Sales and Use Tax

Are writers responsible for remitting Sales & Use Tax on booksigning revenues or not?
Ouch! I can hear your groan. "Noooo!"

Hmmm...that's a good question and one not many writers think about. Or should I say, that's not a question writers want to consider.

For those writers like me who supply their own books for booksignings/sales, the ideal scenario would be to pay sales tax directly to the vendor when you purchase your books. In my case, that's not possible. So...

The North Carolina Department Of Revenue website states that if a writer...on two or more occasions within a 12-month period, either makes taxable sales to users, consumers, or non-registered merchants or makes purchases subject to use tax is not engaged exclusively in the business of making wholesale sales and must begin filing sales and use tax returns.

Does this mean you? 

I knew I would conduct more than 2 booksignings within a 12-month period, so I filed for a Sales & Use Tax identification number. Filing online was relatively painless and didn't take long. Not long after you file for the id number, you will receive coupons by mail.

How often do I file?

Because I anticipate a tax liability less than $100 per month, I can file quarterly, either online or by coupon/mail. Also, something to keep in mind, for NC, sales should be broken down by county. If I conduct a booksigning in Rowan County, I must charge the rate for that county, not my county of residence. Again, I found that to be fairly straightforward online, it's just a matter of knowing the rate for the county you're visiting.

Here are some other items to consider:

Consignment sales
Currently, I have books on consignment with an independent bookstore. They collect the sales revenue, remit the tax, and then send me a profit check. I am not liable for tax in this instance, because the bookstore remitted the tax.

Out of state sales

OK, this is where it gets a little tricky. Each state has different requirements. For instance, I'm scheduled for a booksigning in TN and another in VA, both with varying laws. According to a TN rep, I'm only required to file a Sales & Use Tax form after I reach $4800 sales per year. Since that's not the case, they instructed me to file a simple Consumer Return. VA is even better. Since I only plan to do 2 booksignings in VA, I'm not required to file. Yay!


Requirements vary by state, so make sure you check with your state for tax guidelines.

If you're a writer who supplies your own books for signings, how do you handle Sales & Use Tax?

3 comments:

  1. Very informative, Dora. I've wondered how this works. I guess, to make it easy on yourself at booksignings, you figure the sales tax beforehand and price the book up or down to an even amount?

    ReplyDelete
    Replies
    1. Hey Sandy.

      Before I commit to a booksigning, I check with the state for their requirements to determine the tax liability for each book. I devised a handy form that I bring along stating the sales tax separately.

      Delete
  2. Thanks for sending me the link to this blog, Dora! Very informative.

    ReplyDelete

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Dora Hiers

Dora Hiers
Author~Heart Racing, God-Gracing Romance

About me~

I'm a wife to a fire chief, a mother to two handsome sons and one beautiful daughter-in-law, and meme to two precious grandchildren. When I'm not writing, you'll find me reading, hanging out with my family, or soaking in the view from a mountain cabin deck with a cup of coffee in my hands. Won't you join me on this journey?

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O Lord, my Rock and my Redeemer. ~Ps 19:14 (NIV)

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