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R. Klein, EA
R. Klein, EA, Enrolled Agent
Category: Tax
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Experience:  Over 20 Years experience
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I have a c corporation owned by a family. They have a second

Resolved Question:

I have a c corporation owned by a family. They have a second business that is more of a hobby that they want to turn a profit. They will be selling items (like t-shirts with their logo and things like that) I am trying to figure out what forms we need to be able to charge sales tax for city state ect, and it that should be under the C corporation name or the second small business' name.
Submitted: 2 years ago.
Category: Tax
Expert:  R. Klein, EA replied 2 years ago.

Randalltax :

Whether the t-shirt business is part of the corporation is strictly a business decision. As long as the corporation is setup to do "any legal activity" (which most are), then the owners decide what business they are in. Of course, if money for expenses is coming out of the corporation to fund the t-shirt business, then it likely is part of the corporation's income and expenses.


 

Randalltax :

A C Corporation can file a fictitious name certificate with the county (d/b/a) so that it can use the name of the t-shirt company if it wishes. (Smith Corporation d/b/a Jones T-Shirts Co.)


 

Customer:

but what would we need to file to be able to charge taxes?

Randalltax :

In AZ, you need to apply for AZ Transaction Privelege Tax. http://www.azdor.gov/business/transactionprivilegetax.aspx


 

Customer:

ok and would we use the side business name for that, or would be put it under the parent company's name?

Randalltax :

Unlike most states, AZ taxes the vendor, not the consumer. However, businesses get to pass the tax to the consumer. Weird


 

Randalltax :

You have to register as the owner company. So, the answer depends on whether the T-Short ccompany is a d/b/a for the parent corporation or if it is separate.


 

Customer:

AZ is just kinda odd like that,,,, its the heat makes us all a little crazy :)

Randalltax :

You have to decide A before you can answer question B


 

Customer:

ok so if they decide to keep it seprate then register under the smaller companys name it they use it as a DBA then they would use the parent compaines name?

Customer:

i think i got it thankyou

R. Klein, EA, Enrolled Agent
Category: Tax
Satisfied Customers: 2880
Experience: Over 20 Years experience
R. Klein, EA and 3 other Tax Specialists are ready to help you

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