Alice Nadin Responded on 12/9/2009

Jeannie-

There are 3 levels of taxes to be concerned: Federal, State and Local.

For the Federal you need to obtain an EIN or Employee Tax ID, even for a business of 1. Its free & easy to get. It will be needed when you file your quarterly or annual tax return to maximize your business tax deductions such as the $.55 per mile you can deduct on every trip you make to obtain supplies for your business or the materials you use in your business for example. So go here and get that ID:
http://www.irs.gov/businesses/small/article/0,,id=98350,00.html

The State you will need a State Tax ID and will need to collect applicable sales and use tax. Sales tax will be on items you sell within the State. Use tax is typically on items you buy outside the state and use in your business (or personally). The State will want you to report the purchase and pay the taxes you would have paid if you bought it inState. The biggest target for this tax are computers people buy outside the state. In your case it could be a quilting frame or material. So see here for your State's registration page:
http://dor.wa.gov/content/doingbusiness/
Also find the section that tells you want items you need to collect sales taxable in your State. Watch out for sometimes services are very different that merchandise. That information is also on the link I just gave you.

Locally you may need a business license and some cities/towns collect business priviliage taxes. It varies widely - call your city hall

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