I'm probably over looking this somewhere, surely this has been asked before but I can't seem to find it. I'm going to Artfest in Dallas this weekend and don't really know how (or when) to go about paying taxes when the show is over. The only fair I've ever done before was a small one day crafty fair in OKC, and they provided a form when you checked in...
Replies
I'm still perplexed on the whole tax thing, and I'm hoping to sell in Georgia for right now.
Income tax- just keep roughly 30% of sales to pay at tax time. Is that how most deal with income tax?
Sales tax- our sales tax amount is different depending on the county. But in general the gist is the sales tax is collected by the artist/seller at the time of the sale, then it gets to the state how? At the end of the show someone goes around and collects sales tax, it's collected at the first of the year with the rest of the taxes?
How are the sales tracked, is it just the artist's honesty? Can ya tell I'm new at this?
Thanks,
Matt
Hi Matt,
When it comes to these types of questions I always recommend people go to their local Small Business Development Center. You can make an appointment with one of the small business counselors and it doesn't cost you a dime. Very knowledgeable people with a lot of business experience and resources available to them.
You can find your local center at https://www.sba.gov/tools/local-assistance/sbdc
Best of luck!
Robert, thank you for sharing that! I'd seen that SBA site some time ago but I totally forgot about it. Might really come in handy now. Thank you.
SALES TAX
The first thing you do is to read your state's website on collecting and remitting sales tax. In Georgia, you can find that at http://dor.georgia.gov/tax-registration
Briefly, if you're a Georgia resident, and you sell tangible personal property (i.e. art in a retail environment) you should apply for a business tax license.
Some shows may issue a form at the show. A few shows may collect at a show, and if you don't do more than one or two shows in a state, this is a boon. Recently, I did a show in Mississippi, and the show came around on Sunday with a simple form. This form with a check in the amount of sales tax collected at the show was turned in to the show. Every show will be different. If you are not sure how the show handles (or doesn't handle) it, call the show organizer. They will be your best resource for how THEY do it at their show.
That still doesn't abrogate your responsibility to collect the proper amount of sales tax and to pay it to the appropriate state revenue agency. If you use Square, it will keep track of how much tax you collected, via credit cards, and even cash/or checks if you use it for that as well. That makes it simple to set aside the sales tax you collected at the end of the show. Depending on your status as a business, you may be required to file quarterly, monthly or yearly. Again, the state Dept of Revenue will spell this out for you. Do your research.
And yes, if the show does collect sales tax, it's honor system, unless the show has a gate system (Oklahoma City show does it this way).
INCOME TAX
I am assuming that you have filed Federal 1040 and State income tax forms before, or that you have an accountant. There are a lot of online resources to help you with that. If you keep proper books, you most likely won't fall into the 30% tax bracket, unless you are a very very talented and rich artist. Your cost of goods, marketing expense, travel expense and much more will be deductible, either as a sole proprietor or as a corporation.
If all this seems like gobbledegook to you, my advice is to find a competent bookkeeper, and a CPA to advise you.
I was wondering about Michigan. In all the info I am getting from Ann Arbor there has been no mention of taxes or licenses. Do they hand out forms when you check in?
I was visited by the comptroller in Fort Worth. Luckily I was all legal, but it was the first time I have been visited like that.
and if you have a Michigan tax license, have it handy to show the auditor. They will accept that and you can pay at the end of the year, or quarter.
The states that always gave us the most trouble were New York, New Jersey and Massachusetts. Stay on top of those or you'll be in trouble with penalties on top of penalties.I went to the texas comptroller website and applied online for a sales permit. I just filled out the PDF on my computer and faxed it in. I think I faxed it on wednesday and I got a phone call the following monday saying I could now (legally) accept credit cards in the state of texas. I recieved a form saying that in the mail shortly after that. I'm very glad I did, because my neighbor at Artfest said he did a show in Austin a week or two before that and people from the comptroller's office were actually going booth to booth asking to see sales permits.
They also sent me a form for paying my taxes in the mail a few weeks later.
*warning* I got a TON of phone calls for about 2 weeks after I got my permit--people trying to sell me credit card machines. I was very angry that the comptroller obviously gave out my cell phone number
-
1
-
2
of 2 Next