Teach Soap

Yes thank you so much for taking the time to write all that for me. Everyday I am understanding more and more. I am sure others will benefit from this post too. Ok, I'm off to get my DBA. I don't think my name has been taken (from my own investigating anyway so far) so we will see. Do you think I should get a biz license there to while I am at it or not really right now? I think I might see what all I need and where to go for it.

Have a great day everyone.
Kim

If you are thinking of selling anytime soon, I would get a business license.

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

Thanks Soapbuddy. I called to get it and they said I just need one from my cities Town Hall and is only $10. Does that sound right? I told them I would be selling in other counties and states (mostly family and friends at this point) and that said that is fine. Seems really cheap to me.

Also, I bought some soaps online from Etsy and did not get charged tax. Is that normal too or do you think they just rounded it up in the price already? Thanks.

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

I only had to get a Business License. I guess that is it anyway. No one mentioned a Resale license. What is a Resale License for? I guess I don't know that one. I still need to get my tax id. Doing that today since it is fast online.

My resale license is used to purchase my supplies from my wholesalers. They don't charge tax and I buy in bigger quantities to get better pricing.

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

Hm, I think I am confused. Don't we all buy from wholesalers to get better prices and the tax id is so as not to get charged tax right?

I was thinking maybe the resale part is maybe if I was to buy someones already made product for a better price because I buy several items and then resell it with my own label as my business. Would that be correct? Or are you saying if I buy bulk soap base from bb.com and make soaps am I then reselling?
Thanks. Sorry for so many questions.

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

Maybe this will help. I've had an established business for years and I collect sales tax. As a reseller, in the state of Florida, a business must collect and file sales tax returns (usually monthly). My business isn't soap but , if I had sold soap at a farmer's market, I must collect sales tax. Some might price their products to include the sales tax and the total price per product would include the sales tax. Makes it easier for the customer to see $5.00 per bar, but the company has to back the sales tax out of the total and send it to the state. In Florida, we register for a sales tax exemption certificate (allows for purchases without paying sales tax to the vendor), county occupational license. Unless you do a DBA, you'll need a Federal ID #. Without going into too much more detail, since you have internet access, go to your state's website and see what's required. Each state is different.
Florida is a nightmare for accounting purposes, because each county has a different surtax, making the sales tax different for each county. Few people do it the correct way, but technically, we're to collect the sales tax amount of the county we ship to and not collect the sales tax % of the county the company is in. No joke, this is the way it's set up. Quickbooks can't even figure this. I have to use an Excel spread sheet.

Find out your state's requirements....you'll get the hang of it in no time.

Hi, luvzsoap,

Just wanted to chime in here, too. I know how confusing all of this stuff is. (Hi, group3studio! I'm in Florida, too! You're right - all of the counties with their different surtaxes are maddening.)

The process for getting business licenses and resale certificates varies state-to-state and county-to-county. Here's what I did in my county in Florida, although it may be different for you: First, I got a permit for a small home-based business from the Dept. of Growth Mgt. Then I took that to my county tax collector and got a business tax receipt, which pretty much just says that I had satisfied my county's requirements for having a business. Then I registered my fictitious (or DBA) name with the state. And finally, I registered with Florida to collect state sales tax (and that also gets you a resale certificate.)

So what do you do with a resale certificate? You present it to buy qualifying items tax-exempt. What is a qualifying item? Well, it gets tricky there. My understanding is that anything that is going directly into the product that I will be selling (or reselling) is tax-exempt because when an in-state customer buys it from me, they are going to pay the tax. I would collect tax on sales made in my state (Florida), either in-person or online. If I am shipping a sale to Florida, I collect tax (along with any county surtaxes). If I sell something to someone in Georgia, for example, I don't collect tax. (So who pays taxes on stuff I bought tax-exempt if I sell it to someone out-of-state and don't collect tax? Well, technically, I believe that someone who buys something out-of-state and isn't charged tax for something that they would normally pay tax on is supposed to report it to their state's Dept. of Revenue as "use tax," but few people do this.)

Okay, so back to how you use a resale certificate. Say I want to buy some supplies from a wholesaler in Florida. I am going to need a resale certificate number to buy bases, FOs, colorants, etc. tax-exempt. (I would still pay tax on things like molds, scales, soap cutters, etc. because although I use them to make my soap, they are not actually included in the final product that I am going to sell.) If I go down to my local craft store and buy some base or FO (unlikely, but play along ), I should be able to present my resale certificate and get those tax-free.

If I buy from Bramble Berry, I don’t worry about showing my resale certificate because they are based in Washington and would charge tax to Washington residents only anyway. So, if I buy bases, FOs, etc. from BB and don’t get charged tax, I am good to go. BUT … if I buy molds or soaping books or hardware or something that isn’t going directly into the final product I’m selling from BB, then I am supposed to pay what is called a “use tax” to my state’s Dept. of Revenue. (Use tax is what I would have been charged had tax been collected, and it is applied to non-tax-exempt purchases.)

As far as what qualifies as reselling, I suppose that, yes, technically if you buy base from BB and use it to make a bar of soap, you are “reselling” the base, as well as any fragrances, colorants, additives, etc. you may have put into the bar.

I know all of this info is overwhelming. Just start with s single step. Things will get rolling for you – you go to one office, they fill in a blank and send you on to the next office, and so on. Each time I got another piece of necessary paperwork taken care of, that office told me what to do next until I was done. And don’t be shy about making phone calls to various departments if you don’t understand something. I made so many calls to the Dept. of Revenue, totally confused and seeking clarification on nit-picky things.

Good luck! I promise, it’s not that bad once you roll up your sleeves and get in there! Here’s another thread that might help with some of this: viewtopic.php?f=3&t=2612

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- Jenny -
My soapy blog:
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Hi,
I am geting ready to take some soaps to a local store in Kansas. Is it okay to list the net weight of the soap on the back label with the ingredients? I spent all of yesterday making labels and then remembered the net weight was needed. The store only wants my company name and town and not address. thanks

I thought the net weight had to be on the front?

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

HI,
thanks, that was what I thought after i got the labels done. I will keep making them over until i get it right. lol I have spent hours on the labels so now will go back and make them right. I do not want to take them to a store mislabled. Its much easier to make the soap then do all the rest of the needed things to get them right!!!!

Thanks again,
barb

jrose729
Thank you so much for all that great info. It is amazing how confusing it is here. Here in NC it seems as though I need a Privilege license to sell within the city limits. They don't call it a biz license actually. I did get my DBA first, then my fed tax id# so I could then get my sales tax id#. No one seems to think I need a resale license also. I am going to visit a Farmers Market tomorrow where there are 2 soap makers there and I am going to see if I can pick their minds for a minute. The FM manager said they are both really nice and would probably help me with some ??

I too have been getting my labels just so and I have all the ingrediants listed, weight and biz name, number but not address. I hope that is ok. Sheesh. I can't even imagine how teeny my fonts would be to fit all that on there. Does everyone think it sounds ok? I really want to look at their bars tomorrow and see what they have also. Not that they are perfect but we will see. Thanks for everyones help.