As I work through the process of self-publishing my Greenville series, I thought it might be informative for my readers to hear about some of the issues I’ve faced. I’ve already mentioned registering my assumed name with the Minnesota Secretary of State’s Office. Of course, when you’re trying to run a business, that’s only the beginning.
When you want to sell a product, the fine State of Minnesota (as well as the other fine states in this union) requires the seller to collect sales tax. Because I am going to be selling books through Cafe Press and Cafe Press requires a tax number, I figured that the tax number needed was a sales tax number. In Minnesota, businesses can apply for a sale & use tax number online. I followed the online process and submitted my form only to be given the message that I couldn’t complete the process online. That meant a call to the Minnesota Department of Revenue to figure out what was holding up the process. I thought perhaps the fact that Hubby and I had a sales & use tax number on file from a previous business was the glitch in the system. It was.
While I was on the phone with the helpful Dept. of Revenue staff person, she asked me a very good question. She said, “Does Cafe Press pay the sales tax, or do they turn it over to you to pay?” I honestly had no idea, but my need for a sales & use tax number hinged on the answer. If Cafe Press paid the sales tax, then I wouldn’t be issued a number. So I emailed Cafe Press with my query and got a quick reply via email that had nothing to do with my question. I called Cafe Press in order to talk to a real live human being. I got one right away (yippee!). After explaining all this sales tax mumbo jumbo and the need for a number, I asked the Cafe Press staff person, “Who pays the sales tax?” She replied, “The customer.” Of course. Duh. I had asked the question the wrong way. I rephrased it to, “Who collects the sales tax and turns it over to the state? Cafe Press, or me?” She put me on hold in order to get the answer. (See, it wasn’t such an easy question, was it? Believe me, I looked all over the Cafe Press site trying to figure this out before calling.) When she came back on the line, she said that Cafe Press collects the sales tax. This means that I don’t need a sales & use tax number. (One complication removed from my life!)
Before I hung up with Cafe Press, I wanted to know which tax number the company required of shopkeepers. It turns out that you need either a federal EIN (Employer Identification Number) or a Social Security number. What Cafe Press is tracking is your income as a business. If you’re a big business, say a corporation, and you have employees, you need the EIN. If you are a sole proprietor, you need your Social Security number. You can file for an EIN as a sole proprietor if you prefer not to give your Social Security number. (The whole discussion of EINs could launch me into another hairy issue. Somehow, Hubby and I ended up with two EINs when we were operating our previous business, even though we had never applied for them.) Cafe Press needs a tax ID number in order to report your income from sales through the site to both you and the IRS.
There you have it. Hopefully, this explanation about tax numbers and Cafe Press will save you some of the grief I went through.