Startup Diaries: Collecting Sales Tax

[Startup Diaries is a new original series of articles from Yahoo! Small Business Advisor that chronicles the day-to-day and week-to-week struggles of a variety of startup and new small businesses.]

On Jan. 1, 2013, Kimberly Moses and her husband, Justin, started Game Day Sportswear, LLC, which specializes in youth and adult sports uniforms and team apparel. The couple came up with the idea for their own team-sports apparel company after dealing with numerous large uniform companies' middlemen and lack of personalized customer service.

After finishing our research and finally deciding to file as an LLC versus a DBA or a corporation, we thought our initial paperwork for creating our business was complete. But, we forgot one important aspect -- just a minor detail, really! -- of retail sales … the sales tax.

Annual Retail Tax Certificates

To sell our merchandise retail, we were required to register for an Annual Resale Tax Certificate through the Florida Department of Revenue, in order to collect tax on any merchandise sold. This task we were able to take care of online, and in doing so we discovered that the Annual Retail Tax Certificate allows us to not only collect sales tax from customers, but to purchase our inventory wholesale and tax free.

In filing for our Annual Retail Tax Certificate, we also learned that the amount of tax we charge is directly related to the county and state where our customers are located, not from where we are located. Thankfully, we were provided with a chart listing accurate sales tax rates for various counties and states.

Filing Sales and Use Tax

Another area of question for us was the frequency of filing our sales and use tax. We were unsure if we would have to file monthly, quarterly, or semi-annually. According to the Florida Department of Revenue, between July 1 and June 30 if more than $1,000 in sales tax is collected, then we file monthly. If we collect $501 to $1,000, we file quarterly; if we collect $100 to $500, we file semi-annually.

As we venture forth with this new chapter in our lives, each day brings the opportunity to learn something new and overcome new challenges. Since we have only just begun, the question now becomes, "How do we generate more clientele?" We will continue to take it one day at a time -- striving for success, because after all, at Game Day Sportswear, "Every day is game day!"

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