Don't Annoy the State BOE and Other Tidbits on Your Responsibilities as a Start-up Business Owner

People think starting a business is difficult. It's not. It's just the rules involved with the process that make the prospects of being an entrepreneur so daunting. The fact of the matter is, if you read directions on forms carefully so that you don't annoy the people having to read your forms, you make it that much easier for yourself to start a business.

According to the California State Board of Equalization, hundreds of thousands of dollars in taxes owed went unpaid and a large portion of that money was not due to tax evasion. It was due to business owners not even realizing they had to pay those taxes. This is why it is important that you understand as a small business owner your responsibilities once your decide to commence in the world of commerce with a seller's permit. Read your forms and pay your taxes are the two greatest pieces of advice anyone could follow.

To begin with, step one in not annoying your state's Board of Equalization, is to understand whether or not you need a seller's permit. Anyone who sells or leases merchandise needs a permit. If you do not have one and are selling items, you are doing so illegally and this will eventually catch up to you. So, your best bet is go with the flow of the law and apply for one. Plus, it's free. You can apply for a regular permit or a temporary one based on whether you are setting up shop for a long-term basis or temporary one.

With that said, understand the tax laws of your state. In California, you must pay the sales taxes on the retail items you are selling. Some merchants factor in this sales tax when creating the price for their products. Others outright say to the customer that they must pay the sales tax when tallying the cost of their item. Online transactions are no different. Some online sellers seem to think that they can jump past this rule, but technically, even online retailers are required to count sales tax for online commerce.

Step three in avoiding doing something illegal without even knowing it, is to keep records of everything. This may seem difficult - especially if you are beginning to sell large quantities of merchandise. However, to be lazy is to be asking for trouble later on. Your records will back up your sales and returns so that you have proof of these things. In the state of California, you are required to keep this information for at least four years. So, bust out that Excel spreadsheet knowledge you have been siphoning away and record everything after every transaction.

Create some sort of record-keeping system so that if you can't record a transaction right after it happened, at least keep invoices that you can use to enter information into a spreadsheet later on. Maybe decide to set aside time at the end of your week to do this or hire someone part-time to help you do this.

In addition to all of this is step four: file returns. You are even required to file a return even if you have no tax to report so don't think you can skip it because you have nothing to file. This is where your handy record-keeping system will come into play. Without that, you won't survive this last step in responsibility.

Aside from this, you will also have to pay a fee to the city if you are operating out of your home. Be sure to find out if you need to do this by visiting your city's web site.

All of this seems like a lot but it's a small price to pay considering this permit allows you to buy products wholesale, which means less cost to you as a business owner. So, remember follow all of the rules and be thorough in your research of responsibilities as a licensed seller. You don't want to one day realize you own thousands in back taxes which could spell disaster for your business.