Hi there,
So I've been doing shows in Cali for a few years now. I always had a sellers permit and paid my sales tax. Recently, I got a large bill for my 2018 year for $1600 ($800 + $800 in late fees), claiming I did not do a yearly filing and I owe this. The few artists I've asked have said they only pay sales tax. Seems wrong that I would have to do a yearly filing when I'm not in that state. The filing form is asking all these questions on permit #s that I do not have. Anyone who is in this situation, or similar in another state that has advice is much appreciated! Thanks!
Ryan
Replies
It's unclear whether you're telling us that California wants you to pay estimated INCOME tax, or if they're dunning you for sales tax. If you have a sales tax permit or temporary permit, and filed timely sales tax reports, then you should be able to produce that documentation. (You did keep copies, right?)
OTOH, if they are saying that you are required to file California income tax for the years in question, you need to do some research to determine whether your income, apportioned for that state, meets the minimum requirements for having to file state income tax.
Every state is different. Usually reading through the documentation for out-of-state filers will clear up most questions. However, a phone call might prove to be the quickest way to eliminate that 1600 bill, especially if you only do a couple of shows and are an out of state resident.
Ryan,
Did you get a bill for CA income tax or was it sales tax? And how did they come up with an exact number that you owe?
Sorry, Ryan, you haven't had an answer sooner ... every state we have done art fairs in has required a state sales tax license. Some states you can file right after the event, others (like Illinois where we did numerous shows) we had a yearly filing. Does this answer your question? We lived in Michigan, so there, of course, we filed income tax on our sales as well as sales tax.