-The state of Maryland requires collection and payment of 6% sales tax on all art sales. So when SMAL conducts a show and sale, it would be required to collect the sales tax from buyers and report them on a business sales and use tax filing.
However, as a non-profit 501-c(3) corporation, we are limited in our ability to act as a merchant or art gallery conducting regular retail sales. So, although we collect the sales tax from buyers, we pass on the collected tax along with the price of the art, less a commission, to the artist. In essence, the artist is actually doing the retail sale, not the Art League, which is essentially acting as a cashier for the artist.
It is up to the artist then to report the art sale and pay the sales tax to the state. To maintain our pass-through status, we are to have a record of the sales tax number for the artists in the show, much like a firm doing wholesale has to have a sales tax number of the retailers who purchase from him.
Hence, we request a sales tax number when artists register for a show.
Whenever you sell your work, sales tax should be collected and reported on the required forms (Unless you are selling it out of state). This would apply to any sales that you might have privately, through a library exhibit or other SMAL sponsored event in which you are dealing directly with the buyer.
How to get a Maryland Sales Tax Number.
These are obtained on line at the marylandtaxes.gov web site. You can also come up with a paper form to mail in. The web site is a dense forest of options and will test your determination to obtain a tax number. This multi-step process has succeeded in the past (you can see how we got there) or skip right to #6 – click here https://interactive.marylandtaxes.gov/webapps/comptrollercra/RegistrationType.asp and proceed.
- Go to marylandtaxes.gov on your browser
- Click Online Services in the top menu bar
- Click Business Taxpayer Online Services on the next screen
- Click Business Registration on the next screen
- Scroll to the bottom of the next screen and click Begin Registration
- This at last brings up Registration Type. Click Sales & Use Tax, and Continue
- On the next page, click Sole Proprietor, unless you have formed a legal corporation for your artwork.
- Fill in the rest of the form with the requested personal information.
The Maryland State Arts Council invites area artists to join its free online registry and, for those who sell their work through a Web site, to also opt into its Maryland Art Marketplace. Click here to see more.
Maryland Sales and Use Tax Information
Submitted by George Hamilton
Disclaimer: Blogs are the opinion of the author, not necessarily the St. Michaels Art League
Art sales in the state of Maryland are subject to the state’s 6% sales tax. Key points:
– Artists must obtain a state Sales and Use Tax Registration Number
– Normally sales tax reports and payment are due quarterly on the 20th of the following month, but payment schedules vary
– Remember to phone in a “no sales” return to avoid a penalty for not filing.
– Mark those tax due dates on your calendar.
For more detailed information click here.
Temporary Sales Tax License
A drawback to having a Sales & Use Tax License is that you must file reports 4 times per year, even if you have no reportable sales. The phone line for “no sales” is fairly convenient, but you still have to remember to call and have your Tax ID information at hand. An alternative if you rarely do art shows, is to obtain a Temporary Tax License for each event.
A Temporary Sales Tax License may be obtained by calling 410-767-1543. A temporary license tax return must be filed within 30 days of the event, for which the temporary license was obtained and any tax collected paid to the state. Of course, getting a temporary license year after year is likely to be more inconvenient than obtaining a regular Sales Tax License, and if you do 3 or more events per year, a regular sales tax number is required. The temporary license was primarily created for the out-of-state seller, who comes to an event in Maryland.
If you are interested in taking better images of your artwork, take a look at this website from Richeson75 International Art Competitions: http://www.richeson75.com/
It came to our attention that many of our artists would like to have a website but didn’t know how to go about setting one up. Did you know you could build your own website through Fine Art Studio Online, aka FASO. Many artists use this site as it’s easy to set up and show your paintings professionally. Costs range from $8 to $30 per month. See sample websites here.
Another site used is FineArtAmerica.com. This costs from $0 to $30 per year and also offers prints and giclees of your work. The $30 charge is for an unlimited number of images. The free version has a limit.