Starting an internet company

What is the name of your state? Illinois

this is a two part question:
A friend is thinking of starting an internet company where he will be selling tanning lotions to consumers in the US. Will he be liable for charging sales taxes & paying use taxes? I thought that there is an internet tax freedom act that states that internet purchases are tax exempt. Would he be required to register in the state of Illinois for sales & use taxes - even if he is not required to collect sales taxes?
He is on the fence as to whether to form the business as an LLC or an S corp. Other than the Articles of Incorporation / Organization (depending on what he decides) what other steps will need to be done to form the business entity?
Thanks

itlnprncss said:

What is the name of your state? Illinois

this is a two part question:
A friend is thinking of starting an internet company where he will be selling tanning lotions to consumers in the US. Will he be liable for charging sales taxes & paying use taxes? I thought that there is an internet tax freedom act that states that internet purchases are tax exempt. Would he be required to register in the state of Illinois for sales & use taxes - even if he is not required to collect sales taxes?
He is on the fence as to whether to form the business as an LLC or an S corp. Other than the Articles of Incorporation / Organization (depending on what he decides) what other steps will need to be done to form the business entity?
Thanks

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Your friend should be able to find the answers to most of these questions on the Illinois Secretary of State's website. Generally, however, if he is physically located in Illinois (even though his business is on the web), we will be required to obtain an Illinois business license, and will likely be required to collect sales tax on sales made to other illinois residents.

Information on business entity formation will also be available from the Illinois Secretary of State. Formation of an S-corp versus and LLC or other business structure will depend on a thorough review of all of the facts of his situation -- although the paperwork can be done yourself, it is always best to consult an attorney to make sure everything is done right and that your friend is obtaining and maintaining the protection he desires.