The Journey

I figured with all of the trouble that I've been having with this sales tax nonsense, I might as well chronicle it. Who knows, maybe someone from Etsy stumbles onto this page with the same problems and questions and has a better time of it because of my little knowledge crusade.

Each state has different sales tax laws while some, like Delaware, don't have any at all. From what I can gather for the state of North Carolina you are only responsible for reporting sales made from within NC and not outside states. Whichever county the purchaser is making the sale from is the sales tax you have to collect. Apparently there is a chart the shows NC counties and their rate of sales tax to make that easier. Not to mention that Etsy has a section where you can tax by county and putting in the zip code...etc. So once you set that on your account as your preference it will automatically take where the person is from in NC when they go to make a purchase and set that counties specific sales tax so you don't have to worry about it. You just have to go in a set it up to be like that.

Because we are business owners at Etsy we need a business license. I live in Fayetteville, North Carolina so I need to go downtown to obtain it, which is $50 per year. I'm not super sure about getting a tax id number (EIN) so when I go down there tomorrow I will ask and see what they say. I'm not sure if registering for a business license already gets you one or if that's a separate issue.

When it comes to taxes you need to know how to classify your business (LLC, sole proprietorship, partnership...etc.) That determines your rate of tax and the deductions you can take. I'm not sure which is better, registering as a DBA (doing business as) or an LLC. Another stone wall I have come up against.

I've also found out that getting a CPA to look over my stuff and to keep my books and do my quarterly taxes (which will need to be done since you're a business owner now) is something like $150 a month. I know there are those that off free consultation but after that, especially being new and not making much money, it's a little intimidating to keep one with the threat of not having your business take off right away while still paying someone a bunch of money that you don't have.

Here are some helpful NC related websites (there are equivalents for other states):

www.dor.state.nc.us/electronic/registration/index.html 
www.blnc.gov/start-your-business/business-forms 
biztaxlaw.about.com/od/businesstaxes/f/onlinesalestax.htm 

This whole process has been overwhelming and more than intimidating. I thought I was just going to get online and have it all be magical and easy. Someone forgot to tell me that the government needs to take more of my money. Shame shame.