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Old 10-01-2008, 08:43
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Default Tax question on consignment sales

Ok - say you are consigning items at a store and you get 70% and they get 30%. When a customer pays for the item, they pay tax to the retailer. So when you go to report your earnings and pay your taxes, do you pay tax on the entire retail price or just on your 70% earning? Does that make sense?
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Old 10-01-2008, 09:22
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Default Re: Tax question on consignment sales

I would think you only pay on the 70% because thats all you are getting.
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Old 10-01-2008, 09:27
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Default Re: Tax question on consignment sales

you pay it on the amount you receive.
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Old 10-01-2008, 09:56
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Default Re: Tax question on consignment sales

Are you talking about sales tax or income tax?
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Old 10-01-2008, 11:24
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Default Re: Tax question on consignment sales

I guess I am talking about the sales tax I have to pay to the state when I sell things. Hodw does the income tax thing work? Sorry to be clueless.
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Old 10-01-2008, 11:43
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Default Re: Tax question on consignment sales

If I sell on consignment and the consignment store charges tax and keeps the tax meaning all I get is my 70% then it is the responsibility of the shop owner to report and pay the sales tax since they are keeping the tax on the whole amount. NOW income tax is different than sales tax.
At the end of the year you will report the 70% that you received from sales as your income. When you turn in your sales tax reports you will report 0 unless you actually receive the tax that was collected on the sale. Does this make sense???
It was so confusing to me at first also. I remember countless emails and phone calls to the irs with questions. I hope this helps

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Originally Posted by wmfjones75 View Post
I guess I am talking about the sales tax I have to pay to the state when I sell things. Hodw does the income tax thing work? Sorry to be clueless.
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Old 10-01-2008, 11:54
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Default Re: Tax question on consignment sales

You do not need to claim your consignment earnings on a sales tax for your county. You will need to claim the earnings if they are more than 600.00 per year as income. Most consignment boutiques do not send a 1099 to there consigners. If they make the check out to you personally, I would not claim it as income.
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Old 10-19-2008, 12:21
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Default Re: Tax question on consignment sales

I pay sales tax in KY and this is what I do: When it comes time to pay sales tax and I am filling out the worksheet, the actual money I received from the consignment shop is reported as Exempt Sales. It is exempt for me because the consignment shop collected the sales tax on it and they have a resale certificate. Same as wholesalers...if wholesalers buy from me and they have a resale certificate, I do not charge them sales tax.
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