Getting into Retail?
Double check local licensing. Reach out to your town or city's licensing board and/or economic development office to find out more.
You will have to set up a tax account with both the state and federal government
Read the rules for resale and exempt use certificates here from mass.gov.
You will want to fill out and submit this ST-4 a Sales Tax Resale Certificate
Be sure to understand rules for selling online too!
Important to understand: If you are reselling things, you have a responsibility to take tax on it for the state, you are only holding that tax until you pay the state. Please review the tax page! Additionally, when you go to buy things to resell from a distributor or warehouse, you will not want to pay the tax, this is why you show them the ST-4. That will allow you to purchase from them without paying tax. You are essentially saying I will not pay it but the customer will. Then you are solely responsible for making sure the state gets the tax.
Beware, the state NEVER accepts "I didn't know I had to collect tax" as an answer for why you were not doing it.
Getting into Selling Food or Drinks?
Double check local licensing. Reach out to your town or city's licensing board and/or economic development office to find out more.
You will have to set up a tax account with both the state and federal government (see info above)
Make sure you understand the rules for food and drink here from mass.gov
Important to understand: If you are reselling things, you have a responsibility to take tax on it for the state, you are only holding that tax until you pay the state. Please review the tax page! You are essentially saying I will not pay it but the customer will. Then you are solely responsible for making sure the state gets the tax.
Beware, the state NEVER accepts "I didn't know I had to collect tax" as an answer for why you were not doing it.
Education - Did you know that you can keep all the expenses and then once your business start bringing in revenue, use this as tax deductions. Yes, taking these classes count! Even transportation expenses to and from classes!
What is personal vs. a business expense?
To determine whether you can deduct an expense, ask yourself: Is this expense both ordinary and necessary to the business? The IRS requires both elements.
An expense is ordinary if it is common and accepted in your industry.
An expense is necessary if it is helpful and appropriate for your business.
Common small business deductions include costs for:
Tax Guide for Small Business from IRS
Online Sales Tax: Starting October 1, 2019 "Remote Sellers and Marketplace Facilitators" must collect tax (6.25%) on sales of tangible personal property or services into Massachusetts when they have Massachusetts sales that exceed $100,000 in a calendar year. These taxes must be paid on the 20th of the month following the previous months activity.
Gift Cards & Certificates: Sales are initially recognized as a liability. The gift card or certificate revenue is recognized after it is redeemed. Most gift cards/certificates are redeemed within 60 days from purchase. If cards/certificates remain outstanding (Breakage) for a long period of time there are three methods to adjust your liability. First, Prorate Method, second, Simple method,and third is to escheat the remainder to the state after three to five years. All this seems a bit complicated but most small businesses will not have this problem.
Charitable Donations:
1. Business: Corporations (not S corporations) can make charitable donations on their income tax returns. All other businesses pay taxes as pass-through entities...........The deduction must be made through the personal part of the return.
2. Non Cash Donations: Donations of products or services to a qualified Charitable Organization will be based on the cost or the Fair market Value of the items donated and can be deducted on the tax return based on the Business Organization Structure.
3. Volunteer Time: Volunteers who provide professional services for free to a qualifying nonprofit organization cannot claim a tax deduction for the value of their time or services. They might be able to deduct uniforms, transportation, or other unreimbursed out-of-pocket expenses that they paid in order to volunteer.