07-28-2007, 07:23 AM
The following information is based on my own experience, but I have retired so you should check everything I say to make sure it is current.
Based on my experience in California, whoever collects the money for the sale should include the sales tax (on the total sale). You are not paying the sales tax twice, only once on the total of the painting and the frame.
You must get a CA State resale # if you are going to collect tax. If you don't have time to do this before the opening, you should increase your prices by the percentage of the sales tax in your area and tell your customers that you will pay the tax for them. This makes the price seem better to the customer and since it's a blind item the included tax shouldn't make a difference to your customer. Keep a record of your sales and report the amount of sales tax you've collected when it is due.
If you are paying a commission to the gallery, THEIR PERCENTAGE SHOULD BE ONLY ON THE PRICE BEFORE THE TAX WAS ADDED.
If you usually will have a reseller (gallery) collect from the customers and they include the tax, you should tell the Board of Equalization that the bulk of your sales will be wholesale. If you convince them of this you shouldn't have to pay a deposit against the taxes you'd be expected to collect if you were retailing. This will still give you a resale number and allow you to collect and pay in the taxes you collect.
How about some pictures of your art work?
Have a great success!
As I always say, "that's just my opinion, I could be wrong."
GeneL
BTW, as far as sales tax, don't make it too complicated. Know what the percentage is, collect it, keep track of it and MAKE SURE YOU PAY IT TO THE STATE! It's really simple.
Oh yes, if you sell to a wholesaler or agent, make sure you get their resale# or you will have to pay the sales tax on those sales. Keep good records of everything because one day you may have to prove to the State what you actually sold and whether it was taxable or not, Another thought is that once you have a resale number you should be able to find wholesale sources for your supplies and you won't have to pay sales tax on anything the goes into your art work and what is used to produce it should be deductible.
Based on my experience in California, whoever collects the money for the sale should include the sales tax (on the total sale). You are not paying the sales tax twice, only once on the total of the painting and the frame.
You must get a CA State resale # if you are going to collect tax. If you don't have time to do this before the opening, you should increase your prices by the percentage of the sales tax in your area and tell your customers that you will pay the tax for them. This makes the price seem better to the customer and since it's a blind item the included tax shouldn't make a difference to your customer. Keep a record of your sales and report the amount of sales tax you've collected when it is due.
If you are paying a commission to the gallery, THEIR PERCENTAGE SHOULD BE ONLY ON THE PRICE BEFORE THE TAX WAS ADDED.
If you usually will have a reseller (gallery) collect from the customers and they include the tax, you should tell the Board of Equalization that the bulk of your sales will be wholesale. If you convince them of this you shouldn't have to pay a deposit against the taxes you'd be expected to collect if you were retailing. This will still give you a resale number and allow you to collect and pay in the taxes you collect.
How about some pictures of your art work?
Have a great success!
As I always say, "that's just my opinion, I could be wrong."
GeneL
BTW, as far as sales tax, don't make it too complicated. Know what the percentage is, collect it, keep track of it and MAKE SURE YOU PAY IT TO THE STATE! It's really simple.
Oh yes, if you sell to a wholesaler or agent, make sure you get their resale# or you will have to pay the sales tax on those sales. Keep good records of everything because one day you may have to prove to the State what you actually sold and whether it was taxable or not, Another thought is that once you have a resale number you should be able to find wholesale sources for your supplies and you won't have to pay sales tax on anything the goes into your art work and what is used to produce it should be deductible.