Q: Does an online apparel brand, w booth at local fairs need to register as a retail merchant? Or just add sales tax?
It will be sourced through print on demand, so I will not personally be fulfilling the orders, except at the occasional booth set up at a local fair/farmers market. The sales goal is greater than the threshold for collecting tax. It is a sole proprietorship. A trademark application will be submitted within 1 year. I don’t plan to hire employees.
A:
Kudos for thinking about sales tax.
The business (whether a sole proprietor, LLC, corporation, however the business is organized and operated) needs to obtain a Registered Retail Merchant's Certificate to collect and remit sales tax. You will first need a tax ID for the business. If the business is a corporation or a limited liability company with more than one member or a single-member LLC that will be taxed as a Subchapter S corporation, you'll need an Employer Identification Number or EIN that you can obtain through https://www.irs.gov/businesses/small-businesses-self-employed/apply-for-an-employer-identification-number-ein-online. (Make sure you are on the irs.gov website and not one of the commercial websites that charges a fee to obtain an EIN for you.) Then you file a Business Tax Application (BT-with the Indiana Department of Revenue
A:
Kudos for thinking about sales tax.
The business needs to obtain a Registered Retail Merchant's Certificate to collect and remit sales tax.
To obtain a Merchant's Certificate, file a Business Tax Application, Form BT-1, online with the Indiana Department of Revenue. Start at https://www.in.gov/dor/business-tax/register-a-new-business/online-business-tax-application-bt-1-checklist/, which has a list of the pieces of information you'll need. There should be a link on that page to direct you to the application itself. When the application is complete, you'll receive a Merchant's Certificate with the number you're looking for.
Before you file Form BT-1, you will likely need an Employer Identification Number for the business, which you can obtain by starting at https://www.irs.gov/businesses/small-businesses-self-employed/apply-for-an-employer-identification-number-ein-online and following the links to Form SS-4 Online. (Make sure you're on the irs.gov website and not on one of the commercial sites that charges you a fee to obtain the EIN for you. It will cost you nothing to obtain an EIN through the IRS website.) Technically, if the business is a sole proprietorship or a single-member LLC taxed as a disregarded entity, you may not need an EIN -- for income tax purposes, you'll use the owner's Social Security Number, but it's likely you'll eventually need an EIN, for example, if the business ever has employees, so I usually advise clients to go ahead and get one from the beginning.
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