At what point should I start worrying about charging sales tax?
Question:
At what point should I start worrying about charging sales tax?
I have been selling a few things on ebay over the last couple of months. I have sold. A lot of it is expensive photographic equipment and computers that I have bought from friends, on craigslist and at the swap meet. I have sold ,019.31 over a 2-month period.
Is it time to file with the California Franchise Board yet or should I wait a while longer? Also, do I have to charge sales tax if an item is used?
Best answer:
Answer by A A
The following factors, although not all inclusive, may help you to determine whether your activity is an activity engaged in for profit or a hobby:
Does the time and effort put into the activity indicate an intention to make a profit?
Do you depend on income from the activity?
If there are losses, are they due to circumstances beyond your control or did they occur in the start-up phase of the business?
Have you changed methods of operation to improve profitability?
Do you have the knowledge needed to carry on the activity as a successful business?
Have you made a profit in similar activities in the past?
Does the activity make a profit in some years?
Do you expect to make a profit in the future from the appreciation of assets used in the activity?
An activity is presumed for profit if it makes a profit in at least three of the last five tax years, including the current year (or at least two of the last seven years for activities that consist primarily of breeding, showing, training or racing horses).
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April 5, 2012
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