Help! Do I need a resale license or permit?

[Former_Member]

I have my first ever craft fair and I've already paid for the booth. I started making scarves as a hobby and now I have so many I'd just like to sell them! I don't want to start a business...just making some extra money doing something I like to do. I live in North Carolina. I've done some googling, but it's still rather confusing to me. Any help would be appreciated!

[Former_Member]

Probably can not be of much help as I am in another state. I can give you a basic of what TX requires. I have been doing a particular market for over 20 years, I go for 5 days every month, there are over 5000 vendors there. I have had the same spot all these years. The management is required by the state to have our sales tax permit number on file. Representatives come around every few years just to check to see if we have our permits visible to the public.
In TX you can file for a sales tax permit but that does not mean you ever have to use it.
You probably need to check with you state comptrollers office and see what is required.
Do not let any of this make you nervous, it is all very simple. Even if you are selling your items at a show and you are asked to show your permit all they will do is fill out the paperwork there on the spot and you will have your sales tax permit.
Once again, this is how it is in TX. Hope someone else can reply to your question that is in your state.
Hope you have a great show.

[GlassyGrace]

If you state has a sales tax, then most likely you are required to collect sales tax on your sales at a craft fair and send it into the state. You could just call your state Revenue office sales tax division and just tell them what you said above and see what they say. Sometimes, it's easier than googling to just talk to a real person.

[Former_Member]

Even as a 'hobby' if you are selling to the public, in most places you do need to have a business license.

I'd suggest that you contact your local state tax office to see exactly what is required.

[PrairiePrimitives]

Some states (California being one) allow "casual sellers" to not get a sales tax permit. Go to your state's web site and look for a link titled (something like) "Doing Business In ..." There may also be a direct link to the tax/sales tax dept. of your state.

This may not, however, be what Uncle Sam has in mind when it comes to your federal income tax. There's a line on the 1040 form for "Other Income" and any money you make selling your "hobby" is supposed to be reported there. The MAIN difference between hobby and business on your federal taxes is that a hobbyist needs to report their GROSS INCOME but a business only reports their PROFIT. A business owner ALSO must fill out Schedule C and keep some records to justify the numbers they enter on that form.

[Former_Member]

Oh wow! Thank you all for your wonderful feedback! I love this forum!