I don't understand TPT and need advice ):

[Former_Member]

I have been all over the AZDOR website and I feel like I'm just going in circles. I understand that I am supposed to collect TPT for in state sales of tangible items. I just don't know where to start. Selling items online part time is a lot different from a brick and mortar small business with employees and the site is obviously geared towards the latter. I just don't know how to get everything all set up and legal and I could really use some help. What licenses/permits do I need as an Etsy seller and how do I obtain them? When I tried to apply for the tpt permit online it had a required field for an EIN which I obviously don't have because I won't be employing anyone. I live in Glendale which is a non program city to make things even more confusing. Please help!

[Former_Member]

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[Former_Member]

Jessy,

I just stopped by the SBDC in Avondale. It was a good meeting. I read your post earlier, but didn't have a response for you.

I do now.

Officially, what I was told is that sales tax will be collected on all sales in the near future. We are apparently living in tumultuous times. With the non-program cities being chipped away at slowly but surely, it would probably help to call the City office and figure out your rates and other info.

Once the whole state goes the way of the new system (I'm not sure what that looks like since Im in Peoria), it'll be much easier to manage...

[Former_Member]

It was recommended that I get an EIN for TPT even though I don't employ anyone. I discovered that it was free, so I just received mine and applied for TPT. For me it will just mean that I do my business taxes under the EIN instead of my SSN.

[Former_Member]

Kelly,

Can you explain the logic please? Did someone having that conversation with you plan on hiring someone down the line? Or was that just for another layer of separation of your personal tax identity and your business?

[GraniteMountainGems]

I went through this when we moved here from Oregon (where I didn't have to deal with sales tax).

I did the same as Kelly, I got an EIN so my own personal SSN isn't part of it, which is great (I don't ever plan on having employees either).

Then I applied for the state TPT license. Then I applied for my local city sales tax license.

Then every month you have to file online for state sales tax (whether you collected any or not), and (by mail for me at least) your city if it has additional taxes like mine. They were supposed to have it "simplified" (pay all sales tax collected to the state each month, then the state disburses the local portions), but I understand it is delayed at this point.

This is unnecessary and only covers the state (not nationally like a trademarked or registered biz name), but I also registered my business name with Arizona. It is a good business practice to protect your biz name in the future.

Once you're set up, be sure to enable Etsy to charge sales tax for you if you haven't already.

[LunitaPaperie]

I just setup all of the official stuff for my shop recently. I went over it with my tax guy and it seems good. This is what I've done, but if you have an accountant/lawyer you should consult them about your specific business.

I got an EIN (it is free) and I filed as a sole proprietorship as I'm working solo. It was explained to me that I shouldn't form an LLC until I have 10k (for tax purposes) in net revenue a year or if I'm in a business with a lot of liability where you're likely to get sued (say food, people can claim they got sick etc). I have a very low liability risk, so that's why I picked what I did.

I also got my DBA (doing business as) since I'm not doing my business under my own name as I named my shop "La Reveuse Design", I think this was only $15 unless you want to rush it.

I got my TPT and since most of my sales are national rather than within AZ, I set it up to pay them annually. I asked my tax guy specifically about this because I was making sure I handled it right since I really don't do much business within AZ and I wouldn't collect sales tax on orders from other states.

Then I was concerned about quarterly taxes because it's something I've never done. If you owed money on your tax return the previous year, this is something you might have to do. It's not something I have to do yet as I don't make enough and my husband and I received a refund the precious year.

Also with a business and being self employed, you'll have to file a section C with your tax return, so if you're not super savvy with taxes, I'd hire someone. If you have an LLC or something, you'll have a separate return for that.

Anyhow that's what I did. I also just realized this post is pretty old so probably not helpful but I guess in case anyone comes by