I'm starting out in the festival biz. I know its a must to charge sales tax but there are two things I would like to avoid if possible: 1.) Having to figure out the tax for each item when it sells. 2) Making lots of change (and having to keep a lot of change on hand) because the added sales tax prevents me from charging round figures. Does anyone know a way around this? I've seen talk on this forum about charging round numbers like $25, or two for $40 for product. I'm assuming this is the pre-tax price and you add the tax afterward? Is there a way to figure the price in advance so the $40 is the cost after taxes, and I can keep the round figures?
Also, I've registered for my tax number here in Florida, but do I need to register for one for each state I do festivals in?
One more thing. I just read a post that says art festivals require you to have insurance on your art. (One more thing I realize I have to spend money on!) Is this true with all festivals? When do they ask for this information - in the application process, or when you arrive to the show? I am doing a show in two weeks and was not notified about needing insurance when I was accepted. I'm worried I will show up and not be able to participate because I do not yet have insurance.
Thanks in advance.
dave
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More and more shows are requiring exhibitors to have liability insurance. An option I found was The Artists, Crafters and Tradesman Insurance Program. Everything is done online and is fast and easy. The prices are also the cheapest I found for the coverage I received. They just started advertising on artfairinsiders. www.actinspro.com
Jim Parker > Ross A. GrahamMarch 31, 2011 at 6:58pm
If you do a lot of shows in a lot of states, it can become a serious hassle to keep track of the sales tax. I'm up to about 10 states and counting so far. And having a cheat sheet in Florida won't help much, since many counties have additional tax on top of the base state sales tax. Collier, Seminole and Orange are all different, for example. (Florida Discretionary Sales Tax Rates)
Keep your retail prices in whole dollar amounts. Offer to pay the sales tax for cash customers, and get a calculator that can back the tax out when you do this. Staples has one for about $10, and it's priceless. You can program the show sales tax rate into it, and figure tax on the fly. Keep a little sticky label on your sales book that tells you what the current sales tax rate is.
David I live in Maryland and have a sales tax license for my shows here. The state sends me something a couple times per year for me to take care of sales taxes I've collected during that time period. I also do shows in VA and WV. As Walt mentioned, VA is the easiest as you can go online and print out the form, fill in the info and send them a check the day after the show. I do a show in WV where in addition to a booth fee you pay them a commission on your sales. Since I'm not from WV, at the end of the last show day when I go to the office to pay them the commission, they will also collect a separate check for the WV sales tax I've collected and they take care of sending it in.
As far as collecting sales tax on my items, I always keep it separate. It's just easier to figure out later. I have a sales book and I write up each sale so that the customer has a copy and I have a detailed copy for my records. My items are "evenly" priced---no cents, so it is easy to figure the tax. I also have a chart attached to the top of my money box showing the price +tax for each price point I sell. I also have a calculator handy to do the math. For me this is an easy set-up as I only have about 8 different price points to deal with.
We live in Virginia, but have vended at shows from Florida to New York. Most states have a temporary kind of license. Some are seriously difficult to deal with no matter what. I try to book several shows in a given state to make the effort worth it, but sometimes that doesn't work out. Interestingly, Virginia has the easiest - you just fill out a form and mail it in with a check after the show. Can't do more than three in a year without having to get a license though. We've tried getting regular licenses for the states we regularly do shows in, but each has different reporting requirements and this can get very confusing. I'd suggest you try the temporary bit for anything out of Florida.
Having small change depends on your price points. Most of our transactions are by credit card or check, and we tell customers that we'll pay the sales tax if they've cash (and we do) to avoid the hassle of a ten pound cash box. Our sales tax is only 5% though. Florida's is quite a bit higher I believe. You could always round the total down and tell them you'll take care of the change. Customers like that.
I've never heard of insurance required on your art - when required, it's liability in case someone gets injured by something in your booth. Event management outfits often require them to be named as co-insured. There are several places to get it, and varying prices depending on what kind you want. We've a lot of equipment and supplies that need insuring as well, so we've coverage at home as well as for shows, demonstrating and for teaching. I'm certain you could save money by show liability only coverage.
First, you don't "charge" sales tax, you merely collect it. You are acting as a tax agent for the state. And yes, you must have a tax resale certificate for every state you do business in that has a sales tax. And you remit the money to the particualr state on a quarterly or annual basis.
