# interested in doing craft shows but not sure how to handle it as a hobbiest



## gurnie (Feb 2, 2010)

So i have been woodworking for around 3 years now and I have found some projects that i can mass produce *and* enjoy producing. I was thinking of trying out a large craft show that they hold ever year in December at the local community center. the booth prices were $200, and i know this sounds like its a lot, but its a HUGE show in the DC metropolitan area, so $200 didn't seem so bad.

Specific details on the craft show can be found here http://www.fairfaxcounty.gov/parks/rec/wakefield/downloads/craftshowapp-09.pdf

The catch is i am a hobbiest, i do not own a small business. So i have no idea on what i need to do in order to enter in the craft show and be legit. How do you handle sales tax? Can you be a hobbiest and still be in one of these craft shows?

Is it acceptable to just accept cash and checks?

I was planning to mostly sell wine stoppers, intarsia Christmas ornaments, small boxes, and maybe a few kaleidoscopes, cutting boards. So mostly items in the $10-50 range but maybe a few items in the $100 range

But mainly my question is how can you be a hobbiest still and enter in these craft shows and be legit?


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## cranbrook2 (May 28, 2006)

I am doing my very first wood show next month and i am also interested in knowing what to expect . 
I am also a hobbyist but they called me and asked me if i would be interested in displaying my work there so of course i said sure !!  
I won,t be charging any tax on my stuff seein that it is just a hobby .


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## stevepeterson (Dec 17, 2009)

California makes it super easy to obtain a sellers permit. Just one form to fill out. If there is a fee, it is very reasonable, like $10 or so. All this does is allow you to collect sales tax and send it in. There are free evening classes set up by the state to explain the rules and allow you to ask questions.

A business licence is the next step up, but that costs more.

Of course every state is going to have slightly different rules.


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## SteveMI (May 19, 2009)

Michigan allows you to get a sales tax number even if you are only filing on your personal 1040. Most county governments will let you register as a DBA (Doing Business As) for very small fee.

After that, search this site and some others for advise on getting an account to accept credit cards. Several ways and I'm no expert. Some have instant approval over cell phone and others you file the paperwork after the fact. Costs and risks to each. For the under $20 stuff credit probably isn't a big deal, but you would feel awful if someone really wanted one of you higher price items and didn't have cash on hand.

I looked at the link and you are fortunate they are taking such a hard stand on not allowing commercially manufactured items. And having the items juried will help you be able to compete fairly instead of trying to sell across from tables of China resell.

Steve.


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## Kieth (Oct 24, 2009)

I just found out today that there is a vendor show that will enable me to sell my pens and stoppers etc… This is purely a hobby and as such I understand that I will still need to collect sales tax but am confused on the income taxing. For me, I spend more in supplies to make all of these things and really just interested in making enough to keep buying more supplies. Does anyone know how this works? Is this creating a small business? If yes, then I assume there are write-offs for inventory and expenses etc. I guess part of my confusion comes from the fact I am a 1099'er and I seem to remember that one of the sticky points was that you had to realize whether you were actually a business or a hobby.

signed, CONFUSED IN INDIANA!!!


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## richgreer (Dec 25, 2009)

I do one craft show per year and it is completely for charity. The only compensation I accept is a small amount that covers the cost of my materials. Everything else goes to the charity. In my opinion, this is a good way to get started. I don't have to worry about sales tax or anything else. Someday I will probably sell for profit in another venue, but my experience in this charity event is very helpful. I've pretty well learned what sells.


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## rozzi (Apr 21, 2009)

I only go to one event each year. They do make me collect or at least pay sales tax on the things I sell. Those who organize the event provide me with a form to fill out and mail in to the state. If I don't do it they will not let me back in the show the following year, so, I can only assume they also provide the state with a list of vendors.


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## Sawkerf (Dec 31, 2009)

Contact the people running the show to find out what the rules are. They might also have rules about what kinds of things they will allow you to sell.

SWMBO and four friends ran a craft show here for several years and had pretty strict rules about what the sellers were allowed to sell. That rule started when a couple of people tried selling stuff they had bought from overseas. They also were pretty sticky about kids toys, etc due to the potential liability of hazardous finishes.


