So I’m preparing for my first art fair next month. I have my tax ID number and I’m aware of the sales tax for my location but I’m wondering if its legal to just build the sales tax into the cost of the product (like they do in parts of Europe) rather than charge more at point of sale? The research I’ve done says that some states don’t allow this (for example, rather than have someone buy a twenty dollar item and charge them an additional 2.50 tax, I could just make the cost of the item an even 22.00 and pay my taxes from there). But I can’t find any definitive answer as to whether Illinois allows this.
I’m trying to avoid a) having to have a bunch of nickel/dime costs and change and I am nervous with all the individual city/state taxes that I might calculate something incorrectly. Besides, it just seems easier to charge a flat fee...no surprises at check out.
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The other thing about putting your tax % into your payment system instead of your prices is that it will change. If you do a different show in a different part of the state, or a different state, the % will be different. You just change the tax rate on your payment system and not have to make 25 new price tags. Easy peasy. It's important to change it, too. Years ago I just kept the same generic tax rate in my Square and when I went to pay Texas taxes one year, I discovered that lost me some significant money because one municipality was very high. I just did a show in Birmingham where the combined taxes were 10% and we had to write checks for each of 3 govt entities before we could leave!
Cindy Welch > Carol Joy ShannonJuly 2, 2019 at 10:11am
Exactly!!! That is part of the reason I did not include tax in my prices for very long.
I never said that I wasn’t using square and I don’t know how that was inferred but I do. However my point was that not ALL transactions will be credit card based. I was simply trying to avoid having to bring twenty dollars of nickels, dimes, pennies, quarters. Simply adding 2.00 to each item would easily cover the sales tax on any item and I don’t get why I can’t just do that. But I guess that’s just the way it is.
Susan Lokaj > Carol Joy ShannonJuly 1, 2019 at 3:26pm
I don't do a ton of shows and the tax rate only changes by about a half percent from show to show. I leave the price tags the same and just adjust the tax rate in the square inventory. I put all sales, including cash, through the square so I have an accurate accounting of what was sold. I find it much easier than having to keep lots of change on hand -- this way all of the pricing is in whole dollar amounts.
Carol Shannon is spot on . For those of you who do not use square or a similar device , you are limiting your sales drastically . Taking credit cards increases the average show take by 75% . So ,,, if you want to continue with low sales do so . That is your "choice" . As far as tax problems . You can get free tax charts from almost every state . If you can't add the cost of sale and the tax off the chart , get a calculator . This is not rocket science. As regards small church craft shows , the smaller the cheaper the show.... the smaller the profit . When customers see small craft items and the vendors mix what they sell, it comes across as a type of tag sale , and in tag sales , people want bargains . I personally do only juried shows . I always check the median household income in any new town that wants me to do a show . If the median income is not to my liking , I don't do the show . I sell fine art mixed media , Woodburning with acrylic wash . My prices range from $100.00 to $800.00 with the median sale price being $350.00 on average . I do shows in 6 contiguous states and they all have different tax codes , and different ways of reporting . I have no problem keeping track of the tax. Some are paid monthly, quarterly and one is yearly . Several towns get a separate check the day of the show . Very simple and no problem .
If you're using Square, just put your sales tax rate into your Square. The people buy the item at the price you put on it and Square adds your sales tax at point of sale. No math required. So when you plug in $22 Square adds say $ 1.25 and you tell your customer, "with tax that comes to $23.25." Simple as that. Everyone knows they have to pay sales tax.
Yeah, I guess I need to do a bit more square research before I go. I didn’t realize I had to create items ahead of time to charge them/sell them. I thought you could just enter the amount per transaction.
We do exactly what Carol Joy Shannon does. It works like a charm! The Chicago customer already KNOWS how ridiculously high sales tax is here, so they are used to it. This is indeed the proper way to do it.
I DO have square, but not everyone uses it. It will most likely be a mix of cash and credit sales, which I was trying to avoid having to bring a ton of coinage for nickel and penny transactions...flat fees are so much easier. I guess there’s no way around it.
Cindy Welch > Jessica McCartneyJuly 2, 2019 at 10:10am
You may be aware of this but cash sales can be run through Square as easy as cc/dc.
Replies
The other thing about putting your tax % into your payment system instead of your prices is that it will change. If you do a different show in a different part of the state, or a different state, the % will be different. You just change the tax rate on your payment system and not have to make 25 new price tags. Easy peasy. It's important to change it, too. Years ago I just kept the same generic tax rate in my Square and when I went to pay Texas taxes one year, I discovered that lost me some significant money because one municipality was very high. I just did a show in Birmingham where the combined taxes were 10% and we had to write checks for each of 3 govt entities before we could leave!
Exactly!!! That is part of the reason I did not include tax in my prices for very long.
I don't do a ton of shows and the tax rate only changes by about a half percent from show to show. I leave the price tags the same and just adjust the tax rate in the square inventory. I put all sales, including cash, through the square so I have an accurate accounting of what was sold. I find it much easier than having to keep lots of change on hand -- this way all of the pricing is in whole dollar amounts.
Carol Shannon is spot on . For those of you who do not use square or a similar device , you are limiting your sales drastically . Taking credit cards increases the average show take by 75% . So ,,, if you want to continue with low sales do so . That is your "choice" . As far as tax problems . You can get free tax charts from almost every state . If you can't add the cost of sale and the tax off the chart , get a calculator . This is not rocket science. As regards small church craft shows , the smaller the cheaper the show.... the smaller the profit . When customers see small craft items and the vendors mix what they sell, it comes across as a type of tag sale , and in tag sales , people want bargains . I personally do only juried shows . I always check the median household income in any new town that wants me to do a show . If the median income is not to my liking , I don't do the show . I sell fine art mixed media , Woodburning with acrylic wash . My prices range from $100.00 to $800.00 with the median sale price being $350.00 on average . I do shows in 6 contiguous states and they all have different tax codes , and different ways of reporting . I have no problem keeping track of the tax. Some are paid monthly, quarterly and one is yearly . Several towns get a separate check the day of the show . Very simple and no problem .
If you're using Square, just put your sales tax rate into your Square. The people buy the item at the price you put on it and Square adds your sales tax at point of sale. No math required. So when you plug in $22 Square adds say $ 1.25 and you tell your customer, "with tax that comes to $23.25." Simple as that. Everyone knows they have to pay sales tax.
We do exactly what Carol Joy Shannon does. It works like a charm! The Chicago customer already KNOWS how ridiculously high sales tax is here, so they are used to it. This is indeed the proper way to do it.
You may be aware of this but cash sales can be run through Square as easy as cc/dc.
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