We consider ourselves old pros at attending conventions. We can schpiel with the best of them, schmooze and deal, and have big book-carrying muscles. While we’ve got a really great blog post on conventions, today, we’re going to focus on the less-sexy aspects of events: sales tax and other business legal stuff.
Disclaimer: Not lawyers or financial advisors.
Sales Tax is A PITA
Sales Tax is one of those things that most authors don’t think about until they’re signing up for a convention and there’s a paragraph about them having to manage their own number. So how does one go about doing that?
Just like every state has their own sales tax rate, every state has a different process for granting a license for selling. In most cases, the convention will provide paperwork for you to apply for a temporary license or a special event license. For that, you’ll need your business’s EIN number and enough time to get your certificate in the mail.
But for other states, like the great state of Texas, you have to actually set up your business in the state. That means every quarter, you’re logging into the website and telling them how much money you made. Yes, even if you aren’t a Texas resident. Yes, even if you made zero dollars.
Do You Have To?
A lot of authors see all this work and ask themselves, “Yeah, but do I really have to?” Some conventions won’t let you register for a show unless you have a state-provided ID #. Others, they post a warning that state tax auditors are wandering around and will want to see your certificate. And the wonderful state of Louisiana will show up at your table at 2pm in the afternoon on Sunday and ask for a check.
What happens if you don’t submit your stuff? Well, you’ll be hit with a fine (it’s not too much, maybe $10, depending on the state). Or they could bar you from selling in the state again.
Bottom line: Ignore Sales Tax at your own risk.
What About Online Sales?
This is the source of a lot of confusion for US-based authors. Here’s the bottom line: For online sales, you pay sales tax for customers who reside in your state.
So if you’re based in Florida, all Florida sales will be charged a sales tax. If you live in Florida and your customer lives in Alabama, then no sales tax is necessary. This law is constantly being deliberated, but as of right now, this is the way it is.