Questions about being a MA seller on Etsy...

[CapeCodStitchery]

Hello everyone! I don't have any items for sale yet (not for lack of inventory waiting for me to do so) but I've got some nagging questions that I really need some help with.

I have a full time job and will be selling (hopefully) relatively small amounts (probably enough to support my crafty habit) once I get the nerve to list. However, since I'm not a MA native, I'm very confused about the small business requirements for this state. Do I need to get a tax number and register a company name? Do I file quarterly sales taxes? Is there a simple and law abiding way to sell on Etsy without worrying myself to death over it?

I tried looking at the MA small business web site but it made as much sense as the legal disclaimer on my credit card statement. Please help, any assistance would be graciously appreciated. I live on Cape and now that the tourists are gone, mostly, I can get to places I need to in order to get my Etsy project going.

Thanks!!!

[CapeCodPaperCuts]

Don't worry about any of that stuff yet. If you start selling massive amounts then you can look into it but right now you are more of a "tag sale" :) Doing all that stuff will end up costing you. I'm not sure but I think that is more for the brick and mortar aspect of it - had one of those and there's alot that goes into a "small business" that just wouldn't apply here. Keep your records and if there ever is a problem they are good about helping you remedy it but there won't be :) I'm on Cape too - moved here from Jersey in 1989.

[CapeCodStitchery]

Thank you so much for responding, Nancy!! I guess you made me think of more questions to ask. Tag Sale is a garage sale, right? What type of records should be kept? I know that when I, if ever, make a sale, that information should be retained but do I need to keep receipts for materials? I do most of my shopping at Michaels and AC Moore in Hyannis but have quite the collection now; there's no way I have those receipts anymore. I transferred to Otis about 8 years ago from Michigan and fell in love with the Cape once I got over the culture shock from the Mid West to New England. My family says that I'm starting to talk funny, especially since I married a Cape Native 4 years ago...lol!! Thanks again, I really appreciate the help!

[CapeCodPaperCuts]

Yeah tag sale is garage sale :) When I had my store the rule of thumb was always that someone has to pay the sales tax so if you bought your stuff at retail then the sales tax was paid. I just keep my sales receipts because I buy everything at retail too. Our kids (born here) tell us we talk funny :) Good Luck! Now get listing! :)

[CapeCodStitchery]

Thanks again, Nancy! I'll do my best to put something in my shop!!

[Former_Member]

I'm glad I'm not the only one who failed at finding the right information on the MA gov website. If someone does want to get a business license where do you go for that? Your local town? Which comes first, tax id or business license?

Hopefully I will be brave enough to start posting some things soon but I've also been worrying about this aspect.

[CapeCodStitchery]

I tried going to the local township hall but I'm having trouble conveying that I don't want a "big" small business; no additional employees, no work area any bigger than my craft room in my house, no secondary facility that needs a state inspection for certification purposes...this is a tough state to live in when you're the little guy.

[Former_Member]

It turns out I have a friend who knows about these things and she says for a tiny, sole proprietor, no employees business like this you can use your SSN instead of getting an EIN and the rest is "very easy." I will be talking to her after my brother's wedding (so much to do!) in a week and a half. If you are still having trouble finding info then I'll be happy to share what I find out!

[CapeCodStitchery]

Thank you so much, Sarah!! Basically, I'd like to know at what dollar amount do you claim taxes? Will it be for sales taxes or income taxes? Since I'm not planning on getting very big at this (who has the time...), does it need to be done on a quarterly basis? Once those questions are answered...can I claim the taxes on my own or do I need to have my accountant do it for me? As you can see...the MA small business sight just doesn't give that much info.

Again, thank you so much for getting this info for me!!

[Former_Member]

You can double check the Etsy fine print, but I think they keep most records for you and let you know in a message if it looks like you'll be making enough money to fill out other tax forms.

[Former_Member]

I am also in Massachusetts and yes you need a "sales and use tax registration" to sell your items online and at craft shows you need to have this card with you. If you are approached at a show and do not have your registration card you will be asked to pack up and leave and will be fined. I have seen this happen to vendors who do not have the proper paper work. You can apply for this on the Massachusetts Department of Revenue. It is free.

All Etsy and Paypal accounts who have 200+ transactions and/or $10,000+ in sales will receive a 1099 form from Etsy and/or Paypal. This information is also sent to the IRS. If you are selling your handmade goods no matter how much or how little you still need to claim all of your income.

You do not need to file quarterly but if you owe state taxes you will be fined a small penalty of $20. That is what I do, it is well worth the $20 fee to not have to deal with taxes 4 times a year.

You should save ALL your receipts for materials, shipping fees and anything else to do with your business...don't forget to claim mileage when going to purchase materials, post office trips, deliveries and such. Keep receipts for meals with clients and craft shows.

If you have a room in your home used only as a studio for your work part of your utilities can be a write off and don't forget your internet bill is also a tax write off.

I do my own taxes using TurboTax (keep your receipt it is a tax write off on the following year) and it is fairly easy.

Good Luck!