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ScrollSaw Information and Resources #36: ETSY - TAXES how to do them

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Blog entry by jerrells posted 735 days ago 1210 reads 0 times favorited 5 comments Add to Favorites Watch
« Part 35: Wood Gloat Part 36 of ScrollSaw Information and Resources series Part 37: Exploring Options ???? »

I have considered for some time starting an ETSY site and selling my product there. However after I downloaded that ESTY sales manuel and read it the section on SALES TAX frightens the STUFF out of me. It sounds like you have got to keep track of every sale you make and send a tax check to every little taxing authority in the US. This may sound as over kill however that is the way I read it. All my CPA will tell me (for FREE0 is if you owe a tax you have better pay it. Now there has got to be a better way than that. I mean it sounds so simple, post some products for a small fee, wait for the sale, and pay a small commission. If I had this tax stuff figured out I would be there in a heart beat.

Do any of you out there have advice before the TAX MAN cometh.

Thanks

-- Just learning the craft my Lord and Savior Jesus Christ practiced.



5 comments so far

View Keith Fenton's profile

Keith Fenton

310 posts in 1517 days


#1 posted 735 days ago

I believe you only have to do that for sales in the state your business is operating in. I’m sure somebody who knows more will come along and chime in.

-- Scroll saw patterns @ http://www.sheilalandrydesigns.com

View Sheila Landry (scrollgirl)'s profile (online now)

Sheila Landry (scrollgirl)

7470 posts in 1517 days


#2 posted 735 days ago

Boy Jerrell – I am with you! I HATE tax stuff! Even though I live here in Canada, my business is based in the USA, where it was when I moved here. My accountant here told me she thought I would be better off leaving it there in the states because the majority of my customers are US. Tax laws are very complicated and I think this is one time when you would be best to consult a good accountant who has experience in this type of business. I wouldn’t want to advise you anything but that in case I am wrong, and I am sure that a lot of others feel the same. Please let us know what you find out and good luck. :)

Sheila

-- Contributing Editor, Creative Woodworks and Crafts Magazine, If you like reading my blog, come visit at Sheila Landry Designs http://www.sheilalandrydesigns.com "Knowledge is Power"

View tyskkvinna's profile

tyskkvinna

1308 posts in 1583 days


#3 posted 735 days ago

If you have a CPA, ask him. :) The general consensus is that you only collect tax for the state you live in and you just keep track of that and send it in once a month. To be honest, it’s likely to be pretty rare (at least at first) unless your shop flies off the shelves (most Etsy shops do not).

-- Lis - Michigan - http://www.missmooseart.com - https://www.etsy.com/people/lisbokt

View Sheila Landry (scrollgirl)'s profile (online now)

Sheila Landry (scrollgirl)

7470 posts in 1517 days


#4 posted 735 days ago

I am with Lis. I do file annually with the State of Illinois because there is such a small amount of customers of mine that reside there. I used to do it monthly, but they assess your account periodically and I suppose my sales were small enough where I only have to do it annually. That’s why when you order on my site and give an Illinois address, you are charged sales tax. The rest of the customers are not, and I don’t collect sales taxes from them.

If you accountant won’t even tell you a couple of simple things without charging you, perhaps you need to check and get a new one. Many offer free consults and if they do your taxes, they help you out all year with any simple questions you may have (as they should!)

Sheila

-- Contributing Editor, Creative Woodworks and Crafts Magazine, If you like reading my blog, come visit at Sheila Landry Designs http://www.sheilalandrydesigns.com "Knowledge is Power"

View HalDougherty's profile

HalDougherty

1820 posts in 1834 days


#5 posted 735 days ago

I’m sure this is a topic everyone will read and have an interest in. I’m in the North East corner of Tennessee and my woodworking operation is part of a farm based enterprise. Tennessee has a great attitude tax wise toward farmers. Here is a link to a document on the Tennessee state website regarding sales & use taxes on agricultural products and crafts made from home grown products.

http://www.state.tn.us/revenue/taxguides/agricultural.pdf

I grow over 1/2 the trees I use to make lumber and I use the lumber to make my crafts. (gunstocks and furniture) I pay sales tax on the equipment and supplies so I don’t need a certificate of exemption and I am not required to collect sales tax. Search Google for sales tax information in your state. I can put up a roadside stand on my property (retail store) without collecting tax or having a business license as long as more than 50% of my sales are from crops I raise and crafts I make from the crops I raise. I raise & sell hay, lumber and products made from the timber on my property and I can sell these products anywhere. The customer may be subject to sales tax where he/she resides, but they have to pay it, I am not required to collect it. YET…


Here's what a Tennessee state site says about having to pay sales tax on anything you order.
—————————-
16 – Are sales made on the Internet subject to sales or use tax?
Yes. Even if a seller does not collect Tennessee sales tax from you, when you ask a dealer to deliver an item to you in Tennessee, you are responsible for paying use tax at the same rate as sales tax.
———————————
17 – Why does a catalog company or an online seller located in another state charge Tennessee sales or use tax?
If an out-of-state business, such as a catalog company, has a physical presence, or nexus, in Tennessee (a business, warehouse, sales representative or agency relationship), then that business is required to register to collect sales or use tax on merchandise delivered to a Tennessee customer.

If the out-of-state business does not have nexus in Tennessee, the business is not required to collect Tennessee taxes.

Many Tennessee businesses and consumers are unaware that use tax is owed on items they have imported into this state without paying sales tax to the seller. The use tax has been in effect since 1947 and is the counterpart to the sales tax. When someone buys merchandise online or through a catalog and the seller of the merchandise does not collect sales tax, the consumer who bought the item has a legal obligation to file and pay use tax on the merchandise. The use tax is levied at the same rate as the sales tax.

Some businesses located in other states voluntarily register to collect Tennessee sales or use tax to eliminate the customers obligation to file a consumer use tax return. Consumer use tax returns are available on the department’s Web site, www.Tennessee.gov/revenue.
————————————
18 – Should a Tennessee dealer selling merchandise through the Internet collect sales tax?
When a Tennessee dealer accepts an order through the Internet and delivers a product to a Tennessee customer, the charge is subject to sales or use tax. If the Tennessee dealer delivers a product to a consumer located in another state, the sale is not subject to Tennessee sales or use tax.
——————————-

-- Hal, Tennessee http://www.first285.com

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