I agree that most states will not allow you to include sales tax in the price. But why on earth would you give up anywhere from 5 to 9 precent of your profit? I know one state where they specify if you want to charge, say, $25 for a veeblefetzer, you must have a tag saying the price is $23.36, plus 7% tax =$1.64 = $25. Each item must have that tag, unless all your product is the same price. Isn't it a lot easier to just charge $26.75 and make change from $30 by giving out $3.25? All calculators can do the math. And if you don't have a register, get a tackle box at Wally World. They have compartments for change above in the tray, and bills below.
Insurance is part of the game today. People are so suit happy that if some crumb cruncher drops a soda in your booth and you are unaware of it, and somebody slips in your booth because of that soda, you will get suit papers. Is it worth it NOT to be insured?
No because when they bring it up to my desk to purchase, I tell them the total including tax. If you're running into that a lot, you need to do better shows. If you have others in your booth, people usually won't say anything that will embarrass themselves.
I've read that in most states it's against the law to include tax in the selling price. I don't understand why you are having a problem unless everything you sell has a different price. I always had tax charts printed out for each percentage sales tax I was required to collect. The chart had three columns, the price before tax, the amount of tax and the price after tax. That way I could inform the purchaser what I was charging and itemize it correctly on their credit card slip. And I always kept a calculator handy for multiple sales that I didn't already have the calculations for.
I've only had two shows require me to have an insurance floater. And yes, you need a sales tax license in each state that you do business but the show either supplies a temporary form or contact information for the sales tax people.
Replies
More and more shows are requiring exhibitors to have liability insurance. An option I found was The Artists, Crafters and Tradesman Insurance Program. Everything is done online and is fast and easy. The prices are also the cheapest I found for the coverage I received. They just started advertising on artfairinsiders. www.actinspro.com
If you do a lot of shows in a lot of states, it can become a serious hassle to keep track of the sales tax. I'm up to about 10 states and counting so far. And having a cheat sheet in Florida won't help much, since many counties have additional tax on top of the base state sales tax. Collier, Seminole and Orange are all different, for example. (Florida Discretionary Sales Tax Rates)
Keep your retail prices in whole dollar amounts. Offer to pay the sales tax for cash customers, and get a calculator that can back the tax out when you do this. Staples has one for about $10, and it's priceless. You can program the show sales tax rate into it, and figure tax on the fly. Keep a little sticky label on your sales book that tells you what the current sales tax rate is.
As far as collecting sales tax on my items, I always keep it separate. It's just easier to figure out later. I have a sales book and I write up each sale so that the customer has a copy and I have a detailed copy for my records. My items are "evenly" priced---no cents, so it is easy to figure the tax. I also have a chart attached to the top of my money box showing the price +tax for each price point I sell. I also have a calculator handy to do the math. For me this is an easy set-up as I only have about 8 different price points to deal with.
Having small change depends on your price points. Most of our transactions are by credit card or check, and we tell customers that we'll pay the sales tax if they've cash (and we do) to avoid the hassle of a ten pound cash box. Our sales tax is only 5% though. Florida's is quite a bit higher I believe. You could always round the total down and tell them you'll take care of the change. Customers like that.
I've never heard of insurance required on your art - when required, it's liability in case someone gets injured by something in your booth. Event management outfits often require them to be named as co-insured. There are several places to get it, and varying prices depending on what kind you want. We've a lot of equipment and supplies that need insuring as well, so we've coverage at home as well as for shows, demonstrating and for teaching. I'm certain you could save money by show liability only coverage.
I agree that most states will not allow you to include sales tax in the price. But why on earth would you give up anywhere from 5 to 9 precent of your profit? I know one state where they specify if you want to charge, say, $25 for a veeblefetzer, you must have a tag saying the price is $23.36, plus 7% tax =$1.64 = $25. Each item must have that tag, unless all your product is the same price. Isn't it a lot easier to just charge $26.75 and make change from $30 by giving out $3.25? All calculators can do the math. And if you don't have a register, get a tackle box at Wally World. They have compartments for change above in the tray, and bills below.
Insurance is part of the game today. People are so suit happy that if some crumb cruncher drops a soda in your booth and you are unaware of it, and somebody slips in your booth because of that soda, you will get suit papers. Is it worth it NOT to be insured?
Larry Berman
Digital Jury Services
http://BermanGraphics.com
Test Your Jury Images and Presentation
http://JuryImages.com
412-767-8644
I've only had two shows require me to have an insurance floater. And yes, you need a sales tax license in each state that you do business but the show either supplies a temporary form or contact information for the sales tax people.
Larry Berman
Digital Jury Services
http://BermanGraphics.com
Test Your Jury Images and Presentation
http://JuryImages.com
412-767-8644
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