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## Kieth (Oct 24, 2009)

Thank you for all the responses and I hope I was adding to this thread and not hijacking it. LeeG very
good info on the taxes.


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## degoose (Mar 20, 2009)

It would be nice to have a quality show such as you have provided a link to…


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## gurnie (Feb 2, 2010)

I agree 7X10 is small, but this is my first show and i don't want to buy a huge space and find out that my space looks barren.

So far i have kept supplies receipts related to the show in an envelope. I have not yet got a tax ID yet because i was going to wait till i got into the show. Well i just got news of being accepted a week ago. I've already sent of my payment for the spot.

my fiance's dad use to work for the IRS (he is retired now). So i get what you mean about the tax people  I am going to submit my application for a tax ID soon. Anyone know how long it takes to process? I'd assume 6-8 weeks. The show is in December so I'm ok.

So far i have cut (not shaped) 30 intarsia ornaments. I am almost done with my intarsia photo frames (there's 8 of them). I'm starting on my first two cutting boards. I haven't started kaleidoscopes yet. I think the intarsia ornaments will be the big seller- they'll be priced $20-30 and i think that's a good price to sell things quick around here (DC area tends to be a bit expensive).

So how did you get a hold of your credit card machine? did you go through your bank and they offered it to merchant's? Can you just barrow it for a month for your show or do you have to buy the whole system. i think i need to be able to accept credit cards, i am just a little out of the loop on how this works.


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## gurnie (Feb 2, 2010)

i forgot to thank you for your response. thanks


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## closetguy (Sep 29, 2007)

You can apply for a tax ID online and have it within a couple of weeks. If you are from out of state, you can get a temporary vendor sales tax form from that state, and most shows supply them in the show package.

The fancy wireless credit card machines are nice, but there are monthly charges associated with them. You may want to look at Propay. You pay a $60 yearly fee, use a knuckle buster and process the cards manually online after the show. This way, if you don't do shows for a few months, you don't have monthly charges. You can also call a charge in on your cell phone. I do this for large purchases. Boardsmith is right. If you don't accept credit cards, you will have low sales. People today may be curbing the use of their credit cards, but I see a lot of debit card use.


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## kelvancra (May 4, 2010)

Since I'm not set up for credit and debit cards, I, some times, make a deal with individuals whereby they buy me something I need/want with their credit card. In some instances, this can make it easier for them to buy, since a Sears card allows them to make installments. I've gotten a significant amount of toys this way.

One advantage of a going the tax number route is having one will enable you to purchase materials at wholesale prices. The savings on wood can be as much as fifty percent. Other things, not so much (and no, the big box stores won't give you any break beyond sales tax). Another advantage is you may have enough tax breaks (tool and equipment purchases, show fees, etc.) to bring your total "tax liability" down. I started my business thirty plus years ago. My tax "obligation" dropped from thousands to one hundred fifty dollars for the first year.

And yes, you can just accept cash and checks (ask for photo ID, write the license number on the check, etc.). It's your business (We The People may do anything not proscribed by law, in contrast to government, which may only do those things prescribed by law).


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## JonathanG (Jan 18, 2010)

I know I'm bringing up an old thread here, but what I've been looking into lately is similar to this situation. Here in Denver, over the last couple of years, farmer's markets have been popping up in the metro area. So I started doing some investigating a couple of weeks ago on how they are run, what you need to do to become a vendor, etc.

The particular market I'm interested in runs every Saturday morning and early afternoon, for 22-weeks. You pay a $120 fee to attend all of them. Or you can just attend one or two, but it's $20 each time. They expect you to collect sales tax (so you need a Tax ID), and also carry liability insurance. Just thought I'd throw that out there because nobody had mentioned liability insurance. I have not begun to check on insurance yet, so I am in-the-dark on that aspect of the situation. If I eventually did form a business, it is something I would carry anyway, but in just wanting to "test the waters", I'm not sure how much it is going to cost? Liability insurance is obviously something I need to check on. In addition, they also review your application and what you will be selling, in order to ensure that it fits with their image of the market, and that not just anybody is coming in selling cheap imported items (or whatever).

