For those who sell their crafts...
By Sillychick
@Sillychick (3275)
United States
2 responses
@owlwings (43915)
• Cambridge, England
15 May 09
I am not sure how Etsy works with regard to any sales tax or Value Added Tax. Almost certainly, you can't simply avoid it but where and when it's chargeable is likely to be a minefield.
You might find that the Help sections of eBay will be useful in giving you a guidance in how an online business is liable for tax. In eBay, select the Sell tab (top right) and then Business Centre. You should find a number of very helpful articles there which, if nothing else, will give you some material to discuss with your accountant.
1 person likes this
@Sillychick (3275)
• United States
15 May 09
I'm not asking how to go about collecting sales tax and how much, I'm asking if sellers have a business on the books, or do they not report the income, meaning they do not collect sales tax.
I know that tax laws vary by state and locality, and I know where to get the information regarding who, how much and on what to collect sales tax.
1 person likes this
@owlwings (43915)
• Cambridge, England
15 May 09
A very small 'sideline' business might not see the need for keeping books or declaring income for tax but book keeping is a very useful and advisable thing to do. For one thing, it can tell you exactly how your business is doing and for another, if your business grows, you will have complete records of your expenses and sales and may well be able to set early expenses against later tax.
As far as I am aware, Etsy and other sites are simply market-place sites. The transactions are essentially between private individuals, so Etsy has no involvement in whether or not sales tax is due.
1 person likes this
@owlwings (43915)
• Cambridge, England
15 May 09
It seems to me that what you appear to be asking is that people reveal whether they are dealing 'under the table'. Many people do, of course, and may get away with it. Strictly speaking, ALL income is declarable, though. If you earn from an Internet site and are likely to earn more than a certain amount with that company, the company has a liability to send the IRS a statement of earnings and that is why a number of sites require your SSN at some point.
If anyone has a very small sideline business, it is up to them, of course, to decide whether or not to declare their earnings. I really wouldn't advise anyone to admit here or anywhere else online that this is what they are doing, however. It is quite unlikely, perhaps, that the IRS spends time trawling forums looking for possible tax evaders but, if they did become aware of someone, it is worth pointing out that the Internet is not quite as anonymous as many people imagine.
1 person likes this
@Sillychick (3275)
• United States
18 May 09
It must be nice to be able to to do business without having to jump through a million hoops. Here you have to report anything over $600 I believe. Plus, if you sell things and don't collect sales tax, that's big trouble. Sales tax is complicated and difficult and has steep penalties if you screw it up. It's almost not worth the hassles.
