Epiphany: Crazy, insane! But it might just work!

pippoman

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Well, it may or not work. People have posted complaints about a couple of major reselling sites being required to collect taxes on sold items because we, the sellers, are now defined as stores. Also, 1099s are forthcoming for annual sales exceeding $600.

Before I continue, this thread has nothing to do with the “P” word, nor am I trying to start a complaint rally.

To the point: If I am considered a “store” then why not enjoy the perks? So, here is a picture of my store. Needs some tidying up, but here she be. This room is used for nothing but storage of musical gear that is potentially for sale. It takes up about 12% of my home + utilities + insurance of all items, and there’s more in the closet in this room and downstairs. If I am to be a store, I can apply for a ‘Sales & Use Tax’ registration that will exempt me from paying sales taxes on purchased items, provided I file the form with the accounting department at these hosting sites, or provide a certificate of resale to local stores where I may acquire ‘inventory’ and materials, such as strings. In Tennessee I can use a DBA status for reporting. Since I typically don’t make squat on items that I sell from my ‘store’, or lose in many cases, and my rent is considerable, I should be getting a sizable tax credit.
Okay, so what am I missing? I’ve owned 2 businesses in the past and that’s how business seems to work. Of course, some paperwork is to be expected - quarterly reports and such, but sales have been extremely slow, so there’s not much to report. Besides, we’re going to get 1099s anyway.
Again, what am I missing?
 

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Dave W

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Minnesota
You're confused. Marketplace sites having to collect sales tax doesn't make you a store. It has nothing to do with being a store. It's strictly about a Supreme Court decision allowing states to collect sales tax on sales made online.

Different states have different requirements as to how much business a site does with customers in its state. I bought an acoustic from a store in North Carolina, they do very little business with Minnesota residents so they didn't have to collect sales tax from me. But a site like Reverb does so much in sales in each state that they collect it on all sales.
 




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