To sell wholesale on Amazon, you need a legal business entity. Most sellers register as an LLC or corporation, which helps protect personal assets.
You may also need a sellerโs permit to collect sales tax. Since each state has different regulations, check your stateโs requirements to determine if you need this permit.
Additionally, you might need a resale certificate, which allows you to buy items from suppliers without paying tax. Many states require this for wholesale purchases.
Sales tax is often collected by Amazon, but in some states, you may need to handle it yourself. Understanding this can help you avoid compliance issues.
Income tax must also be paid on your earnings. The IRS requires you to report income and expenses, and keeping good records can simplify this process.
Some states have their own income tax requirements, separate from federal taxes. Check your stateโs rules to see if this applies to you.
If youโre buying products from other countries, import duties may apply. These are taxes on products entering the U.S., so itโs essential to budget for these costs.
Maintaining good records is crucial. Track all purchases, sales, and expenses to stay organized and simplify tax preparation.
Hiring a tax professional can be beneficial. They can assist with deductions and tax compliance, saving you time and helping you avoid costly mistakes.
Finally, tax laws can change, especially for online businesses. Staying informed ensures your business remains compliant and protected.