Do you collect sales tax when you sell your work?

[Parker Nicholson]

I have been accepted into my first juried show (stealth gloat) and was wondering about collecting sales tax (if?) I sell something. I am getting every kind of answer when I ask around and short of getting a CPA, thought I'd ask some of you here.

So:
Do you collect sales tax when you sell at a craft sale/art fair?
Do you collect sales tax from internet sales?
Do you collect sales tax if you sell from your home?

I've only been turning for 4 years, so I feel I'm just getting started - don't know if I want to turn this into some kind of big business!

[Henry C. Gernhardt, III]

As far as I know, here's the deal:

You are required to collect and remit applicable state/county/municipality sales tax when at a retail venue (store, show, etc). In other venues I've been to (amateur radio "hamfests"), I've seen the organizers distributing sales tax forms to the vendors.

If you are selling from your home, you are responsible for collecting and remitting applicable sales tax if your home is serving as the retail venue.

If you are selling on the internet, you are responsible for collecting and remitting applicable sales tax from purchasers within your state/county/municipality, and some other states. This is the "mail order" syndrome. Under most circumstances, if a seller sells to an out-of-state (/county/municipality) purchaser through mail-order or similar means, the purchaser is responsible (in many states) for declaring the applicable sales tax and remitting it with their tax return. As stated earlier, however, there may be some states which require the seller to collect and remit the applicable tax.

My suggestions: When you're at a craft sale/art fair, ask the organizer(s) how you should handle sales tax. When selling from your house, collect sales tax and remit appropriately (Kentucky requires quarterly sales/use tax returns for businesses). For internet (or mail-order) sales, do a little research just to keep safe.

Hope it helps!

[John Timberlake]

Many of the show that I have been involved with actually require a copy of the vendor's license before you can participate. I believe you will need one and collect/remit sales tax to be legal. Here, it takes about 30 days to get the license.

[Bill Grumbine]

I am in PA, and the state requires me to collect state sales tax for anything I sell here. Other states would like me to collect sales tax and send it in to them as well, but as far as I am concerned, they can go pound sand before they get me to do that. I refuse to do shows in the People's Republic of New Jersey because they have polizei who come around and confiscate entire booths if the proper licenses have not been obtained.

I will be selling DVDs at the AAW symposium in KY, and it looks like I am going to have to fill out a form there since I will be physically in the state, but it is not worth the legal problems the state can bring to bear on little ole me if I try to evade it. And they know it. They use tax money to pay people to go around and make sure people are paying taxes. It really grinds me that the state (any state) makes me an unpaid administrator of their tax collection, but there is no way around it, just like there was no way around it when the Staatspolizei pulled me over a few weeks ago and demanded to see my papers under the guise of a "safety check". I could have complained about the blatant violation of my constitutional rights, but then I would have been pulled over off the road and searched through every single item in my truck, and they know I don't have the time or desire to go through that. And of course, they would be sure to find something wrong to justify their search, even if there was nothing wrong. :mad: :mad: :mad: :mad:

But, if you are going to do business, you need a sales tax license, and you need to collect it, or some worthy soul will eventually rat you out for not paying "your fair share".

Bill

[tod evans]

bill, i have a new and profound respect for you! tod

[Jamie Buxton]

Several posters have said that you are required to collect sales tax. I think that is not exactly true. You are required to report sales, and to pay taxes on those sales. However, you are not required to collect said tax. You could pay it out of your own pocket if you want to. That may be what is happening at those "no sales tax" sales.

If you do collect sales tax from customers, you have to buy a license from the state. That is, you must pay the gummint so that you can collect money to send to the gummint.

[Bernie Weishapl]

In the state of Kansas if you sell you will collect sales tax. In fact sales and service requires you to collect sales tax. So even if it is fixing or repairing something you will collect tax. So I just got a sales tax license and if you don't collect any you just say none when it is time to pay.

