Teach Soap

I was just wondering if anyone knows anything about business licenses. Such as:

Should I apply for one even if I only plan on selling a few soaps to friends and relative?
If I get a business license, do I have to file a tax form every year, or only if I make a certain amount of profit?
Can I write off my soap making supplies if I get a business license?

Thanks for any help or answers you may have!

Yes, as soon as you start selling, you need a business license and a liability insurance. If you make less than 5K per year, you can apply to RLI insurance (US). As far as tax or writing off your supplies you will need to talk to your accountant as different parts of the country have different requirements. Go to your local city hall and ask about a business license and what is required.

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Irena
Closed minds are like faulty parachutes; they refuse to open.

Thanks for the info. I'll definitely do that

Just wanted to update this thread. I spoke with my county clerks office today and was told that if I don't gross over $3,000 a year I don't need a business license to sell my soap, but there is a waiver form that needs to be signed. I also would not need a state sales tax number unless I gross more than $3,000 per year (less paperwork for the state). I've been researching this to determine if I should sell my soap at the local farmer's market this summer. Even tho I don't need a business license, I still am going to check into insurance so that I am covered in case something happens.

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Linda
I know the voices in my head aren't real, but they sure have some great ideas!

Having a business license is a necessity if you're going to start selling soap as a business. Once you obtain a business license, be prepared to start paying tax on your earnings. The feds will want you to pay quarterly taxes (every 3 months) and the state will require tax collection also but each state has different criteria. The federal sales tax is the same. Also, be prepared to start charging the consumer for the tax, unless you want to absorb the tax and pay it yourself. I pay quarterly sales tax to federal and file a tax return at the end of the year for the soap business. If you forget to pay quarterly sales tax, you're fined and that stinks because the fine is usually more than you would pay in taxes. Insurance is not an option. Get some.

Supersoaper- my husband and I had a small business expediting lost baggage at our local airport and I will have to agree with you that the the tax filing was a huge pain in the patooty. We kept it for about 2 yrs and decided it wasn't worth the trouble. Now, after checking into the business license issue and the insurance expense, I've pretty much decided that I won't be selling any soap. I will probably just donate my extra batches to local charities. Family and friends can only use so much soap!

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Linda
I know the voices in my head aren't real, but they sure have some great ideas!

ljm1180, that is an interesting piece of info (about being told "if you don't gross over $3,000 a year, you don't need a business license" in your state. But then you say after that, that you won't be selling soap. Does that mean that the insurance cost was the part that was too prohibitive?

I live in a small town in Northern California and I'm getting ready to start my soap business (planning stages). I contacted the City Hall here to find out the zoning laws to see if I can make and sell soap out of my home and she is kinda giving me the run around with no solid answer. She actually told me believe it or not to keep it "hush hush" and ignore getting a license. What the h*l! I WANT to be completely legal and I don't want to be "hush, hush", I want to sell soap. Anyone have any advice? Is it legal in most places to sell out of your home??

What small town in Northern California are you in? I know that some counties require a retail license and others don't, but that's weird that you were told to keep it hush hush.

When you sell, you need to register with California State Board of Equalization, since you will need to charge tax.

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Irena
Closed minds are like faulty parachutes; they refuse to open.

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Linda
I know the voices in my head aren't real, but they sure have some great ideas!

Ahhhhh . . . I see. I totally understand too. I also work (full time) and have too many hobbies and not enough time for them all. Plus I'm divorced so I have a lot of work to do just keeping up with the house. I love reading, computers, cooking, gardening, soaping, etc. I live alone but I have a dog and a cat that I love, and they require some time and attention as well. Not enough hours in the day, hunh?

Too bad we don't live closer! I think we'd get along very well! We have a lot of the same interests, including the pets (2 dogs, 4 cats, 2 parrots and a fish tank). No, some days just don't have enough hours!

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Linda
I know the voices in my head aren't real, but they sure have some great ideas!

Yes, that IS too bad. It does sound like we have a lot in common

Do you guys need a moment.....

I'm feeling all squishy inside. Must be a guy thing.