What does it take to legally open an online retail store in Dallas, TX?

Gina wrote: “I want to start an online retail business through Amazon, finding discounted products and reselling them at their original price to customers in all 50 states.”

Hi Gina, Jagcproducts sounds like a promising venture. A web storefront lets you reach shoppers in every corner of the country without paying for a physical shop, and good product photos work for you around the clock. The Texas sales and use tax permit comes first here, because it is what lets you collect sales tax and buy inventory wholesale. Below we walk through the three things every new business in Texas sorts out (structure, tax IDs, and licenses) and then sum it all up.

Picture your first Amazon order arriving: in Texas that day is the reason you need a sales and use tax permit, which also lets you buy discounted stock for resale without paying tax up front. Amazon generally collects sales tax on marketplace orders for you, even across all 50 states, but wholesalers and liquidators will still ask for your permit and resale certificate, and any sales outside Amazon are on you. Keep invoices that show where each lot came from, because brand-name discounted goods sometimes draw questions about authenticity. Texas has no wage income tax, so one unemployment account is all you need if you hire. An LLC keeps your inventory risks separate from your home.

What Jagcproducts needs

1. Texas sales and use tax permit – It lets you collect sales tax from customers and hand your suppliers a resale certificate, so wholesale purchases of inventory stay tax-free and properly documented.
2. LLC (limited liability company) – Forming an LLC puts a legal wall between the business and your personal assets. A customer who claims a counterfeit handbag came from your shop might file a complaint, and with an LLC that fight stays inside the business. Once profits grow, an LLC can elect S corporation tax treatment, which can lower self-employment tax; ask a tax adviser when the numbers justify it.
3. Texas assumed name certificate – If you operate as a sole proprietor, or under a name different from your LLC's exact legal name, registering "Jagcproducts" lets you use it on signs, invoices, and your business bank account.
4. EIN (federal tax ID number) – You plan on 1 employee, so the federal tax ID number (EIN) is required for payroll, and you will also use it for the business bank account and supplier accounts.
5. Texas employer ID – With 1 employee, you need a state employer account number for unemployment insurance. Texas has no state income tax on wages, so there is no withholding account to open, which is one less form to file.
6. Business license – A business license puts Jagcproducts on the official map in Dallas, which landlords, banks, and many customers will expect to see before they sign anything. Home occupation rules commonly cap client visits and delivery trucks on a residential street, so read them before you print business cards.

By the numbers: Banks, insurers, and tax forms will ask for your industry code. For an online retail store it is NAICS 448190 (Other Clothing Stores), 458110 under the 2022 update. With 1 employee planned, you are already creating jobs in Dallas. That makes 6 items on your list.

Tip: Learn where you have sales tax obligations, since online sellers can owe collection in other states once sales there reach certain thresholds.

To recap: Jagcproducts in Dallas, TX needs a sales tax permit, an LLC, a DBA, an EIN, a state employer ID, and a business license. Handle these early and the business starts on solid ground.

We can file your seller's permit and the other registrations for you: start here.