Flea markets are nearly always under the jurisdiction of the town in which they are located, which means that vendors are required to have a valid sales tax certificate at their booths, even if their items are non-taxable. Seasonal businesses must pay, at minimum, income tax on profits, sales tax on taxable items, self-employment taxes and employment taxes if there are employees at your booth. Many vendors are classified as a sole proprietorship, meaning that business taxes are paid through a vendor’s personal income tax return. Vendors who sell new merchandise may already be familiar with sales tax numbers, as wholesalers require these, but for those who are just getting started, here are some tips for navigating the tax process.
Start by getting in touch with the state office your market associates with for a list of items that aren’t taxable in your area. This can vary by state, but many state agencies make this information easy to find online.
Next, register for a sales tax permit in your state. This, too, can be done online in some places. Other options, such as short-term permits valid for 30 days, are available to you in certain states, and may be a better choice for vendors who travel between states or only attend seasonal markets. This is a good time to determine the local and state sales tax rates, if you haven’t already, so that you may add that number to the price on your merchandise.
When deciding how to factor in the sales tax for your items, the best practice for flea market vendors is to work the sales tax percentage into the price listed on the item being sold, rather than tack it on at the point of sale. Keep a log of the prices you paid and the prices you charged, with and without the tax, so that you have a record of how much profit you’ve made each year. When in doubt, talk to a certified accountant to be sure that you’ve covered all of your bases.