| T O P I C R E V I E W |
| kitchensqueen |
Posted - Feb 11 2007 : 5:51:17 PM
Okay, as many of you know, I'm the process of launching my Etsy site and fledgling crafts business, and I'm wondering about the legality of it all. A few questions:
-- Do I have to report Etsy earnings on my taxes?
-- If I am selling food products on Etsy or at farmer's markets, do I need food service certification or permits?
-- To sell at craft fairs or farmer's markets, do I need to hold limited liabilty insurance?
http://apartmentfarm.wordpress.com
Opening in March 2007:
http://shadetreestudios.etsy.com |
| 5 L A T E S T R E P L I E S (Newest First) |
| abbasgurl |
Posted - Feb 11 2007 : 7:39:34 PM
Amanda,
I have a small business that is similar to yours. I have a website, a booth at a local antique market, & do festivals and shows selling my handmade items.
Legally, yes, you should be reporting your income from etsy with your federal & state earnings. You should also be registered with the state of IL to collect & report your sales tax. I sell in IL and have found them to be very friendly & helpful when I have phoned with questions. The State's Department of Revenue website is also very easy to use for reporting your sales tax. IL's sales tax can be a little tricky in that different counties, and even cities, charge a different sales tax rate. You will need to find out the rate for any city/county you sell in, by giving the DOR a call. If you cross over into IN you will need to register with the IN DOR as well. These things are easily done and mostly free. To obtain a tax ID, which will allow you to buy supplies at wholesale and without paying sales tax, costs $25 in IN, not sure about IL. You register for that in the state you reside in.
IL tax site is taxillinois.gov
The IL telephone number is: 1-800-732-8866 or 217-782-3336 (weekdays between 8-4:30)
IN tax site is www.in.gov/dor/
The IN telephone number is: 317-233-4015 (weekdays 8:15-4:45)
I see you are in or near Chicago, so you should be in Cook County. For regulations concerning food products you should call the Cook County Health Department. Each county regulates it's own food sales. To sell in my county (Lake, IN), you must cook and package foods in a county approved kitchen, and have proof of doing so. There are many county approved (inspected) kitchens you might consider using. A resturant after hours, a church, school or daycare kitchen are all examples of this. I have a freind who bakes in her church's kitchen during off hours and sells her baked goods at the farmers market here.
As far as insurance. Your homeowner's insurance will not cover you when you do shows away from home. It usually covers a small number of in home shows per year (check with your insurance agent). So if you have a show in your home, say twice a year, you are covered-kind of like having a garage sale. You are covered because it is a temporary one time event.
Some shows are now requiring vendors to carry liability insurance. I have priced insurance and the cost is prohibitive for me, and for most part time crafters I talk to. You are looking at about $600. per year with some shows requiring you add a rider naming them as co-insured for their event. The additional rider is around $75. for the day or weekend. Any venue that holds an event is responsible for injury on their property. The promoter carries liability insurance for that kind of thing. Your personal insurance will cover theft, damage and any liability not covered by the promoter/event.
In my booth at the antique market I was advised by the owner not to carry insurance. His insurance covers all accidents or injury to customers. If my inventory is lost to fire, theft or otherwise damaged, it's my loss. I keep about $2000 worth of inventory there, the amount of risk I am willing to take.
Bottom line on insurance is, what risk are you wiliing to take. How careful are you willing to be in setup? Does your event/promoter also carry insurance? Do you do something which might pose a danger to customers or event goers, such as using heat or open flame? Also, what is the best price can you find on insurance and what EXACTLY does it cover? And of course, can you afford the insurance? Will it be cost effective?
If any of you know of a company that insures artists & crafters for reasonable rates, PLEASE pass on the information. I'm sure Amanda would appreciate it, as would I!
These things can seem a bit daunting at first Amanda, but just take one step at a time & they are really no big deal. If you have other quetions I'd be happy to help if I can.
Rhonda
I'm a one girl revolution. |
| willowtreecreek |
Posted - Feb 11 2007 : 6:54:55 PM
The best thing to do would be to contact you local extension service or a local small business attourney. Each state is SOOO different and there really is no easy answer or easy place to look!
Jewelry, art, baskets, etc.
www.willowartist.etsy.com
www.willowtreecreek.com |
| kitchensqueen |
Posted - Feb 11 2007 : 6:29:06 PM
I've tried googling my state's regulations, but it's all so confusing. Is there a website I can go to for information?
http://apartmentfarm.wordpress.com
Opening in March 2007:
http://shadetreestudios.etsy.com |
| GaiasRose |
Posted - Feb 11 2007 : 6:17:51 PM
In a lot of states, however, up to a certain amount of income can be counted as sale of a craft, and doesn't have to be reported, but it IS a good idea.
Check your home owners, some policies will cover you are places like craft fairs and farmer's markets. Also, if you are selling clothing or food in some states, you are not required to charge sales tax...
~*~Brightest Blessings~*~
Tasha-Rose
Blogs: http://gaiarose.wordpress.com
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Homepage: http://mysticwoodsfarm.com
http://gaiasrose.etsy.com
Birth is safe, interference is risky; TRUST BIRTH |
| willowtreecreek |
Posted - Feb 11 2007 : 6:08:45 PM
Yes you must report Etsy earnings.
I am not sure about Etsy's food service regulations you will need to check on your individual state requirements. My state has regulations but makes special allowances for things like Farmers Markets. If you are selling fruits and vegetables you are fine without. If you are mixing things together or cooking things to be consumed you must have a special liscence and have an inspected kitchen.
Again I believe Liability insurance is optional but depends on state regs and requirements of individual craft fairs. I WOULD carry it. You never know what can happen. I was at a craft fair last year and a pole came of a canopy and hit a lady in the head. She wasn;t hurt but could have been.
Jewelry, art, baskets, etc.
www.willowartist.etsy.com
www.willowtreecreek.com |
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