Business License For Cheaper Leather?

[klint fluitt]

ok I been makin saddles and tack in spare time day workin and riding colts the rest of the time. I was told you can get leather cheaper with a tax Id number or business license. Is this true. I know I'll have to pay unkle sam but I fugured yal woukd know. If so do you talk to the courthouse or where.

[TwinOaks]

You'd go to the local courthouse to file a business. It's cheaper up front because you're buying wholesale, but you still have to pay for it on the back end. Most companies also offer a slightly better base price as well. However, there is a lot more to having a business license than just getting things cheaper. There's a good bit of paper work that HAS to be done, usually on a quarterly basis. If you're after some savings without the hassle, look into some of the memberships offered by several of the suppliers. For example: Tandy offers memberships in two classes, each with an upfront cost, and different amounts of discount. If you're buying large amounts, the membership pays for itself pretty quickly. When I first got into this hobby, I bought a Tandy membership as part of my first order. The discount on the order was more than the membership, so it basically "paid" for itself the first time it was used. Over the course of the next year, I took advantage of the membership and got a LOT more for the money than I would have otherwise.

**Just using Tandy as an example, I don't have any affiliations with them**

[Russ]

In Ohio you get a vendor's license and tax ID number at the county courthouse.

Tandy Leather gives a break when you are licensed, plus then a break when you become a re-seller or something or other, I don't remember the terms. If you want to buy from Weaver Leather, you need an account with a tax ID. Other vendors will have different terms. When Siegel of Calif was open, they didn't care if I was buying with or without a tax ID, the price was the same except for volume orders.

ok I been makin saddles and tack in spare time day workin and riding colts the rest of the time. I was told you can get leather cheaper with a tax Id number or business license. Is this true. I know I'll have to pay unkle sam but I fugured yal woukd know. If so do you talk to the courthouse or where.

[BIGGUNDOCTOR]

Having a resale license allows you to buy without paying sales tax. The tax is paid by the customer on the completed item, or whoever buys the materials from you. Now if you use some the items yourself , you are supposed to pay a use tax on that. It isn't as easy as getting a license, and not paying taxes since Uncle Sam will get you one way or another.

[Willbilly]

I just got my LLC up and running, and while yes techinacly I get a discount because I do not have to pay sales tax when I purchase materials, it is just easier to pay for a membership to tandy or like company. The paperwork needed for a Business is crazy, and not something I recomend just to get cheaper goods, plus the taxes are a pain already, and i have only had the business for a few months.

[artificer13]

I'm with Willbilly and the others. If you're JUST looking for a little cheaper pricing you can always buy memberships/purchasing plans etc. Even the most basic form of business (Sole Proprietorship) will take a fair bit of paperwork in most states.

Unless you're buying tons of material or selling lots of product, you're better off doing the buyer's programs.

[gringobill]

It's already been said, but.....it's one of those "pay me now or pay me later," situations. I've always felt it was opening a can of worms that I haven't wanted to get into yet. As others have said, if you get a tax id/business license you're going to be expected to keep good records and at some point the state and feds are going to expect you to pay sales taxes on everything you've sold. You're going to have to start keeping a set of books. I expect in many of our cases, we are buying enough tools, etc that we can show a loss and not show a profit, so there are no taxes due. However there is a limit on how many years the IRS will allow you to show a loss on a business, it may be 7 years.

It's just not as simple as, setting up a business and getting a tax id and getting to buy things at a discount (most of the time the discount equals the sales tax you'd pay on your supplies,) eventually you're probably going to have to pay the piper.

I have more dealings with taxing entities than I want already so until such time as I get big enough to be forced to jump through all the hoops I'll continue to fly below the radar.

[Billy P]

Springfield Leather Co. also has a wholesale membership that you can buy. My first year was something like $30, and just $15 a year renewal since then. I just renewed and made an order and it well over paid for itself, so the rest of my orders until next August are a savings bonus. They also sell Tandy and a lot of other peoples stuff, just let them know what catalog you want it from. I can't use a tax ID or a business because of being on disability, and I am not able to do as much as I used to do anyway. I think saving is saving so their plan works for me. Billy P

[Johnny B]

Tandy leather has a discount club. I am, I think, am an Elite member. It pays for itself every time I walk into that store.

[Randy Cornelius]

I know some places like Weaver Leather and Ohio Travel bag requires a sales Tax number to buy from them.

[jcatleather]

Most Tandy Leather stores will give a distributor account without a business license, but you have to pay the sales tax. Make nice to the manager...

[KAYAK45]

Something is missing in this discussion!

Sales taxes are due, in most states, on the sale of items!

YOU DO NOT GET A SALES TAX NUMBER TO SAVE MONEY ON PURCHASES, YOU DO IT TO COMPLY WITH THE LAWS OF CIVILIZATION.

Several companies do not want to do business with criminals. Does that make them BAD?

IF you do not collect and pay taxes you are DEFRAUDING THE SYSTEM.

Get over it and join the country. Why are you exempt?

Just a thought.

Kevin

[Dmitri]

The way I am reading it is that no one is trying to defrauding the gov't out of anything. It seems like the question is very simply put to where and how someone can save a few dollars on thier bottom end. I am sure this is to pass the savings on to the customer and perhalps be a small bit cheaper than the next guy to get sales.

As more of a forum lurker than a poster, the individuals on this site appear to be a well read and intelligent group who know that running a business requires the paperwork and associated gov't requirments(taxes,licencing ect.)

So I don't thing anyone is trying to be EXEMPT.....everyone just like a deal once in a while.

Just my thoughts on it for what it is worth.

[wildrose]

To get a tax id was pretty simple in PA, I went to the local tax office and filled out a piece of paper as I recall (though it's been a while). Now I'm in VA and I do file sales tax reports monthly (it was twice a year in PA) which in one regard is annoying, but in another it keeps the amount low rather than a large chunk. That said, here is what I do:

When I'm at a craft fair or event, I incorporate the cost of tax into the item price. Thus, if an item is 50.00, I don't have to deal with keeping coins in my cash box.

And when I'm shopping at Tandy (which I do pretty regularly), not only do I not pay them tax, I also get the business discount price without having to join a club and pay extra for that. I do, however, pay the use tax i.e. when I buy a side of leather and a bunch of dyes.

That's me.

[horsewreck]

Klint; You are in Texas, just go to your local bank and get a DBA (doing buisness as) form, fill it out and file it as directed on the form. Then apply wifh the Texas State Comptroller's office (1-800-252-5555) for a sales tax permit. Their is no cost to you and that makes you a business in the state of texas. When you make a sale to a non ag use customer you simply include sales tax on his bill, then you are required to file and foward that sales tax monthly, quarterly, or in the case of a low volume shop annualy. It is easy as pie. I hope this is of some help to you....... Jeff

Edited October 9, 2011 by horsewreck

[Rohn]

I have a sales tax # from OH and I file monthly. It really is no problem since I keep records of all my leather spending and selling anyway. I charge tax and put it aside so I have it when I make out my monthly report. It takes about ten minutes to send it to the Government each month, and I get dealers price on leather from Tandy and am able to deal with Weaver and others with no problem. I really is no big deal.

Rohn

[RidersChoiceSaddleCo]

Getting a tax ID is not a big deal. Generally you won't get a break on leather costs unless you buy more or pay a membership. Some information that I haven't seen listed is that states also have a manufacturers ID number. It works like a tax ID and makes you exempt but you don't have to keep up with sales tax. This is only good if you are selling through wholesalers. For instance if you mass produced belts to sell at truck stops. It would be the truck stops duty to pay the sales tax. Just a thought.