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I am opening up my own online business. I live in Beach,

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Second opinion] Hello! I...

Second opinion] Hello! I am opening up my own online business. I live in Long Beach, California, and I will be operating a drop shipping business in which I never hold or ship inventory- my supplier will. So, I have a few questions. 1) Will I need a seller's permit? 2) would becoming an LLC. cancel my need for a seller's permit. 3) how do I know what sales tax to charge customers? 4) How do I pay sales tax and income tax on my business?

Accountant's Assistant: The Accountant will know how to help. Is there anything else important you think the Accountant should know?

I am using the shopify platform to run my business

Submitted: 4 months ago.Category: Finance
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Answered in 1 hour by:
4/1/2018
Financial Professional: ABC Accounting Group, Financial Advisor replied 4 months ago
ABC Accounting Group
ABC Accounting Group, Financial Advisor
Category: Finance
Satisfied Customers: 889
Experience: Accounting Manager
Verified

Hi. Great Questions.

  1. You will need a seller (or sales tax permit) and a business license
  2. No - you will still need to collect sales tax.
  3. Sales Tax Rates - California sales tax rate is 7.25%. This rate is made up of 6.00% state sales tax rate and an additional 1.25% local rate.
  4. For income tax, if you are self-employed/sole proprietor, you will use Schedule C. For an S-Corp - it would be an 1120S return

    You only collect sales tax from California customers.

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Financial Professional: ABC Accounting Group, Financial Advisor replied 4 months ago

For #3, there are additional district sales taxes, as well. Here is a link for total sales tax rates - http://www.boe.ca.gov/app/rates.aspx

You can file sales tax returns via http://www.cdtfa.ca.gov/taxes-and-fees/sales-use-tax-rates.htm

Let me know if this helps and if you have any questions. Thank you.

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Financial Professional: ABC Accounting Group, Financial Advisor replied 4 months ago

Let me know if this helps and if you have any questions. Thank you.

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