L06: Weekly Reflection

On By cat1600

This week brought in more questions than answers for me. I do have to follow up on last week’s post and say that there are definitely tons of pros to using a template then coding everything yourself. I was able to create my website in less than 48 hours and it is far superior to the sites I’ve coded. While that has a lot to do with the fact that I am a self-taught coder, there are still many things a template can do that I think would take me so much longer to code out, even if I was a pro.

Okay. This week’s reflections come in the form of extensive notes about licenses and taxes involved with starting a web business in the state of Washington. Hopefully this will come in handy to me or someone else in the future. Before I post my notes, though, here is my answer to my weekly question:

“How will this class help those around me to develop?” – I have had the opportunity to finish designing my site for my web business class and that means that I was able to “give” my husband his site to sell his calendars. He was very excited about the site and was motivated to take more pictures for his calendar next year.

Licenses and Taxes

NOTE: all URLs inserted as a hyperlink and underlined.

Licenses, Permits and Special Regulations

  1. Business licenses– A company’s business activity and physical location determines which licenses are needed to operate lawfully. (other determining factors: number of employees and type of business, sole or corporation.) The gov. can fine or close a business operating without the required licenses.
  • License Companies:
    • Business Licenses, LLC – Fortune 500 companies use. Uses Business License Management System (BLMS) to manage large portfolios of business licenses, permits, and tax registrations. Has business license database that covers US and territories.
    • License Shark – offers business licensing and entity formation services (registered agent and license filing as well).
    • Barlap Compliance Corporation – For regional franchise operations and multi-state corporate firms. Liquor license management.
    • LicenseLogix – Provides website badge that shows company’s full compliance to being properly licensed. Geared for: Pharmacy, construction, insurance, debt collection and energy fields.
  • License Determination Tool (LDT) – Used to determine business license requirements in the US for any type of business.
  • How to obtain a business license
    • Get city license – look at Small Business Administration (SBA) and government sites, or google your city’s name + business license. Maple Valley city fee is $10 and paid when state license is filled out and paid for. (425) 413-8800
    • Get WA state license – You can apply for a State business license ($19) and a City business license ($10): Online: Online applications are typically processed within two business days Question, contact Business Licensing Service at 1-800-451-7985. Also see File a Buiness License Application here.
      • In reporting taxes to the State, for work done in Maple Valley, Maple Valley’s location code is 1720 and must be included in the appropriate place on the State tax return.
      • For general business license questions, please contact City of Maple Valley Finance Director Shawn Hunstock at shawn.hunstock@maplevalleywa.gov or (425) 413-8800.
      • The Business License Application is the state business license form and establishes your accounts with multiple Washington state agencies, including the Departments of Revenue, Employment Security and Labor & Industries. Some local and specialtylicenses can be obtained by using the Business License Application. Follow the links above for information on local and specialty license fees.
      • What licensing and forms do I need?

 

  1. Doing Business As (DBA) or Assumed Business Names (ABN) registration.  Usually a requirement for most any size business in the U.S. – Can fill out at the same time I fill out state and city forms.
  2. Permits – None needed
  3. Special Regulations – None needed
  4. Other – None needed

Income Tax

  1. National income taxes (e.g. federal income tax–IRS) – For small businesses: here. Form 1040, Schedules C, E, F or Form 2106 needed to be filled
  2. State income taxes (state or province level taxes) – None in the state of WA
  3. Other

Sales Tax

  1. State sales taxes (state or province level sales taxes) – WA state tax for online sales is based on the shipping address of the customer. Retail tax rates ($13.99 + tax of 0.065 state & 0.021 city = $15.19 total based on Maple Valley shipping address)
  2. National sales taxes.  Some countries have national value added taxes. – Not applicable for my business
  3. Local sales taxes.  Some cities or counties have taxes on purchase amounts. – $0.021 for my product.
  4. Other – Interstate/foreign sales tax taken on products shipped outside WA.
  • A business must register and collect retail sales tax if the business has nexus with Washington. – This would apply to me.

Other Taxes

  • The seller is subject to B&O tax under theretailing classification on the gross proceeds of sales to Washington consumers.

Employee Requirements – Good to know but not needed for my business

  1. Worker’s Compensation
  2. Property taxes
  3. Labor laws

Other important links:

  • WA state business license info

 

References

Business Wizard

Nolo.com Sales Tax on the Internet

Idaho Sales Tax Info

Idaho Sales Tax FAQ

New Tax Deductions for Small Business

 

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