[Reed Gray]

All of the shows that I do inform the vendors about which licenses, and taxes we are responsible for. Fortunately, here in Oregon, we don't have sales tax, but have other taxes that make up for it. In California, they require a 'resale' license. In Washington, they require a quarterly report. At a show in Boise, they collect the tax at the show. Everyone does it different. I don't like to figure the pennies, so I mark things up a bit to cover the tax amount, to an even dollar amount. That is easiest. If you do retail sales from your home, if the state you live in charges sales tax, you are responsible for paying whatever % on every dollar of your sales. I don't know about internet sales.
robo hippy

[Reed Gray]

All of the shows that I do inform the vendors about which licenses, and taxes we are responsible for. Fortunately, here in Oregon, we don't have sales tax, but have other taxes that make up for it. In California, they require a 'resale' license. In Washington, they require a quarterly report, and Seattle requires atemporary city business license. At a show in Boise, they collect the tax at the show. Everyone does it different. I don't like to figure the pennies, so I mark things up a bit to cover the tax amount, to an even dollar amount. That is easiest. If you do retail sales from your home, if the state you live in charges sales tax, you are responsible for paying whatever % on every dollar of your sales. I don't know about internet sales.
robo hippy

[Reed Gray]

All of the shows that I do inform the vendors about which licenses, and taxes we are responsible for. Fortunately, here in Oregon, we don't have sales tax, but have other taxes that make up for it. In California, they require a 'resale' license which is good for 90 days (I think). In Washington, they require a quarterly report, and Seattle requiresm a temporary city business license. At a show in Boise, they collect the tax at the show. Everyone does it different. I don't like to figure the pennies, so I mark things up a bit to cover the tax amount, to an even dollar amount. That is easiest. If you do retail sales from your home, and the state you live in charges sales tax, you are responsible for paying whatever % on every dollar of your sales. I don't know about internet sales. Most customers at the shows will ask if the price includes tax, or if they owe tax. You sure don't want that cost to come out of your pocket. It seems like the Infernal Revenue Service takes too much anyway.
robo hippy

[Reed Gray]

All of the shows that I do inform the vendors about which licenses, and taxes we are responsible for. You have to show 'proof' before you can set up.Fortunately, here in Oregon, we don't have sales tax, but have other taxes that make up for it. In California, they require a 'resale' license which is good for 90 days (I think). In Washington, they require a quarterly report, and Seattle requiresm a temporary city business license. At a show in Boise, they collect the tax at the show. Everyone does it different. I don't like to figure the pennies, so I mark things up a bit to cover the tax amount, to an even dollar amount. That is easiest. If you do retail sales from your home, and the state you live in charges sales tax, you are responsible for paying whatever % on every dollar of your sales. I don't know about internet sales. Most customers at the shows will ask if the price includes tax, or if they owe tax. You sure don't want that cost to come out of your pocket. It seems like the Infernal Revenue Service takes too much anyway.
robo hippy

[Reed Gray]

Sorry about that, the old alarm cat woke me up at 5 am this morning, and I couldn't go back to sleep. I am only half here.
robo hippy

[Rich Stewart]

Haha Bill. You know about Jersey, eh? Don't you DARE let them catch you;

A.) Making a little money
B.) Having a little fun

If they catch you doing either of the two they will:

A.) Tax it til you can't afford to do it anymore
B.) Make a law against it

Tax lawyers and Accountants are the two best professions in Jersey because NOBODY can figure out the tax laws without them. Even if you have just a small business you will have to have a tax lawyer and an accountant working for you.

How did I get stuck in this good for nothing state?

[Joe Melton]

Guys haven't addressed one question I had when I read your questions: Do you tack on the sales tax or do you consider it part of your price? In other words, if a person buys a bowl for $100, do you charge, and write a receipt for, $107.40 (7.4% tax here), or do you simply accept $100 from her and then pay the 7.4% tax yourself?
I've done only one craft show, and forms were distributed to the sellers some time during the show. The form asked for total sales. Didn't even have a place for the vendor's name! After the show, the sellers queued up at a table where a woman calculated their tax based on the total sales they listed. The queue was pretty short.
I think the whole craft show taxation system here in Colorado is sort of an honor system. Obviously, from what others have posted, the systems vary by state.
What I have seen on ebay has led me to believe that you only pay tax on internet sales to persons in your own state. For example, a Colorado seller might state "Colorado residents add 2.9% tax." Am I wrong on this?
Joe

[Gary Max]

Joe that part is up to you. The best set ups at a show that I have seen use a cash register which adds the sales tax on the end plus at the end of the day it will give you the break down so you can give the state their part.
Trust the post that tell you that if you sell it you must pay taxs---most states no no sence of humor about sales tax.
Also keep good records just in case you need them. The only thing worse than paying tax is paying it twice.

[Bill Grumbine]

---most states no no sence of humor about sales tax.
Also keep good records just in case you need them.


