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Returning Member
posted Jan 15, 2020 5:43:58 PM

Online Boutique

So I want to start an online boutique but I am curious and want to figure out all the taxes I am going to have to pay by starting that online business. I want to know both sides so being in a sole proprietor and LLC position. I live in the state of Texas. I just don’t want to start a online boutique and the taxes catch me off guard! 

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2 Replies
Level 15
Jan 16, 2020 9:44:32 AM

You should actually get a basic overview of business structures. The Texas SOS has some basic information and is a good jumping off point.

 

See https://www.sos.state.tx.us/corp/businessstructure.shtml

Level 15
Jan 17, 2020 4:22:55 PM

Yours is somewhat simple since TX does not tax personal income. However, it's not "that" simple because if you sell product to someone in another state that imposes a sales tax (and almost all states including TX do) you may (or may not) be required to charge, collect and pay the sales tax to each state you ship sold product to.

While you've taken a great first step at doing your homework "before" finding yourself in a tax hell, you 'really' should seek the knowledge you require from a professional who deals with online commerce and the associated taxes. Remember, there's more than the income tax you have to deal with. When you sell product (as opposed to services in some states) there's a sales tax imposed which has absolutely nothing what-so-ever to do with income taxes. 

Some states do impose their sales tax on online commerce, while others do not. This is why you see commercials on TV offering products (those "as seen on TV" commercials) that will sometimes state something like "not available in [name your state here]"