Articles

Handling Sales Tax at Fairs and Festivals

September 2010
Taxes at Fairs, Festivals, Flea Markets, and Craft Shows

Image courtesy: graur razvan ionut / FreeDigitalPhotos.netImage courtesy: graur razvan ionut / FreeDigitalPhotos.net

As a crafter, you may not be the most business-minded person in the world. However, if you’re going to succeed in the world of craft fairs and festivals, you’ve got to think like a business person! One of the ways you do that is by learning about sales tax before you hit an event. Here are the things you need to know about handling sales tax at fairs and festivals.

1. You have to pay it! No matter whether you pay sales tax at the show or later when you file your state taxes, you definitely have to pay the taxes on what you make. It’s actually illegal not to pay state sales taxes! From a business perspective, paying this extra money can actually make sense. It allows you to legitimize your business and to use that income from it when you’re looking for a mortgage, car loan, or similar item.

2. It’s different in different states. You probably already know that different states have different sales tax rates. Before you travel to a state, you need to know not only what its sales tax rate is but also how and when you pay sales taxes. In Illinois, for example, you have to register with the state before you can sell at a fair or festival. You may have to pay taxes when you’re actually at that festival, and sometimes the state will send representatives to collect the money at the end of each day.

It won’t be like this with all states, though, so make sure you know the rules and regulations of both the state you live in and the state you sell in. If you’re going to be traveling a lot during the fair and festival season, it can be a good idea to do all this research well ahead of time so you’re prepared.

States - Where do you do business?

  • States with no sales tax: Delaware, Montana, New Hampshire, Oregon
  • States with no sales tax but some municipalities levy taxes: Alaska
  • States which have a state-wide sales tax:  Connecticut, Idaho, Indiana, Kentucky, Massachusetts, Maryland, Maine, Michigan, Mississippi, New Jersey, Rhode Island, Virginia, Washington, West Virginia
  • States which have a state-wide sales tax as well as county taxes: Florida, Hawaii*, Nevada, North Carolina, Ohio, Wisconsin, Wyoming.
  • States with a state-wide sales tax as well as county and municipality taxes: Alabama, Arizona, Arkansas, California, Colorado, Georgia, Illinois, Iowa, Kansas, Louisiana, Minnesota, Missouri, Nebraska, New Mexico, New York, North Dakota, Oklahoma, Pennsylvania, South Carolina, South Dakota, Tennessee, Texas, Utah, Vermont.

 

* Hawaii does not have a sales tax; instead, it has the general excise tax, which is assessed on all business activities.

3. Decide whether you want to figure it in or not. Sometimes at a festival when you’re processing lots of orders quickly, it’s easier to have sales tax already figured into your prices. This does, though, require you to set your price tags a bit higher. If you’re afraid that this will turn customers off, price your items according to what you’ll make off them. To figure sales tax quickly, keep a chart handy of the tax you need to add to each item according to its price.

Disclaimer: Please visit state tax websites to check for updates if any.

 

 

Comments

I’m a vendor and have a tax ID# for the state I reside in.  I want to do a craft show in a different state.  Do I need a tax ID# for the state of Ga.?  Thank-you

By mary on December 15, 2015

The answer is yes. For each state in which you perform sales (with a few exceptions) you must pay sales tax. In order to pay sales tax in a particular state, you must register your sole proprietership or LLC with the Department of Revenue for that state - which includes obtaining a tax ID number for that state.  All the best in artistic success! Amy Atzel

By Amy Atzel on July 8, 2016

I set up in the Centenial Craft Fair in Franklin Tn. and lost my tax papers to send in. Can I pay these on line with a credit card.
Thanks!
Cindy

By Cindy Pelkey Simple Pleasures Stitchery on December 2, 2016

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