California anyone?

[_g_]

Hi,

 

I searched a lot here in the forums and also checked out http://www.boe.ca.gov but I couldn't find the proper answers to my questions. So I decided to ask the people who have experienced this and have found the answers. It'll be great if you guys can share the info.

 

I am in California, a permanent resident. I want to start an online store for selling music (CDs) from a different country. I would buy the CDs here from the distributors present here. The CDs are made for sale anywhere in the world.

 

So now I am wondering if I should get a business name or just do it on my name? The last I checked was that the business lic. was about $300 (I might be wrong). So what difference would it make if I do it as a business or as a sole owner?

 

Does anybody know how much does it cost for getting the sales tax # from the state?

 

By now I know that I have to charge sales tax from the customers in California and the tax has to be my county's tax. But I also want to ship the products to Canada and other parts of the world too. Do I have to charge Sales Tax from them too? Like for people in EU they have something VAT? And how much would be the customs cost, if any, for cost of the orders(product only) generally ranging somewhere 10 -20 bucks?

 

It would be great if someone can answer all or any question. Looking forward to the replies.

[Guest]

Hi,

 

I searched a lot here in the forums and also checked out http://www.boe.ca.gov but I couldn't find the proper answers to my questions. So I decided to ask the people who have experienced this and have found the answers. It'll be great if you guys can share the info.

 

I am in California, a permanent resident. I want to start an online store for selling music (CDs) from a different country. I would buy the CDs here from the distributors present here. The CDs are made for sale anywhere in the world.

 

So now I am wondering if I should get a business name or just do it on my name? The last I checked was that the business lic. was about $300 (I might be wrong). So what difference would it make if I do it as a business or as a sole owner?

 

Does anybody know how much does it cost for getting the sales tax # from the state?

 

By now I know that I have to charge sales tax from the customers in California and the tax has to be my county's tax. But I also want to ship the products to Canada and other parts of the world too. Do I have to charge Sales Tax from them too? Like for people in EU they have something VAT? And how much would be the customs cost, if any, for cost of the orders(product only) generally ranging somewhere 10 -20 bucks?

 

It would be great if someone can answer all or any question. Looking forward to the replies.

<{POST_SNAPBACK}>

 

 

I don't recall it being that expensive. I know on renewal it's a percentage of what the previous years sales. They send you a form and plop in some sales information to determine the renewal cost.

 

I would think that any legitimate distributor will require you to have a reseller permit as to not have to charge you tax.

 

You are correct that you will have to charge tax if the ship address is within CA. You don't need to charge anybody else tax.

 

as far as canada is concerned, make sure you look into duties and figure out how you are going to ship and deal with customs ahead of time. might not be cost effective to do business with canada depending on your product offering.

 

i am not an expert in any of this. just run a store out of california... :thumbsup: I would suggest contacting your local county goverment office for specifics.

 

good luck.

[Guest]

Your business license cost is determined by the Jurisdiction and the business you are in. For instance, where I live in Southern California, it costs me a flat $68.00 per year for my business license.

 

For your resell license just go to your closest BOE office and get one, these are free and get you access to wholesalers, distributors and tax-free inventory purchases at most local stores.

 

You can probably get more information from an accountant local to you. Just call up a few for a free consultation and ask some questions.

[www.RentAwebmaster.biz]

I'm in Bakersfield, Kern County. We drove to Sacto and registered a not for profit for about $40 or less. Then came back home and registered in the County Records office a division of our nonprofit for about the same or less. The County had us publish a ficticious (?) business name ad in a paper for about a month for another small $50 fee (+/-).

[wejee]

The reseller's permit for buying stuff wholesale is free. My business licence in San Rafael was about $75- they usually calculate it on your expected gross sales. The ficticous name statement wasn't a big deal- it all cost me less than $200 total.

 

You only have to charge sales tax to California residents, so figure a way to keep them seperate to calculate the tax (I'm one to talk, tax time is coming and I don't have it figured out myself!) Fortunately, most of your sales should be out of state, so you won't have to worry about it much!

[Guest]

You only have to charge sales tax to California residents, so figure a way to keep them seperate to calculate the tax (I'm one to talk, tax time is coming and I don't have it figured out myself!) Fortunately, most of your sales should be out of state, so you won't have to worry about it much!

 

You still need to report how much of your sales are out of state and you need to have some instate sales or the BOE will cancel your Resell Permit for lack of use.

[_g_]

Thanks a lot everybody! I did read the replies last night but couldn't post a reply.

 

Motivated, today I visited the local BOE office and got my reseller's permit :). It didn't even cost me a buck.

