Question – I am thinking about selling items i make at craft shows. What do i need to do with the state of Iowa to begin doing that?
Also would the items example: fabric for blankets, be tax exempt?
What about selling items online? Do i charge tax to someone from out of state?
Thanks for your help I haven’t started doing this yet but want to get all my ducks in a row before deciding if i want to adventure into this.
In the past the Iowa Department of Revenue allowed Temporary Sales Tax Permits if you were only attending craft shows but starting July 1, 2016 they stopped offering the Temporary Permits so now you will need to get a regular Sales Tax Permit. https://tax.iowa.gov/iowa-sales-and-use-tax-guide.
To apply for a sales tax permit, you can apply online – https://www.idr.iowa.gov/CBA/start.asp. There is no cost to apply for one.
The items you purchase that you are going to resell can be purchased tax free. In order to purchase items tax free, you will need a Sales Tax Exemption Certificate, also from the Department of Revenue. Here is more information about the Exemption Certificate – https://tax.iowa.gov/sites/files/idr/documents/78637_0.pdf
For sales taxes you will collect sales tax for any sales that is shipped in-state. More info on in-state sales tax – https://www.taxjar.com/states/iowa-sales-tax-online/#how-to-register-for-a-sales-tax-permit-in-iowa
Online sales that are shipped to another state you will not collect sales tax. https://tax.iowa.gov/iowa-sales-and-use-tax-guide. Be sure that if you will have shipping charges/fees on your orders that you separate them on the receipt, otherwise the shipping will be taxed too for your in-state customers.
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