 2008)

You will need to check with your local city, county and state offices for the specifics, but the process normally goes like this (or some variation):

- Establish your DBA with the county Fictitious Name ($25+)
(Note: As a condition of your County, they may require you to run an ad in the classifieds introducing you as a new local business - $50+)
- Take your DBA paperwork to your city business office and get a business license ($25+)
(Note: As a home based business, you may need to obtain a Home Occupancy Permit and get signed off by the local Fire Department) 
- Take your Business License to the State Franchise Tax Board and obtain your Resellers Permit to collect and file required Sales Tax ($FREE).

It will take you the better part of the day to get it all done but for under $100 you will be a legitimate business.


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## FatKat Printz (Dec 26, 2008)

gotshirtz001 said:


> You will need to check with your local city, county and state offices for the specifics, but the process normally goes like this (or some variation):
> 
> It will take you the better part of the day to get it all done but for under $100 you will be a legitimate business.


Check with your state and county.. everyone does things differently.

search the forums to see anyone has asked the same questions otherwise post a question for your area (MS) otherwise you will get mixed answers from people from different states.


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## selanac (Jan 8, 2007)

FatKat is correct TreeTreeGo. Each state is different. Maybe you should tell us what state your in.

In NJ, we don't need a Resell License for Clothes, but we need a State License. Anyways, I did it all online and they took care of the rest including the EIN. 

If you're all confused, check with an Attorney or an Accountant. Many of them will do it for you.


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## treetreego (Dec 3, 2010)

I said I was in Mississippi in the second post of this thread.


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## FatKat Printz (Dec 26, 2008)

treetreego said:


> I said I was in Mississippi in the second post of this thread.


I know .. but not everyone looks at every post. If you make it more specific people from Mississippi can help you.


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## treetreego (Dec 3, 2010)

Ok thanks everyone. I'll ask questions at the state tax office tomorrow. I'll contact my accountant if necessary as well.


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## ldelzer (May 3, 2010)

I'm no tax accountant or anything, but I don't think you should have any issues claiming business expenses before you file your DBA.

I would find out how to get your sales tax id from your state. In Texas, it's easy, online, and free (as I recall).

Your EIN is also very fast and is online. This is a federal id and used for employees.

My main thought is this: Don't get into a rush about ANYTHING. I'm not real sure about why you want to buy equipment right now. I'm sure you have your reasons, but I can tell you that you can loose a lot of money pretty easily in business. All of us (if we've been in business any length of time) can tell you stupid purchases we've made. You want to make very sure you are investing wisely.


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## treetreego (Dec 3, 2010)

Thanks. I'm only talking about a press, shirts and transfers mainly. The stuff I need to get started.


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## tpitman (Jul 30, 2007)

Having a business license has nothing to do with federal income tax, and claiming expenses, if that's what you're talking about. At tax time, you fill out a profit and loss form (Schedule C), and expense your junk on Form 4562 (Depreciation and Amortization), and file a Schedule SE for social security tax on profit you made from your business. The federal government doesn't give a hoot about your business license . . . they just want their money. On the other hand, you might find it's not simply a matter of breezing into your local City Hall or county office to snag a business license. If you're in a city, you probably need both. If you're working out of your house you may very well find that the zoning laws won't allow you to operate any business, or a "light manufacturing" business like screenprinting. They might also have a beef with you about what kind of chemicals you keep there, and washout sinks and the like. I ran into a lot with regards to zoning when I was looking for a commercial space. Not everything is appropriate in their eyes. My county informed me that under no circumstances was I to introduce anything not considered household into a septic system.


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## selanac (Jan 8, 2007)

You're talking about a Heat Press right, not a Screen Printing Press? You should be fine with your town for an At Home business. 

If you want to make sure you're legal every where, start at City Hall, and they'll direct you in the right path. I hope anyways. If people can use an Iron and have a Clothes Dryer then you can have a heat press. It's just a big Iron, but no water involved. It's probably safer then an Iron. 

Think about it, people introduced Water, heat and electricity to create the Iron. Those combs are never good.


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