Want to Sell Online? Beware of Your Tax Liabilities!
The Internet has revolutionized many standards in today’s society. Years ago, people got of rid of items they no longer wanted or had no room to store by having a yard sale or garage sale. These days, thanks to the Internet, many people sell their things on-line through sites like eBay.
If you have been thinking about turning your success with sites like this into your own business enterprise, don’t forget to consider your tax liabilities. When people open a business on-line, taxes are something that is all too often overlooked until it’s too late. You may have done all your research and marketing, your due diligence as to setting up your business structure, and prepared well, in general, for your on-line enterprise. But did you even give one thought to the taxes you might incur from selling product on the Internet? Probably not.
The reason for this is the impression that the Internet somehow is a tax-free zone. Well, it is not and you can be liable for sales related taxes depending on the states and/or countries with whom your Internet business will trade.
There are many relevant points to consider. Probably chief among these points is location. That would be the location of the seller (you), and the buyer (your customer). Dependent on your location in relationship to one another, your business could be liable for sales tax or use taxes to the state or for even to certain countries.
There are federal tax implications to consider, such as whether or not you will need a federal tax identification number to run your business. Are you subject to social security and unemployment taxes? What sorts of tax considerations are there if you employ people in aspects of your Internet business?
What about foreign countries? Will you incur any foreign tax liabilities since you will obviously be doing an international business with people from all around the globe?
These are the sorts of questions you need to consider as an important aspect of developing the plan for your Internet business. These questions are too often overlooked when the start up is an Internet on-line business.
You can see how important it is to know the answers to these questions before starting up your Internet selling business. For this reason, it is suggested you consult a business expert with a niche in Internet start up. You want to be certain that you understand all regulations regarding your specific Internet business and taxes, in order to be certain that your business is making due compliance with all applicable tax rules and regulations.
Plan to set up a lucrative business on Internet? Well you have to consider tax aspect of it. A number of states have started living taxes on Internet activities.