Starting a Business in Ohio

Any hobby that is lucrative can be considered a business in the United States. If you make a profit three years out of five, legally you have to claim it on your Federal Income Taxes.
Conversely, if you don't make a profit, what you have is a hobby.

What types of businesses qualify for sole-proprietorship?
--You work alone
--You are the only head of your business
--You have employees, but you are clearly in charge
--You are the one who will file personal income tax for the business

Some examples:
--Seamstress
--Repairman
--Caterer

How do you set up a sole-proprietorship in Ohio*?

First, you need a name for your business. Your personal name will not get you any attention. The state will ignore you.
Joe Smith just won't do. Smith's Repair Shop will get you noticed.

You need to go to your county court house, located in your county seat.
You need ask questions at the Sales Tax Office:

What types of business are legal at the address you have chosen?
--Most of us start out at home. Is your house zoned for the business you want to do? Is your house just the location of the office?
--What counties will you be selling merchandise in? If you will be selling in more than one county, will you need additional licenses? Are these available locally?
--What is taxable in your county? Are services taxable? Or just goods? Most Ohio counties charge sales tax for goods, not for services.
--What is the current tax rate for the location of my business? Each county and municipality in Ohio charges a percentage, but taxes must be paid only once. The state tax office will take care of divvying up the taxes.

If you qualify, ask for an application for a Vendor's License.
Once you fill it out, you will be charged a small fee. Ask about annual fees. In Ohio, vendors only pay the initial fee.
You will be issued a license, which you must display prominently in your shop where your clients or customers will see it.

You must begin charging sales tax on applicable items immediately upon issuance of the license. Keep good records. You will need to file at least twice a year and more often if you increase your sales.
You will receive forms from the state tax office in Columbus. They are fairly easy to understand. You are required to file by phone or on the internet.
You can pay your sales tax liability through your bank or by credit card. Credit card payments, however, have a fee added to them.
If you pay your sales tax promptly at the due date, you will receive a small refund. If you do not pay timely, you will be charged a $50.00 (fifty dollar) fee.

* Other states should have similar procedures. Check your local sales tax office or chamber of commerce for local guidelines.