That's kinda dishonest don't ya think???

I did it when I used to live in another state. I was also doing goldsmithing at the time so for me, it was really practical.

Now I did pay sales tax on all my purchases which were for my own personal use (and this could be a bit of a headache as there are forms and calculations): if it was something I sold to a shop for them to resale then, clearly, I paid no sales tax.

I think I understand squirrelheaven's point about it being dishonest, but to my way of thinking that's only if you're not paying taxes on it. The furniture / fabric / wallcovering, etc. source sells it to designers for the designers to to mark-up and charge sales tax -- the designer's mark-up is to cover their professional time, expertise, business costs, etc. I was happy to use my own time, expertise and eat my own business costs (well, not that I had any!) but still pay sales tax. To me, not a problem!

Fer real.

Chicory -- no comprende ??

It costs money to incorporate. For instance, the filing fee alone for a Certificate of Formation/For-Profit Corporation in the State of Texas is $300. If you incorporate (at least in my state), you're subject to filing tax returns and possibly other reports as well, so incorporating isn't exactly something you'd want to consider just to be able to take advantage of decorating discounts!

I guess it can be done, you would be working the system, pretending you are a real decorator with real customers; the suppliers would ask you to open accounts, you can't just walk in a showroom or just place a call and buy.
You can't pay them with a visa card, you'd need a business bank account and cheques. Business cards are easy to acquire.

I'm not sure how suspicious the government becomes if you never remit any tax, in other words, you incorporate as a decorator so you become a retailer, but you never remit any tax, not sell anything. They probably don't bother checking.
Unless you charged yourself and your family tax, but wholesale price, no profit.

I have a retail business so I know how it works; I'm just playing devil's advocate here on your question.

Hi, I live in Illinois and had a business some time back. The wholesalers insisted on copies of both my sales tax numbers and business license before they would give me an I.D card and let me on the sales floors.

I believe there are services that will buy for you for a fairly reasonable fee ($200 or so). Seems much easier to do that or to ask around and see if you know someone who could help you out.

We have a relative who used to live near High Point, NC and she had access to all the showrooms. My mother would shop in our stores up in NJ/NYC, call her with item numbers, and the relative would go into the showrooms and order what my mother wanted.

It's just not ethical, really. I'm sure some people do it, but can you imagine if lots and lots of people started doing that? And then they'd start ordering things for their friends and family. Businesses would need to start charging more for the overhead expenses incurred in policing the whole arena. Retailers, decorators, and design businesses would charge even more to make up for losses and maintain their profit levels. The design centers and wholesalers really don't want to deal with the hassles involved with non-professionals in the field.

It's a scam. Either you're in the design business or you're not.

Pretty much, just about any time there's a discussion of the difference between interior designers & interior decorators, things get ugly, with the designers with degrees and/or certification calling decorators poseurs and the amateurs calling those who spent a bundle of money and years of theri lives getting educated arrogant snobs.

I happen to have an interior design degree, but I still refer to myself as an interior decorator, because I don't look down on the term as a condescending codeword for 'amateur'.

Even so, I gotta say that this kind of thing is what prompted decorators with real training to lobby for legislation that would legally separate themselves from untrained wannabees in the first place.

I know how to change the oil & sparkplugs, I once rebuilt & reinstalled the starter of a 1947 Jeep all by myself and my grandfather had an auto parts store, so I grew up liking the smell of machine oil. That doesn't mean I'd call myself a mechanic just to get a discount on wiper blades.

I couldn't do that. (Then again, I was brought as a guilty Catholic.)

I was seconding your minor outrage there, Squirrel. : D

KK--I KNEW there was something I liked about you -- me too on the guilty Catholic!!!

Sorry off topic!!

As others have said, there are tax implications, separate business filings that have to happen (quarterly here in Illinois), costs of incorporation, etc. Also, if you are talking about incorporation, you must have officers of the corporation, legal documents drawn to create the articles of incorporation.

I had a silk floral design business that I established when I was doing craft shows and selling at Coomer's Craft Mall, so I could buy wholesale. You have to pay taxes on purchases, etc. Also, wholesalers record sales to your tax ID number and the tax obligations are yours, penalties and all if you don't file on time.

You don't just 'sign up' as a decorator and get access.

As to ethical - well, it depends on whether down the line you really expect to work for others, or you think you are just getting yourself a deal.

I think she just means get a business license, sole proprietorship -- for the purpose of appearing to be selling decorating and design services -- in order to get merchandise, and special restricted to-the-trade merchandise -- all at wholesale prices so she doesn't have to pay retail or fees for service. Like the rest of us.

