Selling online requires you to juggle both the federal laws and the laws of several different states.
In this session, we’ll be covering:
- how to make sure your business name doesn’t land you in legal hot water
- why your state matters for the day-to-day stuff
- the 6 steps required to navigate the sales tax minefield
- when you need to start caring about California’s Proposition 65
- which laws matter when it comes to email marketing and online privacy
- the three things you shouldn’t do when you accept online payments
- how to legally use reviews or testimonials
Ready dive in and learn the nuts and bolts of legally selling online? Here is what you’ll need to do.
- Watch/Listen/Read the workshop materials: ~42 minutes
- Complete the action items: 5-10 minutes
The Workshop Materials
There are three ways you can absorb this session’s materials:
- watch the video
- listen/download the audio
- read the transcript
Watch the video
Kiff’s note: When we hosted this workshop live, there was a Q&A session (the recording is below). If you have a follow-up question you’d like to ask me, you can join us in the artist’s Courtyard!
Read the transcript
Download the slides
Bonus: Watch the recorded Q&A session!
We had a lively Q&A session for this topic. So as a bonus, you are getting access to the recording of that session!
You can watch the whole video or jump to the timestamps below to watch just the answers specific questions:
- 6m 26s: Carolyn asked, “I have had less than happy experiences talking to insurance agents in the past and really wonder how necessary is this task. Is there some way this can be done online so I don’t have to put up with insurance agent/broker?”
- After this Q&A session, I obtained membership pricing for ACT Insurance! You can now save $10 on an annual or show policy. To get your member pricing:
- Go here
- Use the referral code: artistsjd10
- After this Q&A session, I obtained membership pricing for ACT Insurance! You can now save $10 on an annual or show policy. To get your member pricing:
- 8m 7s: Mel asked, “I’m not sure where to start with filing for LLC status in CA. I’ll also be going through the steps for Business Liability insurance. Any recommendations for CA brokers to start the process?”
- Here’s the link to the join the artist’s Courtyard and get instant access to the LLC course
- And here’s the contact info for the broker I use in CA: Ambere St. Denis, 415-572-2173, ambere@crimsoninsurance.com
- 13m 34s: Jennifer asked, “Is there a difference between a business license and a vendor resale certificate?”
- 18m 0s: Jessica asked, “Is it worth the effort to recoup paid sales tax if you are charged it? (e.g. Etsy now automatically adds it)”
- 23m 56s: Aba asked, “What do you do with the sales tax certificate once you have it?”
- 27m 7s: Myra asked, “How do I best to keep track of all the details about the sales numbers and dollar value going to each state?”
- 30m 36s: Jessica asked, “(1) If one sale automatically submits the sales tax, how does that affect the submission of sales tax? (2) If a marketplace submits sales tax, is the business still required to register for a sales tax permit?”
- 33m 0s: Kristen asked, “Could we be liable to collect sales tax for two or more different states on the same transaction?”
- 38m 39s: Kristen asked, “What bookkeeping software do you and your clients have good experiences with to date? Are there any that seem to be a better fit than others for creatives?”
- 42m 28s: Myra asked, “What happens if I find at the end of the year that I’m not required to pay sales tax since I didn’t meet the minimums?”
- 44m 48s: Kristen asked, “If we plan on selling higher end items – say original artworks upwards of $5K or $10k – but we have never sold artwork to someone in that state before – what should we do about applicable taxes if we have had no prior reason to get a sales tax certificate for that state prior to the online sale?”
- 49m 52s: Kristen asked, “Can you talk about or recommend a resource(s) with how we can learn about what taxes might be due outside the US?”
- Here’s a VAT resource (for the EU) and one for Canada.
- 52m 15s: Kristen asked, “Figuring out if we have to charge or not charge sales tax has my brain a twist. In your experience is this something that a service like Tax Jar can help us with?”
- 57m 31s: Jessica asked, “A marketplace charges and remits sales tax for an item that is non-taxable. What should a business do for the buyer who has been incorrectly charged for sales tax?”
- 59m 9s: Myra asked, “When Etsy remits the sales for us, do we still keep the sales tax amounts on our spreadsheets or just keep separate tabs for those taxes? What happens to those dollars at tax time?”
- 60m 34s: Kristen Girard asked, “I have heard that it inadvisable to accept ACH payments via places like Stripe because the sellers are not protected like we are if it is a credit card transaction. Any thoughts?
Session Material Links
Below you’ll find the resources I mentioned in the session materials!
- You can learn more about the 5 must-do legal tasks in this free email challenge.
- Here’s a resource on how to do a trademark search.
- TaxJar’s resource on the current status of all of the economic ties laws.
- TaxJar’s resource on when you need to get a temporary permit when selling at out-of-state shows.
- Information on the streamlined sales tax process.
- TaxJar’s (free with a trial) Sales and Transactions Checker that will help you decide which states you need to file sales tax in.
- California Proposition 65 labeling requirements
- States where adding a credit card surcharge is illegal
- The credit card processing services I mentioned are:
Your action items
For some of you, this session might have created quite a few action items.
And it might be overwhelming to figure out what is and isn’t most important. If so, then here’s the order that I’d suggest tackling them:
- Do the 5 must-do tasks (sign up here)
- Update pricing to cover the cost of credit card processing fees
- Create a process to use reviews and testimonials in your own marketing materials
- If you make a physical product that you charge sales tax for, get a sales tax certificate for your state
- Go through the six steps to decide which states you must collect and remit sales tax to
- Do a trademark search for your business name
- Create warning labels for all products that must be Prop. 65 compliant
Here are your action items for this session:
- Create a to-do list of any items that this session created and sort it using the list above.
- Block off one hour on your calendar to begin tackling your list