Expert: Emmett Smith Date: 7/19/2008 Subject: taxes for e-commerce
Question Hello,
I am considering starting an e-commerce site through which I'll sell
customized information products.
Can you tell me what types of taxes I'll need to collect from customers? I will
never ship anything to them; all products will be delivered electronically.
My home is in New York state.
Many thanks,
Jordan
Answer Tax laws vary from state to state. I recall something about a new law that New York recently passed concerning Internet businesses but I can't remember the details..
To be a legal business, at least, you need to go to City Hall and buy a business license. You can get a dba license for around $100. They will give you all of the information concerning sales taxes at that time as well as a permit and ID that will give you a way to file income taxes.
It is wise to do this because, if you do make a lot of money, the IRS will eventually find out. They will get the state involved and you could be shut down and/or paying taxes and penalties for a very long time. You really don't want to get on the wrong side of these guys.
It would also be wise to talk to an accountant.
To protect yourself, you should always talk to professionals in law and accounting about these types of things and not to someone you don't know online. I am neither an accountant or attorney practicing in New York.
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