Good afternoon! In just over two weeks I'll be at my very first show, and I have a question for veterans here about taxes.
I am working on pricing and signage, and I have considered including taxes in my pricing. On the one hand, doing so would make at least cash sales easier, as it would reduce my need to deal with change (yay!); on the other, my displayed prices would be higher and might discourage sales. Additionally, it's apparently illegal in some states (unsure of mine, CO, and have been unsuccessful in getting an answer) and may require disclosures that could make for ugly signage and/or receipts.
If anyone's wondering, I'm not trying to get out of paying taxes; I have a regular retail license and also a multiple event license. I'm just trying to make my life easier if it's legal and isn't a detriment to sales.
Thanks for taking the time to read this!
Replies
In Colorado, retail sales taxes at shows I have done ranged from 4.5% to 8.9%. First you will jeed a Special Event License. Then the fun begins. Sales tax can be composed of State, County, City, and then special districts for stadiums, Regional Transportation, and what ever else the politicinas dream up. And, except for the 2.9% State, all are different. In addition, you may be required to buy an annul city license for the weekend show. How you plan to include this in your price, sounds like the biggest accounting can of worms I have heard of. Set your retai price, collect and pay the sales tax, go home, sleep well, spend more time producing art than changing prices IMHO.
Thanks everyone for your replies. With concerns that it might not be legal here in CO, I ended up not including taxes in my prices.
Good call. It will be easier for you in the long run; and at sales tax time, you won't have to do the math of backing out all the --possibly various-- tax monies for reporting/paying.
Good Luck,
--Chris Fedderson
99% of my sales are CC purchases. I make sure that I have the correct sales tax percentage for that state in the machine and it is calculated automatically. Hardly anyone complains. If they do, I just tell them the state gets mean if I don't charge the tax. A lot of times people ask for a deal. Unlike others, that doesn't bother me. A good way to give them a deal is to tell them I will pay the sales tax, which means they are getting a 6% discount as opposed to 10% or 20%. It usually works. I have very few cash sales and it isn't an issue. I either do not charge the tax or round it off to a lower number to make things easier. If I take in lets say $100 in cash, I simply divide the amount by 1.06 if the tax is 6% and then subtract that by $100 and that is the tax portion of the sale. Easy peasy.
I include the tax in all my sales. No way am I dealing with coin change! I have a sign attached to my sales tax license that states this. It is legal in my state (NY). All of my sales receipts have a line item for tax worked out backwards from the cost I charged the customer. I've not had any issues.
I don't include tax in my prices as I would rather deal with figuring out the tax than have all of my selling items taken away from me if I get caught. I heard that the area I live in is strict, (South East PA and NJ) although I have have never seen anyone auditing the area. Not worth it to take a chance!
I have done it both ways, charged tax and also at one time included it in the price. For all the reasons listed so far, I prefer not to include it.
We do not want to deal with coins, so... If someone is paying with cash and their total is not an even dollar amount, we just tell them not to worry about the coinage. Sometimes they insist on giving us the coins but more than half just say "thanks!"
Since most people pay with a card, we do not carry lots of cash for change. Usually no more than $150 split between ones, fives and tens. So for us the cash bag is not a huge amount of money but still something we are careful with.
Here's where I landed on this issue. I do not charge tax for cash transactions but I do for credit cards. For me, I prefer to keep my cash transactions simple so I can move on to deal with other customers, and I save a little on the credit card fees. Square makes it easy to charge tax (plus their own fees!) and I don't have to make change in my head when I'm distracted! Good luck with everything!
Deborah
Wise Owl Artworks
If you do shows in multiple states, that would mean you're going to have to change your prices for every show. So much for simplifying your bookkeeping.
Much better to be clear to the customer what is your price and what is the tax.
Trust me, you'll get used to it just fine.
Hi CC, [sorry, I used up all my "Yo" allowance ;-> ],
Yes -- "Much better to be clear to the customer...". Also, this is the reason behind the laws against including tax into the price -- unless it is also clearly delineated -- all the consumer honesty falderol :-d [that's my tongue in my cheek].
Sometimes, during "working with" a customer who wants an unwarrented discount, I'll offer to pay their sales tax for them, so now I'm giving a +/- 6% discount instead of the much heftier one they think they deserve and they invariably go for it. Would be much harder to do with an all-in-one price.
--Chris Fedderson
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