It's still going to cost her money to form a sole proprietorship, and she'll still be subjected to certain tax implications. Anytime you "incorporate" in any way, shape, or form, there will be legal consequences to some degree.

Even as a sole proprietorship, at least in Illinois, when you buy at wholesale you are not charged tax on the items. But, you are expected to file quarterly returns, and any items that you purchase for personal use must be reported as such, and sales tax is then charged. You also have to pay taxes on the items you purchase and use in the business. And as I said, the businesses that sell to you at wholesale record those sales with your ID number so that there is a trail of purchases made for which you were not charged taxes, etc. You will likely also have to file a Schedule C with your federal tax return.

Oh, I don't mean there's no business overhead (I have one), just that she's not really thinking of forming a corporation -- with a BOD, legal team, and all :)

I'd think a business sitting out there oddly like that, probably doing things, or shopping, in a non-customary way -- on anyone's books, whether it be the IRS or a wholesaler -- would set a few red flags off that it's not a 'legit' operation.

I really don't think setting up a small business (sp) for her intended purpose would be all that expensive or complicated to maintain, keep track of purchases, etc. My point was, following the simple, underlying thought process and intent, is that it's simply just not honest.

It's not a legit business. It's a front -- a fraudulent, contrived scam! :)

"scam: a fraudulent or deceptive act or operation"

Yes, but why did Buffy ask? Was she planning to engage in this deceptive, sinful behavior or is she a plant??! : D A government plant, in the decorating branch of the FBI...

Maybe trying to suss out the dark and seedy underbelly of the Garden Web, That Home Site, Home Decorating Forum (?).

Heh.

No big deal, it just seems like an elaborate path to getting discounts on home decor products.

Oh, and from the IRS standpoint, buying wholesale, after getting incorporated... they don't care. As long as you're not selling the stuff and keeping the money AND not paying taxes. As far as they're concerned, you're just really bad at math.

Am I right?

I don't know who would keep track of whether or not you're legit... I don't think there is a home decor branch of the FBI, at any rate.

I'm just being silly. I'm on drugs. Don't mind me.

Frankly, buffymichelle, if you are serious, you will need to pay a lawyer and accountant for their professional advice and assistence. If it was free, lots of people would be doing it - but it's costly. I'm not sure about the ethics. I also suspect that quality businesses may not want to waste their time with you because they are interested in decorators/designers that continue to bring in clients/repeat orders. As a home owner making personal choices you may be a asking too many questions and making too many requests that are not business-like. Of course I could be wrong and if you do go ahead I hope you post back your experiences.

Sky

Ok first...there is a legal question here and a "decorator" question so...let's separate them!

First, state and federal laws vary so the information I'm going to provide is "general" except for the "Incorporation" portion of the answer.

Incorporation is the form of creating a new and separate entity for tax (and liability) reasons. When you incorporate you "create" a new "being" which has it's own requirements for tax filings (that can be quarterly, annually etc). You are required to file taxes for the coporation though just like you are required to file on your own SS# (the new corporation will receive it's own tax identification number just like you have a SS#). So, you can incorporate, and you can do it rather cheeply, but if you do so you must then file taxes on the corporation, period. Showing no business activity for a period of time will cause red flags with the IRS and cause you headaches far in excess of the headache of paying full price for a piece of fabric.

So then how do you get the "for the trade" without being in the trade? Well you could establish a trade name in your local county/municipality/parish. Many do NOT require a business license, but some do and will require that you file for this as well. But in some areas you can just pick a trade name (Donna's Den Decor) and go for it.

In my state I don't pay taxes so doing this is not in any way illeagel or unethical. The sellers of the items will decide if the want to do business with you, and frankly, they're making the items with a certain markup involved, which they will receive when you pay, so who are you hurting? They decide who they do business with.

Many will require that you have a DBA DDA (checking account) reflecting your business interests, and you can't just get this for a BS business. A bank will require all proper documentation for any business entity, including a DBA (trade name or Doing business as). They'll require you open a business account (more expensive). But again, it's an easy issue to get through since a DBA is enough to open the account and it won't earn interest (do not get an interest bearing account or you'll have to pay taxes on that).

So again, who are you hurting? Some invisible decorator who you haven't hired who might be able to make a profit on the item instead? You weren't going to use them anyhoo so what did they lose? You aren't cheating the seller since they sell at X price anyhoo, so...if you're not avoiding taxes (that's another issue entirely and something you DON"T want to get into) than you're not doing anything wrong, unethical etc. You're just buying at wholesale. Often times if you only buy one or two of an item you don't save much anyhoo...they sell on discount to the trade for multiple sales.

