You might be wondering what the Illinois Business Tax Number is and how it applies to your Etsy shop if you are an Illinois-based business trying to sell your goods online. Simply put, the Illinois Business Tax Number is a special identifying number that the state of Illinois issues to firms for tax-related reasons. The Illinois Department of Revenue uses this number to keep track of your payments for sales and income taxes.
Even if you only sell a few items a year, as an Etsy seller, you must disclose any income from your shop on your tax returns. If you are selling taxable goods or services in Illinois, you must obtain an Illinois Business Tax Number. To file your Illinois sales tax returns and to make any necessary tax payments, you must have this number.
You may not require an Illinois Business Tax Number if you are selling on Etsy for fun rather than as a business. However, you must get this number and record all money received on your tax returns if you sell on Etsy as a business. This covers earnings from the sale of tangible commodities, digital goods, and services.
To sell on Etsy, you might additionally require a tax ID number in addition to the Illinois Business Tax Number. A tax ID number, commonly known as an EIN or Employer identifying Number, is a unique identifying number provided to businesses by the federal government for tax purposes. Your Social Security Number is acceptable as your tax ID number if you are a lone owner selling on Etsy. However, you will require an EIN if you employ people or conduct business as a partnership or corporation.
Regarding Etsy fees, the website levies $0.20 per item for listing fees and 5% of the total selling price, including shipping costs. You will also pay a payment processing fee of 3% + $0.25 each transaction if you process your payments through Etsy Payments.
In conclusion, it’s critical to comprehend how the Illinois Business Tax Number affects your shop if you sell on Etsy and are headquartered in Illinois. If you are offering taxable products or services, be careful to get this number and include all income received on your tax returns. If you run your business as a corporation or partnership, you might also want to think about getting a tax ID number. Finally, while setting your product’s price, consider the costs of selling on Etsy.