Federal Tax ID

[greenmonkey51]

I've been big into fish for a number of years, and after doing some talking with a good fish store guy giving me the scoop on how wholesalers work. I'm thinking of getting a federal tax id, so I can get wholesale prices on fish, corals, and other good stuff. Before anyone gives the support the locals line, the situation in my city for salt and freshwater fish is poor. I refuse to do any business with one store, another just has crap, and the one decent one has a good employee, but the owners head is somewhere else and they don't even have any saltwater stock. I'm wondering just where would I get a federal tax Id and any potential situations that could come up. If I'm buying for my self and I basically organize a group order from a local reef club, would there be any federal taxes that I would have to pay. Would this mess up my basic income taxes. Also this wouldn't work very well on hard goods, since online is cheaper than most wholesale list.

[Shadowspider]

I don't know how things work in your state, but here in Washington, the only thing a federal tax ID will do is allow you to pay the tax on goods every quarter or month or whatever in one lump sum rather than each time you make a purchase. Having a federal tax ID doesn't automatically give you access to purchase wholesale; you need a retailer's license in order to do that, especially on line... at least here that's how it works.

If you're wanting to be able to buy in bulk at cheaper prices, look into getting a retail license, that way you can purchase from wholesalers. The federal tax ID is not going to save you any money. You'll still have to pay regular price as well as tax, the only difference is that you have the option to pay that tax later; but you still have to pay the taxes on every purchase you make. If you don't, then yeah, you'll have problems with your income tax.... you'll get in trouble for not paying your taxes.