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  1. #1
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    Business license for hosting or reseller needed?

    I was wondering and please forgive me if this is a noob question, but is a business license needed to run a hosting business when you are renting servers in a data center somewhere? What about if you are reselling services for another company in a different state? Thanks for any insight!

  2. #2
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    Not that i know of, We operate from the UK and we lease servers from the US (California).
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  3. #3
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    That depends on the laws in the area you live. I think generally in the US you have to have a business license to run a business. Also to open a bank account for your business most banks want to see the business license.

  4. #4
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    I went down to the municipal center for my town today and bought myself a business license. Just to be on the safe and legal side of things. It only cost about $50 for the year and to be be honest it cost me more to rent a po box at the UPS store for 3 months!

  5. #5
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    The only reason you would need a business license is for tax reasons. I think to have a tax number you need to be a registered business. And you only need to charge tax dependsing on were your business resides. If you live in a state and someone purchases hosting from you and they live in the same state, then you must charge them tax otherwise its tax evasion. But if you sell to people out of your state or to other countries you do not need to charge tax and therefore do not need a business license.
    Last edited by offshorehostingnl; 10-26-2009 at 06:26 PM.

  6. #6
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    Quote Originally Posted by offshorehostingnl View Post
    The only reason you would need a business license is for tax reasons. I think to have a tax number you need to be a registered business. And you only need to charge tax dependsing on were your business resides. If you live in a state and someone purchases hosting from you and they live in the same state, then you must charge them tax otherwise its tax evasion. But if you sell to people out of your state or to other countries you do not need to charge tax and therefore do not need a business license.
    Sure, unless you're in business in the United States, in which case none of the above applies.

  7. #7
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    Quote Originally Posted by Annuit Cúptis View Post
    Sure, unless you're in business in the United States, in which case none of the above applies.
    Well no it pretty much applies everywhere, the US was an example. The same goes for Canada and its provinces and if you live in the UK and other Europe countries you need a VAT number.

  8. #8
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    You do not pay taxes on web hosting, whether or not your in the same state as your provider.

    A business license is more of a permit, it does not give you some sort of special "tax number."

  9. #9
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    Texas requires us to charge sales tax on hosting

  10. #10
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    Same here, you host with us in Texas, you pay. Also if you are a real business (i.e. you do things legal) you have to accrue tax on anything you purchase out of state anyway and pay it. just an FYI.

  11. #11
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    Here in Virginia, they did not ask me for a federal tax id due to the low amount of projected gross revenue I listed I suppose....but I am not sure about paying any taxes here as it was not mentioned at all.

  12. #12
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    Wow in Texas you have to pay taxes on services purchased not only in state but out of state as well? I guess you guys have a low (or is it no) income tax to compensate?

    California has the same rule for goods (but not services) purchased out of state.

  13. #13
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    Quote Originally Posted by Annuit Cúptis View Post
    Wow in Texas you have to pay taxes on services purchased not only in state but out of state as well? I guess you guys have a low (or is it no) income tax to compensate?

    California has the same rule for goods (but not services) purchased out of state.
    Was part of a company that got audited, and they forgot to accrue taxes on invoices paid out of state. There were penalties...

  14. #14
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    Quote Originally Posted by Annuit Cúptis View Post
    Wow in Texas you have to pay taxes on services purchased not only in state but out of state as well? I guess you guys have a low (or is it no) income tax to compensate?
    Yes, we get to pay sales tax on everything.
    We also have to charge sales tax on hosting even if the client is not in Texas.
    You are right, there is no state income tax, but I am pretty sure it all comes out to the same in the end.

  15. #15
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    Many states will require a business license (not an incorporation) if you are selling goods. So if you happen to be selling computers or hardware you state or local muncipality may require it.

    One word of advice if you're getting started. Do not get an Federal EIN number until you consult with your accountant. Many business guides have it on a checklist and it may not apply until you reach a certain employment threshold.
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  16. #16
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    Oct 2009
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    I can provide you a 100% sure answer for the a Business License in the UK.

    You don't need it. Not so sure about the USA.

  17. #17
    All You Need To Do Is First Contact City Hall In Your State And Ask Them That Same Question.I'm In Cali All I Do Is Fill Out A w-9 Personal Taxes.
    Last edited by EzProHost86; 11-03-2009 at 01:14 AM.

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