Starting a Business in NY

Go To Great Panes, Kathryn Maloney ©2012-2015

As with all information from non-official websites please check your responsibilities with your state & local authorities–I do my best to link directly to them here, but you should always go read the source yourself to be sure what you see here, or anywhere else, is accurate for you & your business.

Starting a business in NY?

The 3 basic things most sole-proprietor* sellers do to start up their business:
Please note: Certain sellers will need additional steps to start up properly, see below.

1. Register your business name with the counties you have a physical presence in–like where your home is if you sell online from home–if you aren’t selling under your given name. (For example, register if you are selling under “SoapSmith” instead of your given name of Jane Doe.)

Registering your “Doing Business As” name (DBA) first allows you to use your business name in the next few steps.

2. Register with the IRS to get an Employer ID Number (EIN).
(Optional for sole proprietors unless you expect to have employees.)

In short, you don’t ‘need’ one as a sole proprietor with no employees, but there’s no downside to getting one–and there are downsides to not getting one, like having to provide your Social Security Number to credit card processors (like Etsy’s Direct Checkout and Paypal) if you don’t have one. It’s free and easy to get straight from the IRS. (Don’t pay to have another website do it for you!)

3. Register for New York sales tax before you start to sell. Most sellers are required to collect and remit sales tax on their in-state transactions, even if just selling online or at craft shows. You must register with the state to be authorized to do this–again free and easy, do it yourself. If you got an EIN, NYS will use it as your sales tax id number.

That covers most sellers, but there are circumstances where additional registration is necessary. For example, additional registration is required for NYS woodworkers & garment makers/alterers, sellers of second hand goods in NY City, sellers who sell their goods by weight, food sellers, etc., so be sure to use the business wizard below and perhaps contact your county/city business offices to see if they have additional rules.

The New York License Center will help you find out what you need to do for the type of business you are opening and in the location you are opening it:

The Official NYS License Center (formerly done through OPAL):
See the Business Wizard link on that page for a questionnaire of what types of issues your business may be involved with, and it will present you with your filing requirements and advisory sheets.

The hardest part of using this cool tool is the first step–picking your business type. The design for this section is really poor, and after a lot of clicking I settled on Craft/Hobby Vendor since I don’t have a public location and sell both handmade and supplies. You can use the search box to put in key words to see if there’s something that better suits you.

NYS Sales Tax
In NY you must register with the Dept of Revenue (before you start to sell) to collect sales tax for your on-line sales, for live events where you are a vendor, or for your brick & mortar store if you’ll sell tangible goods to the public:
http://www.tax.state.ny.us/sbc/starting_business.htm

Please note that sales tax is a tax on the buyer and is totally separate from any income tax you will owe at the end of the year for income made through your sales.

You should also contact your city/county offices to be sure you know what local business laws there might be in your area. City/county business offices are where you’ll register your “Doing Business As” name (DBA), which is a requirement in NYS for sellers who are not selling under their given/real name:

NY General Business Code Article 9-B, Section 130

While you can achieve selling without a DBA, it’s not allowed. And if you want to open a business bank account under your business name, a DBA is what you’ll need.

Also see the links on the right for more info on the IRS, Sales Tax and business registration and more.

*Sole Proprietor is the simplest form of business where you just file your business taxes on the schedule C with your personal taxes each spring.