# Does Tax ID for Wholesale Mean Going Legit Right Away?



## KhaoticAngel (Aug 9, 2014)

Hi All, 

It seems, from various comments, that you get the best wholesale prices for shirts from the companies that require a Tax ID #.

My question is, once I actually GET this number, am I required to actually go get my business license and filing taxes and whatnot?

I wanted to start out as a 'hobby' for a bit, to see where my business would stand, and 'legitimize' once I had a better idea of where things would be going.

Am I stuck paying higher prices for shirts until I actually go through all the rigamarole of going legit, or can I skate by without it for a while after getting my Tax ID #?

Thanks!


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## jeron (Jul 16, 2012)

It probably depends on your state whether or not you need to be a business before you can even get a tax number. I would just do it all it's not that expensive usually. The fines are usually more expensive than if you just did it right in the first place

Thanks,
Jeron


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## KhaoticAngel (Aug 9, 2014)

Thanks for the input, Jeron 

It's not really the fees that were a concern (I know they're cheap in my state), it was simply the hassle of dealing with the gov't, AND the fact I didn't want the hassle of taxes until I knew it was going to be worth it.

I had no plans of never going legit. I just wondered if the price difference between say, a wholesaler that requires you to have a tax ID and JiffyShirts was worth going through the trouble while I'm still not sure if my 'business' will ever be more than a hobby.


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## royster13 (Aug 14, 2007)

As soon as you are making sales and generating revenue, you are a business....This is a not a decision about "hassle" it is a question about "legality"....In my province you can choose to collect sales tax if your revenue is below a certain amount, however, you must then pay sales tax on all your inputs versus claiming an exemption for resale and you are still obligated to file income tax.....


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## KhaoticAngel (Aug 9, 2014)

Royce,

Thank you for the reply. I'm aware that it's not technically 'legal' to sell anything without business license, etc. and don't intend to run an unlicensed business. However, I refuse to go through the trouble of setting up everything properly only to discover that when the time comes for all those people who have said they'd buy shirts to actually pony up the money, they've changed their minds and I sell 3 shirts total.

I guess it's probably worth the extra expense to go without the ID# until I am willing to actually set up my hobby as an official business.

Just looking for other people's thoughts on the matter is all  'Legal' or not, people do things all sorts of ways, especially when it comes to something you can do out of your living room.


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## charles95405 (Feb 1, 2007)

if you sell anything, it is not a hobby! Even if you don't buy wholesale (and yes it does make a big difference) and then sell the item, you are not playing fair as those of us who get a retail sales lic (and it cost nothing in Calif) pay our share of costs of doing business and supporting our local community by paying the sales tax collected. You do not need a tax ID...you can do business as a sole proprietor using your SSAN. I did start out from my home in 1997 BUT I had a permit from the city, a business lic and a state resale permit. This forum is a great place to get info and help on the business of T shirt sales and related items, not to help skirt the legal requirements that the rest of us adhere to..JMO


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## jeron (Jul 16, 2012)

A little advice. Do things right from the get go. You need to build good business habits, and not doing something because it's burdensome will not translate well for the longevity of your business. If you don't want to take the time to do it now, when you have little to no work, what makes you think your going to make time for it when you have 20 jobs lined up and you really have no time. 

I have all my licenses and I only do about $50 a month on average for the past year. It's a huge pain to keep everything up but I do it because that's what business owners do. I have a 9-5 normal job and do everything on nights and weekends. If I can find time anyone can. 

Thanks,
Jeron


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## Resu (Oct 16, 2011)

Contact your local SBA and they should be able to direct to you tax a preparer who can assist you with getting your paperwork/books set up correctly for tax purposes. If you're working from home you can get some good deductions as a home business owner but don't go crazy with the losses as the IRS could deem your legit business a hobby if you report multiple years of loss. I been down that road but luckily I made some cash that got them off my back.


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## binki (Jul 16, 2006)

KhaoticAngel said:


> Thanks for the input, Jeron
> 
> It's not really the fees that were a concern (I know they're cheap in my state), it was simply the hassle of dealing with the gov't, AND the fact I didn't want the hassle of taxes until I knew it was going to be worth it.
> 
> I had no plans of never going legit. I just wondered if the price difference between say, a wholesaler that requires you to have a tax ID and JiffyShirts was worth going through the trouble while I'm still not sure if my 'business' will ever be more than a hobby.


make a few shirts and see if they sell. no one will bother you over that. if you start making bank then do what you need to grow.


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## R03 (Apr 25, 2012)

Doesn't most ecommerce site require a tax ID?

Sent from my LG-E980 using T-Shirt Forums


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## jeron (Jul 16, 2012)

wholesale places do but there are retail places that will sell to anyone that claim to have "wholesale" prices... Shirtspace.com is an example.


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## StarDesigns (Aug 4, 2013)

Really what you need to be worried about is paying sales tax. You can get around the business license for a while but run a great risk if you aren't paying in sales tax. Can you get by without paying, yes, I'm sure lots of people do it. But, states don't mess around with money they are owed. If you are found out, and all it takes is one person to make one phone call, you will be shut down, you will owe major back taxes and penalties, and they can confiscate property to facilitate payment. 

Get a sales tax ID # and go for it! You don't want to be "looking over your shoulder" all the time for the tax man. 


Mitchell - Star Designs
Sent from my iPhone using TShirtForums app


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## KhaoticAngel (Aug 9, 2014)

Thank you ALL for your replies! Apparently I pushed a button for some of you, and I apologize, I wasn't trying to stir anyone up.

I assumed it was normal for people to 'test the waters' first, but at least in a few cases, I see that I was mistaken.

I appreciate the input from everyone, it was helpful... and thought-provoking. 

~A


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## charles95405 (Feb 1, 2007)

~A....no need to apologize, some of the comments may seem caustic, mine included, but are put forth from personal experiences and help newcomers stay out of trouble. There are a ton if things you will run across that you may not of thought of. As mentioned above start with a sales tax permit if your state requires sales tax. Not sure of your state the resale permit does not cost. Good luck


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## StarDesigns (Aug 4, 2013)

KhaoticAngel said:


> Thank you ALL for your replies! Apparently I pushed a button for some of you, and I apologize, I wasn't trying to stir anyone up.
> 
> I assumed it was normal for people to 'test the waters' first, but at least in a few cases, I see that I was mistaken.
> 
> ...


~A,

I hope you weren't referring to me. If so, I apologize and wasn't meaning to come across adversarially. I came straight out of college 26 years ago and started my own business (not screen printing) and I've made every mistake you can think of. I sold that first business after I began dabbling in screen printing and took on printing full time. It was the best move I ever made. I encourage you to go all in just do it right from the beginning. There will be plenty of things that will cause headaches along the way but the government need not be one of them. If you do things right you have nothing to fear. It's a good feeling to get a phone call from the dept. of Revenue informing you that they will be coming to do an audit on your sales tax and knowing you have nothing to worry about. 


Mitchell - Star Designs
Sent from my iPhone using TShirtForums app


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