We have taken over a demolished campground near Guntersville, AL (Honeycomb, if anyone is familiar with the area) and are currently in the process of rebuilding it and opening it to the public. We have not previously done business in Alabama, so here is what we have had to do so far to be legal:
1. Identified and retained an attorney in the state to act as our registered agent (required for in-state process service)
2. Registered as a "foreign corporation" (foreign meaning we are from another state) with the Secretary of State
3. Registered with the state for a Corporate income tax number
4. Registered with the state for a business privilege tax number (Nothing sets me off faster than when I get the pious "doing business in our state is a privilege" spiel from a state. What an awful theory of government and individual rights that statement represents!) The privilege tax (which is in some sates, like AZ, a euphemism for sales tax) seems to be a second income tax in AL, calculated on a slightly different basis. (Update: apparently the first year's taxes must be paid in advance, at the time one starts business in the state).
5. Registered with the state (yes, with another ID number) to collect sales taxes
6. Registered with the state to collect lodging taxes (By the way, spent a couple of hours with the code trying to figure out what these taxes apply to and what they don't, as this varies by state. Also, the tax rate tables are a complicated mess, and can vary for two locations located a few yards from each other).
7. Registered with the County (yes, with another ID number) to collect county sales tax. Actually, they outsource this collection to a private company called "Revenue Discovery Systems" which is a nice Orwellian name for a private tax collector. Is tax farming coming back in vogue?
8. Registered with the County to collect county lodging tax. (sigh, we are going to have to file multiple reports each month to report all of our transaction taxes - some states actually have unified reporting and payment).
9. No city taxes, it turns out, because we are just outside of any incorporated areas. Thank goodness for small favors
10. Registered for state unemployment taxes (yes, with another ID number). This was one of those circularities that really drive you crazy. I can't pay people until ADP has the state set up for us in the payroll system, but they need an unemployment number that the state refuses to provide until we have issued at least $1500 in state payroll checks. Arrrgghhh. Fortunately (?) ADP will go ahead and start issuing the checks without a number, but there is a $50 per month fee for doing so.
11. Registered for state income tax withholding (yes, with another ID number). Again, need this to pay people legally
12. Don't know yet if there is County withholding. There are county income taxes in some places.
Expect in these forms to fill out the exact same data over, and over, and over again. The state will maintain corporate records in about 6-8 parallel data bases and corporations are responsible for keeping every one of these data bases correct.
What I have not done yet, but know from experience I will have to do
1. Obtain county occupancy permits or licenses
2. Obtain county and/or state health inspections
3. Obtain Coast Guard inspections of the docks
4. Register with the state and/or county to pay personal property taxes
5. Get miscellaneous bizarre licenses that are absolutely unpredictable and impossible to discover until we are in violation, like the egg merchant license in KY and CO.
I thought for about 3 microseconds about selling beer and wine in our store, but I am sick and tired of the intrusive, picky, petty, and time-consuming liquor licensing processes in most states, and the income we make from alcohol sales simply doesn't measure up to the hassle.
Postscript: I try to remember that we should actually be thankful for this mess. Though it represents almost 20 hours of my personal time to set up, and hours of time each month filling out forms and reports, not to mention thousands of dollars a year to ADP to help manage, this mess is still orders of magnitude better than what an entrepeneur would face in France or Germany.
