Before I jump into this question, just let me remind you that I am not any kind of legal or tax professional. Laws vary from state to state, and even city to city. So it is always important to talk to a professional where you live for the most complete and specific advice regarding these things. Even if I did offer direct advice for your location and tax situation specifically, it could change yearly as new beaurocrats take office and change laws under the new leadership’s agenda.
Selling on eBay in New York
But here is a question we recently received:
I would like to start selling nursing products that I sew on eBay and would like to know what legal requirements there are. Can I sell my items as a person or do i have to sell them as a business? Do i need a business license?
Generally speaking, if you just want to resell your own personal merchandise you can do it as an individual. You do not need to be a business to sell on eBay, and in fact most sellers on there that do it full time started out selling personal stuff (DVD’s, clothes, jewelry, electronics, etc.).
Now, with New York, I know they tend to have a lot of rules and regulations, which is typical when you are dealing with such a largely developed city. It is quite possible that they will have restrictions as to how much money you can make, or how many items you can sell before you are considered a business. Even if you sell only your own personal items, they may still consider that you are a business.
If you want to sell merchandise as a business, you don’t usually need anything when you register for eBay (with regards to setting up your eBay account). However, to make your business fully legal for your local state/city, you will usually have to register for a business license, and possibly other things (such as sales tax registration). You generally have to collect sales taxes for purchases within your own state.
There may be other taxes, many regulations and rules (such as zoning, various taxes, fees, licenses, etc.) that you need to consider before starting such a venture. The requirements vary, and even change yearly sometimes. So it is always best to check with local professionals such as an attorney, small business administration center, or accountant.
That may be a costly option, and some may not be willing to do that just to sell a few personal items. But this is always the best method to ensure you are being compliant with all rules and taxes. The best places to contact would be:
- Local CPAs or accountants that specialize in new business setup
- Local attorneys that specialize in new business setup
- Local municipalities such as the local courthouse or taxation department for your county/city
- State municpalities (such as the Revenue department)
The good news is that many of these facilities offer websites and general information to the public. However, as stated, things can get so complex that it is always best to talk to a local individual familiar with it. Lastly, when you get tired of all of the hoops you have to jump through, remember next time to vote republican (that’s just a joke).