Have you noticed that some states seem to have an aversion to "atypical vendors?" We've done shows in seven states now. Never have I been more irritated than by the lengths some states will go to ruin your day when it comes to tax collection. I really try to do it right. I have no objection to collecting the sales tax and sending it on to the state in question. So why do some states make this an exercise in hair-pulling?
I realize that the ease of doing business with a given state has become a factor in whether or not I will do a show in that state. Take Connecticut. The ill-fated Wilton show is apparently on an upsurge now, but I think I would rather clean alligator ponds than take out another license with Connecticut. It's an all-or-nothing state. There is no grey area for transient vendors or "special events" vendors (as in Illinois.) As far as they are concerned, you are brick and mortar. On top of that, they insult you by exacting a hundred dollar fee for the priviledge of collecting their state sales tax.
And then if you don't file every three months, tax due or not, you will get a nastygram that threatens everything short of bodily harm. I cancelled the license after dealing with this for two years. So no Wilton show. They probably wouldn't issue me one anyway.
Pennsylvania is almost as bad - all of the above except for the fee. North Carolina also had the same program but finally changed it. Let's hear it for common sense.
Kudos to Illinois, Maryland, Kentucky and Ohio. Simply one piece of paper form, send it in with your check by the due date, forget about it.
Any thoughts on sales tax collection?
Replies
Hmm...my CT sales tax license is filed annually and there was no hefty fee upfront. A lot has changed in the 20+ years of holding on to it! I am looking forward to doing a show in RI next month, as there will be no sales tax collected on art sales...I think this is the state Robert was referring to. Last year (at Virtu in Westerly, RI), they came around with the forms and the director collected the checks for taxes before the end of the show. I didn't mind that kind of easy transaction at all but what an nice idea to exempt sales tax on art!
I had a hiccup once with VT, as they sent me an "estimated" tax bill for $5000 for one Craftproducers show...Let me know if I'm wrong but I don't think it may not be possible to warrant that tax amount estimate in art sales from that state. After paying a late fee and the taxes owed, it was okay...just had to write an appeal.
I live in VT and I have no idea where they get their figures from. They do make life interesting. And I got my CT cert free a number of years ago too.
One state that doesn't play around is New Jersey. A number of years ago I was doing a show in Edison and the tax people showed up. They went to a booth nearby and flashed their official badges and wanted their past due sales taxes. (The promoter supplied the state with the list of exhibitors and their resale numbers.)
The exhibitor got into an argument and the tax collector threatened to shut him down and confiscate his booth for the back taxes. The promoter got involved and cooler heads prevailed, and the exhibitor was given a bill with instructions to pay it ASAP.
Texas can be kind of difficult especially if you miss a quarterly filing. CA, Colorado, NM, and Nevada are all pretty easy.
I've cancelled accounts in all states that I used to frequent and don't show at anymore. I had just kept the license so that I didn't have to apply again if I decided I needed to go back. I had a few delinquent situations and I'm certain that deep in the back of my mind I knew about the deadline and just procrastinated filing. Why I ever had an Illinois license I'll never know since I only did two shows there a year and the state doesn't require transient vendors to get one for just two events. So I cancelled it quite a long time ago and just filed after each show. I kept Ohio license since I had more difficulty with them obtaining one, and I appreciated their help line since it was easily accessible and they always quickly answered my questions. But I certainly didn't need to keep filing zero reports if I wasn't even doing shows there or really planning to do more in the future. It's just a nuisance.
Alabama is certainly an easy state to concquer. Do Kentuck Festival sometime and see how they make filing sales tax a do it now no brainer. Representatives from county, city, and state are all there waiting for artists after the show to bring checks to them, and they'll give you a receipt. You can't leave the show until you've done your taxes. Monte Sano at Huntsville in North Alabama and Fairhope sponsored by Eastern Shore Chamber of Commerce in South Alabama were not as simple as Kentuck, but still all I had to do was collect the tax and file the separate returns provided by the shows. I never had to obtain a permit.
Since I'm a seasonal vendor at Florida, I only have to file twice each year. That's perfect! And I just received notice from Wyoming, my home state, that they're allowing me to file annually instead of quarterly. Those are the only two states wherein I've kept licenses. I suppose if we were based in Central USA, we'd do more shows and thus need permits in surrounding states. We don't do shows at Colorado much anymore, but their system is pretty simple. Montana doesn't even have a sales tax, so no permit required, period. Thanks, Montana! WOOHOO!
Same for New Hampshire where I do a lot of shows. No sales or income taxes.
Only reason I mentioned Ohio is because that's where I live. It used to be a nightmare when they had the so-called "personal property" tax with its unbelievable form, but they dropped that a few years ago. Yes, I realize that was a separate entity from sales tax. Now Ohio Gateway is a piece of cake.
Illinois now has a "special events" category which has made filing sales taxes a breeze.
yes.. Lovely KY has that lovely form I fill out each year so they can see if they can tax my supplies or inventory..
The only problem with Ohio is the late fee they assess for late filing. Most states just have it as a percentage adder, but the Buckeye state starts off with a $50 plus penalty whether you owed anything or not.
Now there was a gosh awful incident several years back when I wasn't diligent about the Indiana taxes. Someone changed my filing interval from yearly to monthly, and I didn't know it. Somewhere about 15 months later, more or less, I get a letter telling me I owed something like $24K in back taxes. WTH? Each month was assessed an estimated maximum amount. I should be so lucky to owe that much, because it would mean I was selling art work out the wazoo.
Then a few days later I get a phone call from a collection agency demanding payment on the unfiled taxes for the $24K. They were extremely hard nosed and salivating over the commission they thought they could get. I pissed them off when I laughed at them and told them I didn't owe them squat as I hadn't filed. They told me it was too late and the state had turned it over to them. After much browbeating by them, and equal insistence by me that the collection amount was nonsense, I finally told the agent I was hanging up. I decided speed was the essence and hustled down to the state tax office and filed the back returns in person, all of which were zero except for two.
I paid the state something like $112 including late fees. This was despite the collection agency's insistence that it was out of the state's hands and I had to pay them. The collection agency was also insisting on at least a 10% payment in good faith to keep it from going to court. Lying scumbags. I fired off a blistering letter to them afterwards pointing out the lies and breach of several Federal regulations they had broken and threatening legal action against them if they damaged my credit report. I never heard back from them and the collection action never showed up on my credit report.
I file on time now, except for the slip up on Ohio where I had the times wrong.
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