Craft Fairs and Sales Tax Help Needed!

[lumoscandles]

So I just signed up for my first craft fair in October, and I need some help/advice!

 

-I have only sold items on Etsy before, which I do not charge sales tax for, since almost all of my orders are out of state. If I sell items at a craft show, do I need to charge sales tax? (I am selling out of Colorado)

-I do not have a registered business or sales tax license yet. Do I need to/should I get one for this?

-Also, Etsy does not provide a tax form unless you make a certain amount in a year, and I have never made very much money on Etsy until now. Does anyone have any advice on how to handle taxes with Etsy? Last year was the first time I made over $1000 so I never worried about it before but now that my business is growing so much, I don't know what to do!

 

Please help! I don't want to get in trouble with the IRS or end up owing a ton of money when tax season comes lol! Thanks!

Edited August 14, 2017 by lumoscandles

[Jcandleattic]

Yes, you should get a business license to do business. You can go to the Colorado state's website and get some answers, or call the department of revenue and they will help you. It's been so many years since I first set up, I can't remember how I did it, and now all I do is renew every year. 

I'm surprised the IRS hasn't already sent you a letter if you have sold over $1k of merchandise without claiming it. 

 

Where in CO will you be vending in October? 

I do 2 shows here in Oct and am wondering if I'll see you - there are so many around the state though, we'll probably be at different venues... 

[lumoscandles]

I'll have a table at the Mayhem Market in Lakewood. It's sort of a specialty market catering to punk/metal/rockabilly sort of scene. They found me on Etsy and invited me to join. The vendor fee is only $39 for a 6 foot table so I figured it's worth a shot since the fee is so low! I'd only have to sell about 3 or 4 items to get my money back for the fee so that seems reasonable for my first try at something like this.

[Jcandleattic]

30 minutes ago, lumoscandles said:

I'll have a table at the Mayhem Market in Lakewood. It's sort of a specialty market catering to punk/metal/rockabilly sort of scene. They found me on Etsy and invited me to join. The vendor fee is only $39 for a 6 foot table so I figured it's worth a shot since the fee is so low! I'd only have to sell about 3 or 4 items to get my money back for the fee so that seems reasonable for my first try at something like this.

Good luck. I'll be up in the Commerce City/Henderson area for both of mine. One is at a church, and the other is at the Adams County Fairgrounds in Henderson. 

[Candybee]

I live in Virginia and went through the VA Dept of Taxation to get my biz registered for a tax ID. It doesn't cost anything and I did it on line and could print out the document right away. I also download the sales and use tax document I need to file every quarter to report my sales and pay my tax. I do it all online and pay it online as well. Easy peasy.

 

For Virginia I believe it is $800 earnings or more when you have to report it. I've gone way beyond that so yes I have to pay my sales tax. Its just easy to do everything online and get it done quickly and easily.

 

If I file late its a $10 penalty plus interest.

[lumoscandles]

I have a few more questions. I'm going to be ordering a card reader for payments, but I'm wondering what to do for cash payments. How much cash/change do you bring? How do you generate receipts/record purchases for cash orders? And how do you calculate the sales tax? Do you calculate it manually or just include it in the price of the item? Thanks!

[Jcandleattic]

1 minute ago, lumoscandles said:

I have a few more questions. I'm going to be ordering a card reader for payments, but I'm wondering what to do for cash payments. How much cash/change do you bring? How do you generate receipts/record purchases for cash orders? And how do you calculate the sales tax? Do you calculate it manually or just include it in the price of the item? Thanks!

I have found at shows, most people don't want/care about receipts. I use Sqare, and you can record your purchase in there, and it gives you the option of sending them a receipt even for cash sales - you just need to have them enter their email or text info. 

I set my reader to calculate tax for me, and it gives you the option of either tax added to the sale, or included in the purchase price. You just need to pick the one you want. 

If you have it included in the purchase price, at the end of the day/show you can run a tax report and it will show you how much tax you collected. 

I bring $200 worth of $10's, $5's, and $1's and maybe a few $20's, because inevitably one of my first customers of the day will pay with a $50 or $100 for a $5-$10 purchase. Happens EVERY TIME!! 

[lumoscandles]

Thank you!

[birdcharm]

For your combined Etsy and show sales that you are going to claim on your federal taxes this year, you'll be keeping a record of all of your sales to claim as income.  This will be the gross amount you receive, which may include your shipping charges, sales tax, etc.  Then, when you do your taxes, you will refer to the other records you have kept for shipping charges you paid, sales tax you paid to your state, as well as a variety of other things that you've kept track of -- your supplies (minus anything you've taken out for personal use), your packaging, your labeling, your costs for the show, etc. -- and those costs will be deducted from the total amount you've collected. 

 

Right now, I'd say to just start keeping records of everything and you'll get to the rest of it later, but getting your state permit is something you'll want to do and in doing so, you'll also learn how your state forms work for collecting and paying the sales tax you've collected.  Good for you in your blossoming business!