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Selling and Collecting Sales Tax

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Forum topic by Rob posted 12-19-2014 12:34 AM 1002 views 0 times favorited 9 replies Add to Favorites Watch
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Rob

229 posts in 2448 days


12-19-2014 12:34 AM

I’m going to retire in 2 years and my wife will retire in just under 3 years. We are fortunate that we both have State Retirement plans and will be ok financially (hopefully) But there will be a need to earn extra money to support my woodworking addiction. My game plan is to sell at Craft Shows. Before we retire, I will buy all the necessary things to get underway (tent, tables etc.-we already have a nice new travel trailer) and I would be very happy if I can make enough money to pay for the overhead of the shows and have enough left over to be able to buy more wood to make more things and allow the vicious cycle to continue for this hobby without having to use any of our Retirement income. Obviously if I don’t do well, I will have to take on a part time job, making sure the youngsters put a napkin in every drive through order and if someone orders a Big Mac, that doesn’t mean to put a Filet O’ Fish in the bag!

Anyway, my question has to do with collecting State Sales Tax. When selling your items and collecting Sales tax, what rate do you use? For instance, if I were to sell at a craft fair in my county, the rate would be 7.50% (4% NY State rate and 3.5% local County rate). If I were to sell at the County to the North of me, their rate would be 8.75% (4% NY State rate and 4.75% local County rate). The County to the East of me would be 8% (4% NY State rate and 4% local County rate). Then to the South of me is Pennsylvania where the rate in the nearest County is 6% (6% PA State rate and 0% local rate)

Do you have to charge different rates based on where you are doing the selling or do you charge the rate where you live and your business address would be? Presumably, you have a business license in the State/County where you have your shop so if you sell at a craft fair in another State, do you pay Sales tax to that State?

Thanks!


9 replies so far

View jerrells's profile

jerrells

891 posts in 2346 days


#1 posted 12-19-2014 02:05 PM

My advice, based on Texas, is YES. I started this several years ago, and as I looked into it I was required to collect taxes, just state as all others are rolled in here.

Look into local requirements and get local advice. From some type of fellow crafter or a tax person. I ran the question by my CPA just for piece of mind.

Best of luck.

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

View Fred Hargis's profile

Fred Hargis

3932 posts in 1955 days


#2 posted 12-19-2014 03:09 PM

I think I would talk to the state tax department, it is a very local issue.

-- Our village hasn't lost it's idiot, he was elected to congress.

View TheDane's profile

TheDane

4997 posts in 3125 days


#3 posted 12-19-2014 03:17 PM

I think I would talk to the state tax department, it is a very local issue.

Fred is right … make sure you are on the right side of local laws as they can vary from one locale to the other.

In my experience, you collect/pay the prevailing rate in the locale where the transaction takes place.

-- Gerry -- "I don't plan to ever really grow up ... I'm just going to learn how to act in public!"

View Earlextech's profile

Earlextech

1159 posts in 2152 days


#4 posted 12-19-2014 04:38 PM

You will get as many answers to this as there are tax attorneys. And, the laws change all the time. My suggestion. Do all the research you can stand. Make your decision on how you will do it (there will be choices). Then, don’t let it get the best of you. Enjoy your woodworking!

-- Sam Hamory - The project is never finished until its "Finished"!

View dickjo's profile

dickjo

10 posts in 1098 days


#5 posted 12-19-2014 04:55 PM

NY requires you to report sales for each County and any Cities that also have a tax. You will find out all about it when you apply for a sales tax number. Many craft shows require you to have the tax number

View CharlieM1958's profile

CharlieM1958

16241 posts in 3680 days


#6 posted 12-19-2014 04:59 PM

In most cases, sales tax is payable at the rate of the place where the merchandise changes hands. But it’s a definitely nothing universal. You need to check with you local authorities.

In my day job, I deal with payments for very large purchases. Sometimes even our CPA’s are so confused by the laws that they’re not sure what rate we’re supposed to be paying in a given situation.

-- Charlie M. "Woodworking - patience = firewood"

View BigYin's profile

BigYin

347 posts in 1878 days


#7 posted 12-19-2014 04:59 PM

Talk to both the state and county tax departments and get in writing any and all statements, claims and advice given by them.

-- ... Never Apologise For Being Right ...

View Wildwood's profile

Wildwood

1882 posts in 1596 days


#8 posted 12-19-2014 05:21 PM

You may try looking for information here, also your local county tax office.

http://www.tax.ny.gov/bus/st/stidx.htm

You may need a federal tax ID number would look at IRS for booklets and forms too!

I always check to see if need a city and county or both license before going out of town. Now that is not uncommon for different sales taxes rates will find may need a vendors license before selling in a different area.
Recommend visiting different shows not far from your home and talk to people selling at those events for advice on everything you do not understand before retiring.

Better have a handle on record keeping, taking credit cards, something like a Square Account, tax software essential today. Many big shows now require you to carry insurances.

https://squareup.com/

You may find just few doing local shows and getting an ESTY account lot less taxing than long road trips.
https://www.etsy.com/

Ignorance of the law is no excuse, so do not expect advice you get at a governement office to be always correct, smart ones will refer you to a web site or publications for right information.

-- Bill

View Rob's profile

Rob

229 posts in 2448 days


#9 posted 12-19-2014 10:49 PM

thanks to all that have provided information. I will look into things and get clarification from both my County and State

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