TexasCHLforum.com

It's a little premature considering the fact that I haven't taken the class yet, but I'd like to get everything sorted out prior to even considering teaching a class. In regards to the legal aspect of getting started, I know that I'll need to:

- File a DBA
- Get an EIN
- Get a Bank Account

But, I'm unsure of a few different things. First, I know there a good number of folks out there who rent firearms and sell ammunition to their students. What are the legal implications behind this? Since you're selling ammo, do you need an FFL?

And this is simply curiosity, when it comes to taxes, what kind of deductions are out there for a home CHL business? I know of the typical home office, mileage, etc. But, I'm a little new to this whole concept, so I'd love to not drive myself into the ground before I even get started. This is a VERY part-time venture, likely to only teach a few classes a year, but I'd prefer that it'd be all legal when the time comes.

Thanks, y'all.

You have to get the DBA before you get the bank account.

You don't need an EIN unless you are going to pay other employees.

Standard deductions for home office and milage, just like any other home based business. Also for any equipment you buy specifically for the business (laptop, projector, rental guns, etc)

If you are going to sell factory ammo, you don't need an FFL, but you do need a sales tax permit. We don't sell ammo, so we don't have to deal with that. We only rent guns, no sales tax on that. If you are going to reload ammo and sell it, you DO need an FFL.

If you are not an NRA member, then join up, and get their instructor liability insurance. Most ranges won't let use their facility to qualify your classes unless you are insured.

If you need a website, talk to The Annoyed Man on here. He will get you started.

Other than that, all I can think of is good luck to you!

silentex wrote:It's a little premature considering the fact that I haven't taken the class yet, but I'd like to get everything sorted out prior to even considering teaching a class. In regards to the legal aspect of getting started, I know that I'll need to:

- File a DBA
- Get an EIN
- Get a Bank Account

But, I'm unsure of a few different things. First, I know there a good number of folks out there who rent firearms and sell ammunition to their students. What are the legal implications behind this? Since you're selling ammo, do you need an FFL?

And this is simply curiosity, when it comes to taxes, what kind of deductions are out there for a home CHL business? I know of the typical home office, mileage, etc. But, I'm a little new to this whole concept, so I'd love to not drive myself into the ground before I even get started. This is a VERY part-time venture, likely to only teach a few classes a year, but I'd prefer that it'd be all legal when the time comes.

Thanks, y'all.

FFL is for firearms transfers not ammo transfers (unless you are manufacturing the ammo)

If you own assets of any type I would suggest incorporating and purchasing insurance. Getting an EIN and bank account are no brainer. As for tax benefits look at the IRS Schedule C and you will get a good idea. Basically any items, milage, rents, etc you pay from your business on behalf of your business you can write off. If it is a part time gig, I would stay away from the business use of home deductions as they are a pain to calculate and justify.

Renting firearms and selling ammo is subject to sales tax. Corporate receipts in the State of TX are subject to franchise tax.

Crossfire wrote:
If you are not an NRA member, then join up, and get their instructor liability insurance. Most ranges won't let use their facility to qualify your classes unless you are insured.

+1 on the NRA insurance for NRA instructors ...

The franchise fee is only applicable to businesses earning over $1M, as I recall. You may need to fill out a return, but they'll be no franchise tax paid unless you become VERY successful.

Crossfire wrote:You have to get the DBA before you get the bank account.

You don't need an EIN unless you are going to pay other employees.

Standard deductions for home office and milage, just like any other home based business. Also for any equipment you buy specifically for the business (laptop, projector, rental guns, etc)

If you are going to sell factory ammo, you don't need an FFL, but you do need a sales tax permit. We don't sell ammo, so we don't have to deal with that. We only rent guns, no sales tax on that. If you are going to reload ammo and sell it, you DO need an FFL.

If you are not an NRA member, then join up, and get their instructor liability insurance. Most ranges won't let use their facility to qualify your classes unless you are insured.

If you need a website, talk to The Annoyed Man on here. He will get you started.

Other than that, all I can think of is good luck to you!

The DBA will be the first thing that I get knocked out. In regards to the EIN, I won't have any employees, but I've always been under the impression that it was needed for other business related things (wholesale, etc.).

As far as the range go, the shooting portion will be at a gun club that is covered by NRA insurance. Each person I bring out there, who is paying to shoot, should be covered as well? If not, I'll certainly look into it.

An EIN will be needed if you incorporate. It becomes the entity's SSN.
If you are using your own SSN, (not incorporated) you don't need it.

sjfcontrol wrote:The franchise fee is only applicable to businesses earning over $1M, as I recall. You may need to fill out a return, but they'll be no franchise tax paid unless you become VERY successful.

Texas Franchise Tax Rates

The franchise tax rates are:

1.0% (.01) for most entities
0.5% (.005) for qualifying wholesalers and retailers*
0.575% for those entities with $10 million or less in Total Revenue (annualized per 12 month period on which the report is based) electing the E-Z Computation

*Qualification for 0.5% Tax Rate

Taxable Entities primarily engaged in retail or wholesale trades qualify to use the 0.5% tax rate.



