Legal Question in Business Law in Texas

Starting an internet business

I will be starting a wholesale business on the internet soon. I am the sole proprieter and I have no employees. I have decided not to sell merchandise to residents of Texas due to the business and use tax law. I did not want to collect sales tax on the items I sell because the tax would be pretty excessive for my customers. Will I have to pay these taxes anyway when I file my yearly income taxes?

I have posted (This offer is not available to residents of Texas) on my website. All business will be conducted on the Internet. I will not store any items in Texas. And my suppliers are in other states. As I receive items from my suppliers they will be sent directly to my customers. What certificates will I need from the state of Texas? Will I have to file a DBA? Will I still need a sales tax number? I will not conduct business in the state of Texas.

I'm offering this as a business opportunity. Customers can buy from me at wholesale and sell retail. Our relationship will be that of customer and supplier. If I offer a tutorial on my website to get my customers started and offer sales aids for purchase by them, will I be seen under the law as an employer? What disclaimers will I need to post?

Thanks for helping


Asked on 2/17/04, 4:22 pm

1 Answer from Attorneys
Peter Bradie Bradie, Bradie & Bradie

Re: Starting an internet business

Your income tax is tax upon your income, not a sales and use tax. You'll need to file an assumed name certificate (a d/b/a). If the goods are drop-shipped from your suppliers to non-Texas residents you won't have any sales or use taxes at this time.

Your customers will in no way be your employees.

I suggest you sit down with a business attorney to get into the rest of the nitty-gritty of the business enterprise you're considering.

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Answered on 2/17/04, 5:17 pm


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