This particular market is fairly small, with maybe 15-20 vendors, most of which are food related, which makes sense, since it's billed as a farmer's market. So I thought this would be a good place to draw from, selling cutting boards, etc. The area this is located at is in a middle-upper class neighborhood, with a young crowd in attendance, in general. I think that most people attending the farmer's markets around here are interested in not only getting fresh produce, but supporting the local economy. They enjoy mingling with the people that make the items or grow the items.

There is another market that is not too far away that is much larger, with exponential attendance figures too. I'm not sure what the costs and rules are associated with this one. I'm sure it falls in line though. This farmer's market is in an upper-class area. That's not to say that the average income is that much higher than the smaller one. I really don't know if that is the case or not, as it's located within a shopping mall parking lot. I may also check into this market as well.

For me, just starting out, I thought that the smaller market would be a better fit, at least to start with. A lot less hussle and bustle and a bit more relaxed. I can only assume it woudl generate less sales and less exposure. However, that might be a good thing… to start with. It would allow me to figure out what works and what doesn't, and still possibly begin to establish a bit of localized recognition.

This is all a ways off, as I wouldn't be participating until next year. At this point, it is merely something I am considering. And again, just getting started, it would be a fairly minimal expense to "test the waters".

Has anyone set up a booth at a farmer's market, or something more along these lines, compared to a regular craft or artisan fair? Was it beneficial, or a complete waste of time? I think with the right selection of items, this might be able to be successful enough that I don't feel like I'm wasting my time. Items I am so far considering are: cutting boards (including end-grain), salt and pepper shakers, breadboards, wine bottle balancers (there is a local wine booth there), candleholders for the table, possibly coaster sets, cork trivets/cork trivet kits, cork tray kits, cork message board kits. Kitchen and table items, basically.

I don't yet have a website, but will likely eventually get one. I should also take advantage of a few tricks like making a snazzy business card holder for my cards. That's something else I'll have to do eventually too.

If you've got any input on the farmer's market question, feel free to throw it out there!


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## gurnie (Feb 2, 2010)

Well an update to my story and a comment on John's statement.

Credit cards: I went to my bank and the looked at propay. While my bank had a good offer, propay beat them out because the bank wanted to charge me a monthly fee while propay doesn't. So i think i'll go ahead and go with propay.

John about the tax id; i'm in Virginia and i was allowed to submit my paperwork online (it was just a online form i filled out). at the end of the process i had a retail tax id certificate I could instantly print out. they also sent this to me in the mail about 2 weeks later with my tax id and a piece of paper that allows me to collect sales tax in Virginia. As far as i know as a sole proprietor, i have done everything the state has required me to do. call your dept taxation for your state and see if they can send you a booklet with everything you need to do / fill out. that's what Virginia offered to me and i followed the steps (which included how to access the online form). I think that'll help you a lot right there.

You ask for how much have people invested before their shows. Well I think I have spent around $700, of that $250 was the cost of the show. I need to sit down when everything is finished and get an idea how much did i spend per item in order to make the item. It sounds like a lot of money to put down but in theory I've made $2000 worth of Christmas ornaments. I have other items to build too, but for the most part i have bought everything I need for my show. So i am hoping i don't have to spend much more. (at my show i plan to sell intarsia Christmas ornaments, kaleidoscopes, hand mirrors, birdhouses, gnome doors, band saw boxes). I have 4 more months and i am feeling pretty good.

i honestly don't understand the tax number and how it can get you a lower price on wood. Right now i just pay by board foot. How does someone use their tax number to get the wood tax free? kelvancra can you explain?