Here's a no sense of humor - or no sense at all - story. I know this is true because it happened to me. I was starting up my business in the early part of 1993, and filed my papers to collect sales tax. They got lost, and I had to refile them. In the meantime, I was collecting the tax because I was going to have to pay it. Eventually I got a letter from the state. It was over a page long, but it boiled down to the following two statements:

1. I was refused a sales tax license because I had collected sales tax which I had not paid to the state.

2. I could not get the license until I paid the taxes, but I needed the license to pay them! Oh yeah, this was almost in one sentence from the State itself!

I called and talked to a woman who actually sounded like she knew what she was talking about. She told me to send in my money to her attention, and that she would take care of everything. Lo and behold, a few weeks later I got my sales tax license.

You might think that this story has a happy ending, but it does not. :mad: About six months later, I got a letter telling me I WAS BEING FINED BY THE STATE for collecting taxes and not paying them. I also had to pay INTEREST on the taxes I "witheld". If it had not been for a relatively small amount, I would have fought it, but it just wasn't worth the aggravation. So, I bent over, grabbed my ankles, and paid the fine and interest. I would say more about what I think, but I have not yet had a post deleted here. I don't want to start now.

Bill

[Steve Clardy]

Ok.
In Missouri, if you are in business, you need a tax#, and collect it, pay it in.
If not in business, don't collect it.

Arkansas. I attended craft shows for a few years down there.
What they do is [the sponsor of the craft shows] is provide you with a form to fill out as to your sales amount, and the current tax you are to charge, collected when you make a sale.
Then at the end, you turn that over to the sponsor, with the tax money you collected. They in turn pay that to the state of Arkansas.

So always check with the persons that actually put the show on.

[Parker Nicholson]

Steve C.,
You are right as I called the office of the Missouri Sec. of State today.
I had to register my business name (which I did) and now I have to apply for a MO. tax number (which I will next week). The registration was suprisingly simple and quick and I was able to fill out the application and pay the fee online. I can do this with the MO tax ID form as well. I will also have to do this in Kansas (ugh!). I will need to fill out 24 pages of forms to get all this done - just to sell bowls at an art fair!:mad:
Bill Grumbine, I see where you're coming from!

Makes me wonder what I'm getting myself into :eek:

[Steve Clardy]

Yes. I had to put a deposit down. $100.00 if I remember right.
Been a while back, 1993 I think.
If you ever turn your # back in, that deposit will be returned.
Yes. Missouri is pretty easy with the forms, procedures.

Edit. 24 pages in KS? Wow. Them buggers

[Parker Nicholson]

Steve,
Actually it's 24 pages for the whole thing (both states). Thank goodness.

[Gary Max]

Or a friend who shut down his shop and went out and got a job. He forgot to tell the state Tax folks. A year later he gets a BIG tax bill where they estimated what they thought he should of paid--plus interest---plus a fine.
He fought this for another year---still paying more fines and interest. He finally just broke down and paid them---several thousand dollars. This did not happen in Kentucky.

[Anthony Yakonick]

Guys haven't addressed one question I had when I read your questions: Do you tack on the sales tax or do you consider it part of your price? In other words, if a person buys a bowl for $100, do you charge, and write a receipt for, $107.40 (7.4% tax here), or do you simply accept $100 from her and then pay the 7.4% tax yourself?
I've done only one craft show, and forms were distributed to the sellers some time during the show. The form asked for total sales. Didn't even have a place for the vendor's name! After the show, the sellers queued up at a table where a woman calculated their tax based on the total sales they listed. The queue was pretty short.
I think the whole craft show taxation system here in Colorado is sort of an honor system. Obviously, from what others have posted, the systems vary by state.
What I have seen on ebay has led me to believe that you only pay tax on internet sales to persons in your own state. For example, a Colorado seller might state "Colorado residents add 2.9% tax." Am I wrong on this?
Joe

In PA and NJ you can't "include" tax it's $100 plus tax, you can play with the numbers to make it come out to $100 but it should be $XXX plus tax. Now if you're taking a check or Visa you keep it right,but if someone hands you 5 $20 bills;) I have never had a problem with a customer about taxes, if someone can afford one of my useless turnings the tax is not a problem.

Bill G, I've been checked by the taxman in PA, Philly can be a problem with all the city BS!

[Dennis Peacock]

I don't collect nor charge a sales tax on ANYTHING I do. The gumment gets enough already and do NOT get me started on THAT subject. CASH works real well around these parts. ;)

Remember the Boston Tea Party? No More Taxes!!!!!!