Question about ebay reseller person

[Deleted]

Hi,

I have a question maybe someone can help me out with. My wife currently (over the last 2 months) trying to see if she can make a decent amount of money buying and reselling items on ebay. Some of the items she sells are used and some are new. She has had great success.

Before she starts buying a bunch more stuff, she has not been collecting sales taxes on her ebay account. She has kept receipts for all of the items she has been purchasing, and has paid sales tax, but has not charged it.

The question is: should she go about setting up her business now, and getting the resell license? Or should she wait and test it for another month or so to make sure this is something she wants to do. She has sold about 5000 worth of items in the last few months. Also, what should she do for any items that she has already sold and not charges sales tax to? Can she just pay that herself? Any information about reselling on ebay would be very beneficial. I appreciate your feedback. Long Long time lurker.

[mwcpa]

sales tax is a scary area that you and your wife should really sit down with a tax pro to discuss...

sales and use tax is one of those taxes that can get you into a lot of trouble... it's known as a fiduciary tax... that means it is not your money, never was, never will be... states take it seriously when it is not remitted properly...

I suggest that your wife register asap, charge sales tax to people who live in the same state as you (or where she operates from), and look into any amnesty programs that state offer from time to time for sins of the past (in NY there is a great program that I have helped a few who lost their way get back on the right path)

[Deleted]

Thank you for the replies. Are there any well known Tax Professionals nationwide that anybody could recommend for a consultation that covers this? I am in the Cleveland, Ohio area. I appreciate the feedback.

[mwcpa]

ask friends and family...
this is not something the tax prep/rapid refund "chain store" jobs...
you need a qualified local tax professional, not a national one... who helps you today... ask them...

[rangerj]

Ohio has both a sales tax and a use tax. You should get a retail sales license and state license and/or sales tax number. Goods purchased for resale should not be taxed with state sales tax. You should be able to present your state sales tax number, or "exemption certificate", to businesses that you purchase goods for resale from and not be taxed (most states that I know of). When you sell in Ohio, or any state where you have "nexus" (a business location), you are required to collect sales tax and pay that tax money over to the state. You get to keep a small amount for doing that as long as you are timely (if I remember Ohio correctly). Any goods you bring into Ohio that are for personal use, or use in the business, but not for resale, are subject to the use tax that just so happens to be the same rate as the sales tax. Go figure!!!. As advised above see a tax and business professional such as a CPA or an Enrolled Agent in your area.

[TheOtherMe]

My opinion is that if she has sold about $5,000 of items in the last few months, she is in business and needs to get set up as such.