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## Finn (May 26, 2010)

honestly don't understand the tax number and how it can get you a lower price on wood. Right now i just pay by board foot. How does someone use their tax number to get the wood tax free? 
///////////////////////////////////////////////////////////
Gp to each retailer and apply to them for tax exempt status for your purchases. You will need your business name and sales tax ID # ( at least here in Texas), Then whenever you make a purchase , like at Lowes or Home Depot , just tell them that it is a tax exempt purchase and they will not tax that sale. Works for me. I also have a products liability insurance policy for my small business/hobby. 
Jim
 Finn's Wooden Toys


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## SteveMI (May 19, 2009)

Johnathon,

Since you have two options on markets and some time before starting I would strongly advise doing a market survey by spending a couple of sale days for few hours at each of them. Get a coffee or other drink and just watch the traffic at the shows for couple hours. Rotate with starting one place early and mid day at the other one weekend and then switch for the next. See if the people are just strolling for exercise or actually there to spend some money if the item strikes their fancy. Watch a couple vendors of items similar nature (don't judge jewelry or knit wear if you are going to do cutting boards). Make sure you aren't going to be crowded out or under priced by some guy who makes items from cutoffs at cabinet shop that is his day job. Try to judge the price ranges that people are making purchases for, it may seem busy but all sales are $10.

I am doing a Saturday market and Sunday market currently, with both being in upper middle class areas if you count premium car dealerships and housing values. Saturday is older money neighborhood and Sunday is University town. Saturday venue is farmer market with more focused people that will actually consider and buy. The Sunday venue is Artisan market, but has lighter traffic and has a lot of just passing through traffic.

Steve.


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## ellen35 (Jan 1, 2009)

I believe tax exempt status only applies to non-profits.
Even though we don't make a profit, we do not qualify!!
I could be wrong… but I think we have to pay sales tax.
You might be able to get a contractor price on some things but I believe that is the extent of the discount.
If anyone else knows… I'd like to know.


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## Finn (May 26, 2010)

Tax exempt status applies to anything that will be later resold at retail or to anything used to manufacture an item that is sold . (That is what we do) I know this is true in Texas , Calif, and Wis. Go to where you purchase your supplies and ask them.


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## reggiek (Jun 12, 2009)

You are only allowed to purchase items sales tax free if they are intended for resale.

Some vendors take advantage of their status to purchase items for personal use or for others….but you can be discovered doing that from an audit of another's business (you must supply the vendor's you purchase from with a sales tax exemption form). Or from the audit of your business - they can select you at random anytime you have a resale number - the statute of limitations is different by state as to how long you must maintain your records.

They are getting better at connecting the dots - the auditors submit the tax free sales of items into their computer and then the computer can cross check your sales reports to see if you are reporting statisically enough sales to qualify for exemption. They use alot of the statistics garnered from sales tax audits to test your returns for possible abuse and potential audit. Some states are behind on this…but most are or will be catching up.

Also, as a business, you are expected to make a profit and pay taxes on this - otherwise treat it as a hobby and report your sales as casual sales (check with your state on the laws for this). If you have a resale and report 0 sales repeatedly your account will be put on suspension and it will be harder to get another one should you need it.

All this means is do your research first…make sure you understand the ins and outs of doing business in your state. The tax folks will not accept "I didn't know I had to do this or that" as an excuse - they will just tax and penalize you - plus interest.

Oh, and make sure you research how much discount your card processor is charging you. Some may give you a deal on the machine…etc…but get it back in the form of discounts on your payments (you submit charges for $100.00 - the processor credits your account with $98.50 (a 1.5% discount) I have heard of some charging over 3%...so do your research.


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## Finn (May 26, 2010)

" you are only allowed to purchase items sales tax free if they are intended for resale" /////////////////////////////////////

In Texas. for sure… the sales tax permit application asks if you are a retailer or a manufacturer. We are considered manufacturers. Yes we sell at retail but we are making something so we are considered manufacturers. Then when applying for tax exempt purchase account at your suppliers, they ask the same question. Different forms for each but same tax exempt status.
When filing your Fed Income Tax you fill out Schedule "SE", I think it is, and list expenses and income from this activity and pay income tax on any gain. If a loss I deduct it from my regular income tax due. I have been doing this in various businesses since 1969. Yes , I have had one State Audit and they found no problem with this.
Also, if your state taxes businesses on personal property ,like they do here in Texas and in Wis. you will be required to pay a tax on your equipment used to run this activity. Equipment tools, computer (If used in Business) A small amount…about $50 a year for me. 
All this sounds complex but it is pretty simple. I was doing this when I was 26 years old and I managed it even at that young age.
All this is based on my experiance…. your state may be different but the fed part is of course the same.


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