 

The papers have a confusing chart where it has bunch of numbers and it says the state's sales tax is 8.25% but I know that some counties charge more than 8.25%. For instance Alameda county charges 8.75% (I believe thats the max.)

 

So what % do you guys charge? Since there isn't anyway u can charge the customer tax applicable to his county in osC, do I just charge 8.75% as mentioned by lot of people, that its is better to charge more tax than charging it less and paying the rest by yourself?

 

Thanks again!!

[bglkk]

The papers have a confusing chart where it has bunch of numbers and it says the state's sales tax is 8.25% but I know that some counties charge more than 8.25%. For instance Alameda county charges 8.75% (I believe thats the max.)

 

So what % do you guys charge? Since there isn't anyway u can charge the customer tax applicable to his county in osC, do I just charge 8.75% as mentioned by lot of people, that its is better to charge more tax than charging it less and paying the rest by yourself?

 

Thanks again!!

<{POST_SNAPBACK}>

 

My info says that the statewide rate is 7.25%, with additional district rate(s). We charge 8.25%, with our nexus (I love slipping that in) in LA County. But I'm actually in Ohio, so I could be wrong. :-"

 

"California has many special taxing jurisdictions (districts), which are funded by a transactions (sales) and use tax rate that is added to the standard statewide rate of 7.25%, effective January 1, 2002. The tax rates for these districts range from 0.125% to 0.50% per district. In some areas, there is more than one district tax in effect. In others, there is no district tax in effect."

 

http://www.boe.ca.gov/sutax/pam71.htm

[Guest]

Yeah, you charge your county's sales tax rate.

[_g_]

Thanks bglkk and Hierophant. I will charge my county's tax (8.25%).

 

huh!? @ 2hot4u1231

[mxer210]

No I asked the CA BOE(I live in San Jose, CA.) and she said you have ot charge California customers THEIR counties tax rate. Unless you want to calculate every customers tax rate, just charge the highest and do 8.75%.

[Guest]

You only have to collect the tax rate of the counties that you have a presence in, even if that presence is temporary.

 

4. What tax rate do I use?

 

The sales and use tax rate varies statewide. The statewide sales and use tax rate is currently 7.25 percent. However, the rate is higher in locations where voters have approved additional "district" taxes. Most of these districts encompass an entire countywide area; however, some districts are limited to a single city. District taxes may be used for special services such as transportation or libraries, or they may be used to support general services.

 

Examples

 

    * In San Bernardino County the tax rate is 7.75 percent. This rate reflects the 7.25 percent statewide base rate plus 0.50 percent for the San Bernardino County Transportation Authority. The rate applies countywide.

    * In the City of Placerville, located in El Dorado County, the tax rate is 7.50 percent. This rate reflects the 7.25 percent statewide base plus 0.25 percent for a public safety district. The 7.50 percent rate applies only within the city limits of Placerville. The tax rate in areas of El Dorado County outside the City of Placerville is 7.25 percent.

 

More than three-fourths of all businesses in the state are located in or do business in special tax districts.

 

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5. How do I know if I am required to report district taxes?

 

As a seller, you must collect, report, and pay district sales tax (called a transaction tax) or use tax on your taxable sales and leases if you:

 

    * Have a business location or are engaged in business within the district;

    * Lease, store, or consume tangible personal property in the district; or

    * Sell or lease vehicles, undocumented vessels, or aircraft that will be registered in the district.

 

You are engaged in business in a district if you are a retailer who:

 

    * Maintains, occupies, or uses any type of office, sales room, warehouse, or other place of business in the district, even if it is used temporarily, indirectly, or through an agent; or

    * Has any kind of representative operating in the district for the purpose of making sales, making deliveries, or taking orders; or

    * Receives rental income from leases or tangible personal property located in the district.

 

There are some differences between the rules that apply to the payment of taxes in districts and the payment of sales and use taxes in general. You should refer to Publication 44PDF, Tax Tips for District Taxes, for more information.

 

If you are not subject to a district tax, you should report tax at the statewide rate, which is currently 7.25 percent.

 

http://www.boe.ca.gov/sutax/faqpurch.htm#four

 

This is also iterated in the legal documentation given to you when you obtain a resell permit.

[Guest]

No I asked the CA BOE(I live in San Jose, CA.) and she said you have ot charge California customers THEIR counties tax rate. Unless you want to calculate every customers tax rate, just charge the highest and do 8.75%.

<{POST_SNAPBACK}>

 

No... you collect the tax rate of the location that appears on your permits & licenses.