Many times though, if you contact the seller, they'll sell to you if they don't have a dealer locally. For instance I contacted a seller of acrylic furniture and asked for the local dealer. They didn't have one and then told me they'd sell to me at the dealer pricing since there wasn't one in town. Much easier than opening a checking account to decorate my dining room with!

By the way....I was able to purchase "to the trade" items by just being a design student so the sellers aren't "that" exclusive, they just don't want to deal with the BS that goes with retail work so you have to be prepared to deal a they wish, no dickering, no tax issues, etc.

chicoryflower~LOL!

igloochic~I'm curious as to how/if you had to "prove" you were a design student.

I haven't thought of doing this until a lady at an antique store asked me if I bought a lot from them - I don't buy a lot, but what I tend to buy is fairly expensive. Usually, if you know to ask, they give you 10% off anyway. The dealer I was making my largest purchase from that day does not give discounts to anyone but decorators/designers. I thought it was odd she asked me and told me I should think about getting a business license.

We already have 2 S Corps and an LLC. Could I just do it through one of those? I have no idea. I don't use interior designers or decorators but I do purchase nice things. It would be nice to get an extra discount so I'd have money left over to buy more nice things. lol

I was asked for my student ID Number and the school. Nothing more.

Allison, the only problem to using your existing businesses is paperwork, (and paying taxes if that's an issue for you in your state) but yes why not use one of those? I suppose if they're called "sarah's catering" or "bob's sump pumping" the businesses might ask how your curtains fit in the scheme...but really, again it's their choice to do business with you or not, so if it meets their criteria, and you don't mind the extra paperwork, heck that's the easiest way to go.

I know the S Corps are not subject to withholding aka not paying sales tax. We pay sales tax when we purchase office supplies, computers, etc.

I'll have to ask our accountant. I know I'm not interesting in creating/opening a "business." I've been over that with him before. Another bank account, tax prep fee, etc. I'm already connect to over 20 checking/saving/investment accounts between family business and taking care of my parents, sister and three college kids financials. I do not need more paperwork! lol

Thanks igloochic.

I doubt the government is interested either, unless taxes are being avoided or something along those lines. As long as they get their fees and taxes and you're not doing anything illegal or funding an Al Qaeda operation. I do think the design community cares, though. Moreover, those businesses don't want the hassles and overhead of dealing with non-professionals. They also have alliances with the designers and decorators who butter their daily bread.

Design clients are also supposed to be privy to exclusive materials and furnishings through these places -- those they won't find at their neighbor's house next week! and for less, at that. There is also a price to pay for that, which some people like to be able to do if they can.

I've heard some design centers have days they are open to the public. Now when actually purchasing things, one may need to find a professional to actually make all the arrangements and handle the business end. As in, it's a way to bring new business in. Although it probably just varies.

Some to-the-trade wholesalers, like plumbing supply stores, for example, now feel the heat from the big boxes and DIYs. So, some will let you buy from them and be competitive with the pricing. They don't advertise, because dealing with the general public is really not their chosen market and it can bring problems and overhead for them. They prefer dealing with professionals in the field and will tell you so.

If there are places you're interested in buying from, I'd just ask if they're interested in your business.

I love how the original poster never comes back and posts again - but the thread takes off on its own!

Good info, but sounds like way too much effort for some furniture discounts. I found I got the same furniture pricing as my decorator by buying through NC, and with the internet, fabric prices are fairly competitive to what a decorator can get.

I think the main benefit is the accessibility to certain designer type fabrics, accessories etc. that would be nice to be able to buy what's in the showrooms.

Hi, thanks all for your comments, criticism and feedback...Im amazed by how lively this forum is (started to read here after some on the Furniture Forum said go to Home Decorating, itÂs more active!!)

First off, there was no sinister intent :) on my part in asking this question. Let me also just clarify that in my state, there's no barrier to entry in starting up an "interior decorating" business. ("Interior designers", however, are subject to licensing requirements & I wish I had the $$ to hire one to do everything for us.)

Some background:

(1) The idea that prompted me to ask the question came this past spring when I was doing some initial forays into furniture shopping. When I asked the sales person questions, which I guess were very specific (plus combined with me carrying a portfolio with my plans, swatches, etc.!!), he thought I was a decorator & told me that their store provided an additional 10% discount.

(2) ItÂs frustrating to see something in a magazine that would really work in your room plans and is unique and special, to then find out the only way you can purchase it is to work through a designer. IÂm trying to do as much as I can DIY to save $$. For example, I bought a sewing machine and am relearning to sew to make custom window treatments, bedding, etc.

There were some comments also about sales tax, etc. We of course would have to pay sales tax on any purchases--DH is a CPA and the only way we would be able to *not* pay sales tax would be to say the items were for a show room. My living room or my sisterÂs of course wouldnÂt qualify as such!!

