This past week has been incredibly insightful and frightening at the same time. I learned about choosing a legal structure and understanding taxes. There was a lot of information to absorb as I studied various websites for hours trying to understand exactly what I need to do in order to keep my website legal and risk free.
I found this website very insightful for the state of Tennessee, which is where my location will be based out of:
On step 2, it lists each legal structure and it looks at the pros and cons of each option. This website also gave me a good foundation of the requirements for starting a business. It is a trustworthy source because it is a .gov website. I think that it is so important to get information form a reliable source because it could save you from conflict down the road.
Here is my thought process while researching these topics (for personal, future reference):
Licenses, Permits, and Special Regulations
Business licenses- My city requires that you get a business license if you gross more than $3000 a year in receipts. I don’t expect to make more than $3000 in a year.
DBA- This article recommends that I get a DBA because the name of the business (Boho and Basil) will be different than my legal name.
Permits/ Special Regulations- None that I can find
Federal income tax-
State income tax- There is no state income tax in Tennessee
State- If you sell more than $4800 a year in revenue, then you’re required to register your business for sales tax. I don’t think that I will make that much so for now I do not need to register for sales tax. However, I will still need to register my business for taxes (http://www.tn.gov/revenue/article/register-with-revenue). The cost is $15 and I am in classification 3.
National- My business is not known as a nexus and therefore does not require me to include sales tax.
Local-Same as above with the state tax. I will not be making enough to have to pay sales tax in my county.
There has been a lot of information to take in, but I feel confident in moving forward with this business and the legal structure.