Legal And Tax Strategies For The Online Retailer Protecting Yourself And Your Assets

Legal And Tax Strategies For the​ Online Retailer - Protecting Yourself And Your Assets
When you​ open an​ eBiz,​ it’s important you​ remember that it​ really is​ a​ business and approach it​ as​ you​ would any other business .​
Don’t just jump in​ and start selling .​
Consider all the​ legal issues—your responsibilities and the​ risks you’re assuming—in order to​ safe-guard your investments.
Do I​ Need to​ Charge Taxes Online?
If you’re running an​ internet company,​ it’s your responsibility to​ keep current on​ tax laws that affect you​ .​
As a​ retailer,​ you’re obligated to​ know the​ laws regarding both the​ collection and payment of​ state sales taxes.
According to​ CPA Jim Reed,​ of​ Teton Tax (,​ the​ collection of​ sales tax for items sold over the​ internet is​ only required if​ the​ business has a​ physical presence in​ that state .​
In other words,​ if​ you​ run a​ home-based candle business in​ Oregon and you​ sell a​ box of​ votive candle holders to​ a​ customer in​ Portland,​ you’ll need to​ charge them sales tax.
If,​ however,​ you​ sell a​ candelabrum to​ a​ customer in​ Texas,​ where your business has no physical presence,​ you​ don’t need to​ charge sales tax,​ so you’re able to​ provide your customer with a​ lower price .​
This can add up to​ substantial savings on​ high-end purchases and give your eBiz a​ competitive advantage over out-of-state brick-and-mortar stores.
In addition to​ charging sales tax,​ you’re also responsible for passing that money on​ to​ the​ government .​
In most states,​ you’ll need to​ fill out a​ tax return,​ usually once a​ month .​
Says Reed,​ You’re required to​ fill that out,​ whether you​ have sales or​ not,​ once you​ obtain a​ sales tax license .​
Each state has its own sales tax form to​ be completed,​ signed,​ and filed,​ and the​ tax remitted,​ based on​ what taxes have been collected during that period.
What’s the​ Best Way to​ Structure My Business?
Another legal aspect of​ starting a​ eBiz is​ choosing how you​ want to​ structure it .​
The way you​ structure your business can afford you​ legal protection,​ or​ leave your assets exposed:
• Sole Proprietorships—Many e-business owners set themselves up as​ sole proprietorships to​ avoid the​ costs of​ incorporating .​
However,​ this type of​ structure leaves your personal property vulnerable in​ a​ lawsuit .​
a​ plaintiff can go after everything—your home,​ your personal bank accounts,​ your car.
• a​ Corporation or​ an​ LLC—Incorporating your business is​ like getting an​ insurance policy for your personal assets .​
If your company is​ sued,​ only what belongs to​ the​ corporation is​ at​ risk .​
The fees associated with setting up a​ corporation or​ an​ LLC are fairly minimal.
No matter how you​ decide to​ set up your business,​ it’s always a​ good idea to​ consult a​ CPA and an​ attorney to​ make sure you’re legally squared away and set up in​ the​ manner that most benefits you.
Legal And Tax Strategies For The Online Retailer Protecting Yourself And Your Assets Legal And Tax Strategies For The Online Retailer Protecting Yourself
And Your Assets Reviewed by Henda Yesti on June 24, 2018 Rating: 5

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