I'll be back later to give feedback on all of your great comments--took an "internet break" at work to see responses. Thanks a bunch,

Michelle

If you are interested in getting "to the trade only" fabric you see in a magazine, just go to your local upholstery shop (one that carries a wide variety of fabrics" and they can typically order it for you. They can also order samples of things they don't carry for you to view in person. You may be getting the retail price as opposed to the wholesale price, but you can still get those rarer items you only see in magazines. Plus some stores will give you a discount over the price marked in the back of the fabric book - just ask.

Hi, thanks jenny_from_the_block, that's what I've done. Re: fabrics so far--I've priced some fabrics and trim out at my local design center, they'll give about 20% discount off of retail on the stuff I need. Also:

* Local upholstery shop will give wholesale price on fabrics (to supplement or add to what I already have) if I order upholstery through them, not a bad deal except that the discounts on the pieces I'm thinking of are in the range of 25% to 33% off retail & believe that we can get similar quality items for less. DH, a great bargainer, can reasonably get 40-45% of MSRP at retail furniture store for similar items (but fabric would be marked up).

* Local retail furniture store will give just 15% off of the fabrics.

I have many terrific fabrics purchased from ebay--purchased gradually over the last 18 months as coordinating items from the fabric books come up for sale. Now need to supplement, especially the trim items. Trim is so expensive!!

There are a few more things I'm checking out besides the thought about a side business for interior decorating (will be meeting with our tax accountant next month and will decide then), they include:

* Going to NY Design Center for consultation on day open to public--thanks squirrelheaven for this suggestion.

* Consultation (about $250) with a local interior designer (have seen the portfolio & think this may be a good match) and see whether a reasonable mark-up on the list of items I provide (not just fabric, but lighting, rugs, etc.) could be agreed-upon. (I.e., designer wouldn't need to do any work beyond the hourly rate.)

* jeanninepc99 mentioned the service that can do this for you--yes I have the info on that. I'm not sure if that information can be posted here for others' reference, but a search on-line can easily find them.

Thanks & hope all of you in the Northeast are safe and warm,

Michelle

I think I'll be a nurse. : D

Hey, Chic, think big -- the docs get free drug samples :)

Yes, Squirrel, but the nurses have access. ; D ...with less education.

Then I won't mind living to be 120.

Different vendors have different requirements to get their trade discounts. Some require proof up the wazoo and others you just have to chat someone up a little bit to get the discount. I have my M.Arch degree and work for a licensed architect but am not yet licensed myself - I've been easily able to get trade discounts from some places just by asking if they discount to trade, but others require a license number and tax id and other paperwork and although my boss would not mind me using his info to sign the firm up for a trade relationship with a vendor for my personal use, sometimes the time required to do so is just not worth the discount. For example I've ordered a couple of pieces from rejuvenation lighting recently and they offer 10% off to trade but the $12 I would have saved was not worth the mound of documentation they required and the time to fill it all out so I didn't bother.

Also sometimes trade discounts are not as good as sales available to the general public and carry restrictions on them that sales to the general public do not. I get a 10% off trade discount at restoration hardware but only on full priced merchandise and once purchased, the item is not returnable. If I have a little patience I can generally do more like 20% off during one of their "events" and the trade discount is not worth it (though it is a nice little savings for a client who needs it now and wants to purchase thousands of dollars worth of merchandise).

As far as truly "designer" stuff, it's all out of my price range even with trade discounts. One day while chatting with our Ann Sacks rep about another project I inquired about using their trade discount for my own bathroom. I thought 20% off was pretty generous until I realized that 80% of $40/sf was still $32/sf and still way above the $2.07/sf I ended up paying for my floor tile. One can dream though. :D Yes, the cobbler's children have no shoes.

I also have gotten trade discounts through smaller companies just by mentioning what I do. The company who made my shower base gave me a nice discount on it and you can bet if I like it in my own home I will recommend it for use to clients if and when appropriate. One of these days I might actually find out. In that case though, the trade discount is sort of an incentive for the designer to get the word out about a specific product.

>>Yes, Squirrel, but the nurses have access. ; D ...with less education.That's true, Chicory -- You could probably sound like a nurse quite easily by just being a Mom :)

I am all for employee discounts, too. It is part of my retirement plan. I figure if I need a big ticket item like a car, I can get a PT job at the local car dealership as a bookkeeper or receptionist for awhile and get the discount (full disclosure, of course.)

That's another good way of looking at it, Kelly. You earn it.

Exactly! I was a secretary and I had a lot of rubber bands and paper clips saved up by the end of a year, I can tell you.