Sales Tax at Craft Fairs: How do you handle it?

by Subha Balagopal.
(United States)

I am just starting out with selling my jewelry. It’s really a hobby at this time and I’ve not set up a company.

I will be selling handmade jewelry at a craft fair and wanted to know how I should go about finding about sales taxes, etc.

Thanks!

Subha Balagopal
Do Good Beads

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  • Lynda says:

    Hi, Subha,
    Different states have different requirements for selling products. Do investigate the requirements. Local craft fair managers might steer you in the right direction for where to go or web sites with info in your area and whether a permit or license is required to sell at a fair.
    I do have a business and choose to include tax in my pricing. Just easier for me. State sales tax and state and federal income taxes are paid.

  • Maria says:

    Hier in Nederland is het niet mogelijk om belasting terug te krijgen als je geen bedrijf bent,dus geen BTW teruggaaf.Ikzelf ben juist wel een bedrijf gestart ( webshop) om de BTW teruggaaf,met dat geld kan ik weer investeren in me kralen enz.Wat ik verkoop geef ik op en betaal de BTW erover.Voordeel van een eigen bedrijfje ,dat je bij elke groothandel kan inkopen.Verkoop ik niets dan hoef ik het ook geen BTW te betalen,maar krijg wel mijn BTW terug van wat ik inkoop.Alle kleine beetjes helpen als je geen geld heb zoals ik.Succes

    Google Translate, Dutch to English:

    Here in the Netherlands it is not possible to load back if you are not a business, not a VAT refund. I myself have just started a company (shop) to the VAT refund, with that money I can invest again in my beads etc. What I sell I give up and pay the tax on it. Advantage of a small business, you may at any wholesale purchases. I sell nothing but I do it to avoid paying VAT, but do get my tax back from what I purchase. Every little bit helps when you have no money like me. success

  • Most show organizers has a sales tax form for you to file your sales tax under their number. I have my own number (KS) and build the sales tax into my prices – always rounding up to the next dollar. It makes it easier to calculate prices and change when busy with multiple customers. Plus, no weight of the coins to deal with.

  • Rain says:

    In California, you need a seller’s permit, but not necessarily a business license, in order to sell your jewelry. Many shows require you to provide a copy of the permit and often, the Board of Equalization (who deals with sales tax) does show up at events to check permits. You HAVE to have one in California and I suspect that’s the case with most states. The BOE (or equivalent state agency) will give you all the information you need about collecting sales tax and paying it.

    On the plus side, it’s a very quick procedure to get a seller’s permit – it took me 30 minutes from door-to-door – AND it means you can buy wholesale.

    Good luck!

  • Jeanine says:

    I’ll answer your question wearing my CPA hat. Regardless of how your business is set up (that will matter for income tax purposes), you need to Google the name of your state and “sales tax”. That should bring up a link to your state. However, you need to consider all the venues where you will be selling jewelry. For example, I live in New York, and have a registered sales tax ID for any sales I make within the state. If I sell something online and mail it to another state, I do not collect sales tax on that sale. If I do a craft show in Massachusetts, I need to abide by their sales tax laws.

    Finally, I would be wary of filing sales tax returns under another’s number. The best place to get the answer for this kind of question is a Certified Public Accountant.

  • Patricia Murray says:

    Absolutely, in Colorado, you need a sales tax license. I got mine from the Colorado Dept. of Revenue and it wasn’t very expensive and it’s good for two years., Also, some of the cities around Denver are home rule cities, so you need a license to sell in those cities. Also, in Colorado, you need to register your business name, but first you need to do a search to make sure no one else is using that name. Many times, someone from the Dept. of Revenue will come around to make sure you have a sales tax license, so it’s better to be safe than sorry.

    You should contact the person in charge of the craft fair about where to get your license and how much sales tax you need to charge. So my advice is get your license on your own. I wouldn’t count on the person in charge of the fair to do it for you, because you never know if they know what their doing. I’ve actually had to tell some fairs that they need to make sure everyone has a license. Also, in Colorado, you are required to have your license out & showing in your booth.

    Lastly, I do taxes and any money you make from the fair has to be reported on your Federal Taxes as Hobby income. If your business is profitable for 3 out of 5 years, then you can file as a small business, until then you are considered a hobby and you can deduct your losses, but only up to the amount of income your made and then that is subject to a 2% of your adjusted income limit.

    I wish you lots of success at your fair and hope this info helps.

  • Valerie says:

    I add the sales tax amount as part of my pricing formula, then round off prices to the nearest dollar so customers don’t have to deal with change. I know that sales tax is a specific percentage of my sales price which makes it easy to file and pay the required taxes.

  • Carol Wilson says:

    In Texas, you definitely need to collect and report state sales tax. Most cities also have a sales tax. Contact the State Comptroller’s Office for information. If you’re a very small business like I am, you only have to file once a year.

  • Absolutely check with your state’s department of assessment and taxation. Be sure to read their literature carefully. In my state, you can include the sales tax in the price if you want, but you are required to disclose what portion is sales tax to the customers.

  • Subha says:

    Thank you, everyone, for your comments and suggestions. This is very helpful.

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