e-commerce question

When opening and building an e-commerce site including accepting credit card transactions, will I need the typical business license and the "State Board of Equalization" permit (state tax) as one would need to open a traditional business. I'm sure the answer is yes but I thought I'd ask anyway as this will use up about 25% of my budget. Thanks, Bill

Since the laws that govern taxation and business licenses vary so much from state to stat I think you would be best served to get advice from a tax professional from your area.

great advice harryhood. And it really doesn't matter anyway, whether you pay the tax on transaction, or quarterly, or at the end of the year when you file -- you're going to have to pay taxes no matter what.

In most states you would need to open a business. Check with a professional if you want to see if there is a way to avoid opening a business.

The simplest type of business is Sole Proprietor, which is very easy and cheap to establish. You can even file your business and personal taxes as a single tax return in some states.

A corporation or LLC (limitied liability corporation) or s-corporation are more expensive options. Also these are MUCH heavier on paperwork and more difficult to manage.

The good thing about corporations is that there is a separation between yourself and the business. If your business gets sued or is unable to pay debts and you are a Sole Proprietor they can go after your personal assets (House, Car, etc.) If it is a corporation you are protected from personal liability (again, check applicable laws).

However, with a new business you will often find yourself signing a "personal guarantee" in order to get funding or to open a merchant acccount for credit card processing. This uses your personal credit rating to obtain the loan/account but it also makes you personally liable for any bad debts owed by your company.

My advice is to open a business of some sort. Once you establish a successful business, many doors of opportunity will open. Funding for new ventures comes easier, and you will get better terms on all your agreements.

I hope this helps. I am speaking only from experience and I am not an expert of any kind.