[Financial] Traditional artists, how do you handle sales tax for physical commissions?
Hello everyone! I'm working on opening commissions traditional commissions online where I would ship the client the final piece. But I'm really lost trying to figure out the sales tax thing, and I'm wondering how other traditional artists have their commissions set up to handle that. (Also I'm USA based)
For some context, I am already registered with my local department of revenue and pay quarterly sales taxes for the in-person markets I sell at. I'm just really confused about how you handle sales taxes for out-of-state sales that I don't have a physical presence in.
I've been reading various articles on sales and use tax, so this is my understanding:
Sales tax is the percentage of the sale that needs to be paid to the local region where the sale occurred. For online sales, this would be where the client is located and receives the final product. But then there's Economic Nexus, where if you don't have a physical presence in that state, and you don't hit that state's threshold of sales/profit (which I don't expect I'll be hitting), then you're not responsible for submitting sales taxes for that state?
Use tax comes in when the seller is not responsible for paying the tax (like an out-of-state sale), but taxes still must be paid for that product, and the client becomes responsible to pay. So in this case, I think that would mean that the client would need to state the purchase on their own tax return? Or am I completely off on that? Honestly, I still don't fully understand use tax.
I know some people sell their commissions on an e-commerce site which would handle the sales tax for you, but I honestly don't want to deal with the fees. Plus I wanted to have the commissions linked to my portfolio site, and have full control of the look/set-up. Also, I was planning on taking payments through Paypal invoices. I think that's a standard way of taking payment for commissions?
So TL,DR: When you do a traditional commission and mail it to an out-of-state client, how are you handling the sales tax?