State Payroll Tax Issues/State Sales Tax/Business Licenses

State Payroll Tax Issues/State Sales Tax/Business Licenses

One of your first steps as you being your business, is that you will apply for a State Taxpayer ID Number to pay your Income Tax and Net Worth Tax obligations. This will be true for a C Corporation , S Corporation, LLC, LLP, Partnership or Proprietorship. If you are an S or an S Corporation or an LLC that converts to an S Corporation for tax purposes you will need to have a withholding number and also register with the Georgia Department of Labor, even if you have no other employees, other than yourself as tax law requires these entities to pay a fair and reasonable salary given position and profit. If you do this online, you may also get a Federal ID number at the same time. To obtain a state withholding number you will typically contact your individual states Department of Revenue.

State Withholding

To report your State withholdings, your State will assign you to a reporting cycle; be sure to carefully review the reports they send, as the due dates will be detailed on the forms. Federal and state withholding (depending upon and varying by state) Employers are required to submit to their employees a withholding form/certificate, on which the employee documents and confirms their filing status and their number of exemptions. Employers then are required to use this information to determine the statutorily withholding based upon withholding tables required by the IRS and varying states. The withholding certificate for the IRS and Georgia are a W-4 and G-4 (Georgia's form for example) form respectively. It is the employees responsibility to complete these forms and then for the employer to withhold these amounts as directed. All withholding taxes are taken out of an employee's check and then remitted over to the respective taking authority. In this capacity, an employer is required to act in a fiduciary capacity in the withholding and payment of these monies
Obtain a State Sales and Use Tax ID Number.

If you will be selling goods at retail, or have a rental business you will need to collect Georgia state sales tax, and any local sales taxes, that might be due. In Georgia, for example, the additional sales tax due can vary by county and can be determined by their web-site. If you are buying items that you will be re-selling at retail, you are not required to pay sales tax when your purchase those items you are re-selling. However, if you are buying the items you plan to use in your business in any way, and the item is not for retail sale, then you should pay sales tax on an items initial purchase. If for any reason, you fail to do so you can then pay the attendant sales tax due on the Sales and Use Tax Form itself.

Department of Labor/Unemployment Insurance

Employers are required to pay for SUTA/state unemployment taxes using this form. Each state will have their own individual forms, procedures and methods to pay. Working with your State Department of Labor/Revenue you will be able to obtain the necessary forms and protocol for paying your State Unemployment Taxes. This tax is paid exclusively by the company, and there are no required withholding or additional taxes being paid by the employee. Both the IRS and Georgia, for example, limit the amount of taxes a company will pay on any given employee to a maximum salary amount per year. These monies/taxes are due on the first wages paid a particular employee in any given calendar year. While the IRS assessment rate/percentage is statutory the rate to Georgia fluctuates based upon an individual companies claims experience.

Business Licenses for your Business: How to Obtain a City or County Business License

Sometimes called an Occupation Tax, a business license should be obtained from the county or city in which your office is located. If you primarily work out of your home, then obtain the license in your home county. You can find out the proper procedure for doing this by calling your city hall or county courthouse. If you are located in the city limits of a town you should obtain your business license from the municipality in which your business operates. Please note that many cities and municipalities allow for the registration forms to be down loaded on-line. Generally licenses have a basic underlying fee which then fluctuates based upon your projected sales levels.

To read more about business issues affecting your new Georgia Business visit http://www.hiscpa.com/checklist.htm
To Get Help in Choosing the Right Entity Type for your Business visit http://www.hiscpa.com/article2.html
Understanding Corporate Income Tax Returns and Year-end Tax Filings for Business Owners http://www.hiscpa.com/business-tax-returns.html
To learn if your workers are employees or independent contractors http://www.hiscpa.com/employee-checklist.htm

Payroll tax returns and their attendant issues are the bane of many business owners both big and small. Tax law at federal, state and local levels often leaves an entrepreneur feeling both dazed and confused. There is no greater area of need for tax simplification than in the area of payroll tax issues. Payroll tax returns and payments are due to the varying regulatory agencies at differing times, unique and special forms and often what appears to be conflicting reporting styles and forms. Unfortunately, this is just the tip of the confusion to which you will help find clarification below.

John Dillard is a Christian Speaker/Author and Certified Public Accountant (All Rights Reserved). To See how he takes Christ along with him to work visit http://www.hiscpa.com/  (An Atlanta CPA firm) and for his latest book Overcoming Life's 9/11's: Job's Journey and to learn about his ministry visit http://www.john-dillard.com/