When I started crafting for selling at venues, I realized that I needed to have a business name, registered for a small fee, that I had to decide whether to be sole proprietor or an LLC, and jump through the State’s hoops to get an EIN and pay state taxes. Toward the end of last year, I received a notification from our county asking me for an inventory and a list of my equipment used which they used to bill me Personal Property taxes.
As I also like to vend at a couple of out of state fiber retreats, I have to register my business with those states and pay their state sales taxes as well, thus another set of applications and more hoops.
I don’t understand why organizers of craft shows, festivals, and retreats don’t let the applicants/potential vendors know that this is a state requirement and that there really is no exception, that fines of $100/day up to $1000 are real possibilities for not doing so. I think that many vendors operate under the misconception that if they are doing it as a hobby and selling things they make or if they make under a certain amount each year that they aren’t a business. It would be nice if the states recognized Cottage Industries and exempted them from the red tape, but it isn’t so.
Once the hoops have been cleared, it isn’t such a big deal.