About a month and a half ago (Feb 6th to be exact) I officially entered the world of confusion known as running a business.
To briefly refresh the memory of my regular readers and to enlighten my new readers, I set up a small sole proprietorship to sell my self-published novel, called "Books by George", last November.
Anyways, I called up the Dept of Revenue Service here in Connecticut to find out what forms I needed to file to pay my business income tax. Within the span of a couple of minutes of talking to the service rep, I found out to my chagrin, that I wasn't supposed to be selling my book without a sales tax permit (hence the title of the post). In Connecticut, you must charge and collect sales tax on anything that you sell, which currently stands at 6%.
Being the business neophyte that I am, I told him honestly (and truthfully) that I didn't know that I needed a sales tax permit in order to sell my books. After a fascinating five minute lecture on his part, during which he politely told me that I was a screw up, I got the information that I needed in order to register my tiny little business with the state of Connecticut and get a sales tax permit.
So when I got home, I went to the addy that he noted, www.ct.gov/register, and started the process of getting a sales tax permit. I didn't get too far as on the first page, it asked me for my Federal Employer Identification Number. Naturally, I didn't have one. So I called up the IRS at the 1-800 number I was given, and I was soon on my way of experiencing what I usually inflict on everyone else.
After spending twenty minutes on the phone with a very helpful customer service rep, I had my FEIN. I then asked her a simple question, which was "do I file my business taxes at the same time I do my personal?"
She said that she was sorry, but that she couldn't answer my question. However, she would be more than happy to transfer to someone who could. I said, "okay."
Five minutes later, I was transferred to someone else. No sooner than I got my question completely out of my mouth, I was told I that I was in the wrong dept. and that he would transfer me elsewhere. I said, "okay."
Five minutes later, I was transferred to a very nice lady in the collections dept. (no I don't know why the collections department), who after answering my question, asked me why I was transferred to her dept. I gave her the one minute version, and she was kind enough to tell me that in addition to filing a schedule C, I had to file another schedule for self-employment taxes.
Once I got done with that, back I went to the previously mentioned website and spent the next ten minutes registering my business (such as it is) and getting my sales tax permit.
Now I'm an officially registered business entity located in the state of Connecticut, ready to collect what meager sales tax I have to charge for my book. Since I already have a stated price for my book, I'll have to tweak the price so as to accurately reflect the sales tax that now must be included. In other word, a price hike.
It's never simple, is it?