Starting a small business
in Business, Accounting & Taxes ·
Raymond Martinez10 said:Henry Edwards33, this "rule" mostly applies to service-based businesses—I highly doubt it makes sense for retail if we're talking about staying strictly "on the books."
A small mom-and-pop shop has a low EIN, so if they just have minor overhead—accounting, utilities, maybe some gas...—it might actually pay off to register for sales tax, at least according to my math. But look, you really need to run the numbers on paper first to be sure. One major headache with opting into the sales tax system is that five-year commitment obligation that amberbadger17 already pointed out.
It is honestly frustrating that they don't allow people—at least from what I have gathered—to opt out of the system once they've voluntarily joined. For instance, I opted in because I know my revenue will exceed $85,000, and I wanted to avoid the administrative headache, which is how many others operate. I am also certain my revenue won't come anywhere near $230,000.
I am not sure if my assessment is correct, but when the government implements a massive shift like this one, where the rules of business are drastically altered, they ought to give sole proprietorships the chance to choose their path again.🤷
