# kids and sales taxes?



## longhorngal (Aug 4, 2005)

My kids and a friend have started selling lip balms at my soap booth during the farmer's market. They are really doing well with it which kind of surprised me. I don't know why but I thought I would just pay sales tax on the balms when I pay mine for my soaps. My husband said no, that would count as income for me when I'm not getting any money from them at all. I've read about kids filing an income tax report but haven't figured out the sales tax question yet. I will contact my state's office but just thought I would post here first and see if anyone knew. Probably get a faster response LOL.


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## Ken Scharabok (May 11, 2002)

Answer likely varies state to state. Here in TN they would have to collect state sale tax and turn it into the state at least four times I year. For my eBay sales I turn over maybe $20 a quarter in state sales tax. One nice aspect is, by doing so, I am issued a state sales tax emeption for anything I buy for resale or incorporated into an end product I produce.

Friends are big into flea markets from both a buyer and seller aspect. Told me a state sales tax official showed up at a large once-a-week one and didn't make it beyond a couple of booths checking for tax certificates before most of the rest were packing up and leaving. Now to sell there you have to tell the booth/space fee collector you have a certificate.

If you are selling personal property, no state sales tax. Reselling and it applies. I'll have to ask about livestock sold there out of curiousity.

Livestock vendors set up at one side. Guy who makes and sells cages sets up next to them. I think that is a pretty good idea. Fairly simple to make, light weight and with a ready market.


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## used2bcool13 (Sep 24, 2007)

If you paid sales tax on the items when you purchased them as ingredients do you have to charge an additional sales tax when you sell them? 

In a way that doesn't make sense. When you buy goods that are destined for resale, the initial purchase should be tax free and then you would charge tax on the actual consumer sale.

I am not trying to be difficult, I am just trying to save the kids some money.

Here is some information (from Michigan)
If youâre doing craft work, you charge your customers (in Michigan) sales tax on what you sell them.


When you purchase your supplies, if you paid sales tax on them you do not owe use tax. You can probably deduct from the sales tax you charge your customer, the sales tax you paid on the supplies; it depends on what the rules are.



If you buy your supplies without paying sales tax, then use them yourself, then you pay use tax, which is paid at the same rate as the original sales tax. In effect, youâre using them yourself and thus you pay use tax. If you use them to construct something that you sell to someone else, if you sell them to someone in Michigan, you charge them sales tax. If you sell them to someone outside Michigan, you might or might not owe Use Tax, it depends on the rules there. I would suspect if you bought something without tax, used it to construct something which was shipped out of state, you probably donât owe use tax, but you might.



Based on what I have read from the state's website below, basically if you buy supplies for constructing your merchandise you sell, if you bought it without paying sales tax, you owe use tax on it even if you're shipping it out of state. I would suggest you call the tax office and ask them, then at least you'll have the best answer.

Sources: http://mi.gov/taxes/0,1607,7-238-43529-154427--,00.html


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