If you’re an author or artist, it’s likely that one of your goals is to sell some of your creations. You might enter art shows with your paintings or go to book fairs with a box of your books. In either case it’d probably be a little sad if you came home with no sales at all.
So that means you should celebrate when you are eligible for paying a sales tax! It’s a tangible sign of your success!
I’m in Massachusetts, so this description is about Massachusetts sales tax. If you live in a location which has a sales tax, you’ll want to look up the details for your location.
Here in Massachusetts, sales tax for pretty much all of us artists and authors can be done online. It’s fairly quick and easy to do. If your sales tax payment is $100 or less you can do it once a year. If your sales tax payment is $101 to $1200 you pay quarterly. Here’s the details.
The sales tax rate in Massachusetts is 6.25%. So you’d have to manually sell at least $1600 in goods in order to need to pay quarterly. If you sold $1600 in goods, you’d owe $100 in sales tax. Under that and it’s fine to file once a year.
Note that there IS NO MINIMUM AMOUNT of sales tax below which the government doesn’t want their money. The Massachusetts government wants ALL their money even if it’s just pennies. It’s best to file. With all the electronic systems in place nowadays, they can figure these things out. Keep track during the year of what you sell. Take that final number and multiply by .0625 – and then send in the tax. It’s better to be safe.
Once you file the first year, the Mass government will send you a reminder each subsequent year if you forget to file, in the form of a bill for $50 :). It’s not that you actually owe $50. It’s just that they are prodding you to actually file. Figure out what you do owe them and submit the money. If you didn’t owe any sales tax at all that year, then submit a zero-money entry. They want to know that you didn’t sell anything.
Note that legally any time you’re at an art fair or book fair or something and you are making sales you are supposed to display your sales tax ID in a visible place so customers know you’re legally allowed to sell. You can just make a photocopy of your ID form and stick it on a corner of the table or something.
If you have your sales go through Amazon or a bookstore or something like that, they will generally handle the sales tax for you. So you don’t need to count that income. But if you’re in the BVAA gallery in Uxbridge, for example, we don’t do any sales tax processing. So you’d need to pay sales tax on income earned there. If you go to a book fair and take in money, you need to pay sales tax on that.
Note this is COMPLETELY SEPARATE from income tax. So whatever you do or do not do with your income tax, you still need to pay sales tax to the Massachusetts Department of Revenue. Those are separate activities.
Also note, you have to pay that sales tax HOWEVER YOU WERE PAID. Whether you were paid in cash, via credit card, via check, via PayPal, the Mass DOR does not care. They count all of those as sales and you personally are required to therefore pay sales tax on those transactions.
It appears that even renting artwork is a money-exchange transaction for goods and needs to have sales tax accounted for. So if you are renting out your artwork, make sure that either your organization or you are paying the sales tax on that amount.
Ask with any questions – and congratulations on earning an income on your creative projects!