Taxable Entities

Rule 3.581

What entities are subject to the franchise tax?
The revised franchise tax applies to partnerships (general, limited and limited liability), corporations, LLCs, business trusts, professional associations, business associations, joint ventures and other legal entities. TTC 171.0002.

What entities are not subject to the revised franchise tax?
The revised franchise tax does not apply to:

sole proprietorships (except the tax does apply to single member LLCs filing as a sole proprietor for federal income tax purposes);
general partnerships directly and solely owned by natural persons (except the tax does apply to all limited liability partnerships);
entities exempt under Subchapter B of Chapter 171; and
passive entities (as defined under TTC 171.0003). Note that some passive entities have an annual reporting requirement to affirm their passive status. See FAQ#8 under Passive Entities Rule 3.582.

Is there a minimum tax?
No. Corporations that owe less than $100 do not have to pay any tax, but they must file a report. Also, corporations will not owe any tax if the gross receipts from their entire business for both taxable capital and taxable earned surplus are each less that $150,000 during the period upon which the tax is based.

You should talk to an attorney or accountant - much of the advice listed above is sketchy or incomplete. For what its worth, I would give serious consideration to using an LLC instead of a corporation. You will have the same liability protection, but you should not have to file a separate tax return (if you are the only owner). Also, don't worry about the Texas franchise tax - no chance you will make enough to even come close to being subject to it.

AlaskanInTexas wrote:You should talk to an attorney or accountant - much of the advice listed above is sketchy or incomplete. For what its worth, I would give serious consideration to using an LLC instead of a corporation. You will have the same liability protection, but you should not have to file a separate tax return (if you are the only owner). Also, don't worry about the Texas franchise tax - no chance you will make enough to even come close to being subject to it.

An accountant or attorney will be able to explain the different forms of company structures, their advantages and disadvantages. I was using (abusing?) the term "incorporate" to refer to any of the company/corporation structures.

Also, I have verified with my Financial Planners, that the no-tax threshold for the Tx Franchise tax is $1M this year. I've asked for more info from my accountant, but believe this to be correct.

If I incorporate, I'd go with an LLC.

Though, besides the liability benefits, what else would benefit me?

sjfcontrol wrote:Also, I have verified with my Financial Planners, that the no-tax threshold for the Tx Franchise tax is $1M this year. I've asked for more info from my accountant, but believe this to be correct.

The threshold for reports filed in 2011 (based on 2010 activity) is $1 million. For reports filed in 2012 (based on 2011 activity) the threshold drops to $600,000 (my knowledge of Texas tax laws > my knowledge of Texas gun laws; my one chance to shine on this forum).

AlaskanInTexas wrote:

sjfcontrol wrote:Also, I have verified with my Financial Planners, that the no-tax threshold for the Tx Franchise tax is $1M this year. I've asked for more info from my accountant, but believe this to be correct.

The threshold for reports filed in 2011 (based on 2010 activity) is $1 million. For reports filed in 2012 (based on 2011 activity) the threshold drops to $600,000 (my knowledge of Texas tax laws > my knowledge of Texas gun laws; my one chance to shine on this forum).

You are correct: http://www.tklaw.com/resources/document ... nreath.pdf" onclick="window.open(this.href);return false;

KaiserB wrote:

AlaskanInTexas wrote:

sjfcontrol wrote:Also, I have verified with my Financial Planners, that the no-tax threshold for the Tx Franchise tax is $1M this year. I've asked for more info from my accountant, but believe this to be correct.

The threshold for reports filed in 2011 (based on 2010 activity) is $1 million. For reports filed in 2012 (based on 2011 activity) the threshold drops to $600,000 (my knowledge of Texas tax laws > my knowledge of Texas gun laws; my one chance to shine on this forum).

You are correct: http://www.tklaw.com/resources/document ... nreath.pdf" onclick="window.open(this.href);return false;

Yep -- here's what my accountant had to say...

Here is a link to the full statute, but below that is the amended language.

http://www.statutes.legis.state.tx.us/D ... TX.171.htm" onclick="window.open(this.href);return false;


Text of subsection as amended by Acts 2009, 81st Leg., R.S., Ch. 286, Sec. 1


Text of subsection effective until December 31, 2011(d) A taxable entity is
not required to pay any tax and is not considered to owe any tax for a
period if:(1) the amount of tax computed for the taxable entity is less
than $1,000; or(2) the amount of the taxable entity's total revenue from
its entire business is less than or equal to $1 million or the amount
determined under Section 171.006 per 12-month period on which margin is
based.

Text of subsection as amended by Acts 2009, 81st Leg., R.S., Ch. 286, Sec. 2


Text of subsection effective on January 01, 2012(d) A taxable entity is not
required to pay any tax and is not considered to owe any tax for a period
if:(1) the amount of tax computed for the taxable entity is less than
$1,000; or(2) the amount of the taxable entity's total revenue from its
entire business is less than or equal to $600,000 or the amount determined
under Section 171.006 per 12-month period on which margin is based.

Best Regards,

What are good banks for a small business? Low/no fees are a big plus. $10-15/month maybe small change for a business with a quarter million in annual revenue, but are a big bite for a side business with $2000 annual revenue.