Sales Tax Guide for Event Organizers and Vendors

Mar 14, 2024 | Blog Posts

One often overlooked business activity that creates sales tax nexus in a state is “temporary sales” in a state. This could include:

  • Closing deals at an industry trade show
  • Selling your books at an author’s fair
  • Selling hand-made jewelry at a big craft fair
  • Selling merchandise at a music festival

As a vendor, you might only travel out-of-state to make sales a few days per year. And we get it. When you’re designing your booth, creating new stock, or preparing your sales pitch, sales tax is the last thing on your mind.

But states see things a little differently. They use sales tax to pay for budget items like hospitals or public transit, and they also make their own rules and laws about what business activities count as sales tax nexus. And states vary widely in what they require.

As an event organizer, you may or may not be based in the state where your event will take place. Regardless if you are familiar with the sales tax laws in your event’s state, you’re generally required to ensure that both yourself and your vendors are sales tax compliant. 

Let’s look at what both event vendors and event organizers need to know about sales tax.

What Event Vendors Need to Know about Temporary Sales and Sales Tax

When it comes to temporary sales, such as at a trade show or craft fair, states can require that your business do any of the following:

  • Register for a sales tax permit just like any other business with nexus in the state
  • Register for a temporary sales tax permit
  • Limit your sales to under a certain amount of days so you’re not required to register for a sales tax permit 
  • Work with the event’s organizers to collect and remit sales tax

Remember, every state is different. Indiana, for example, requires that everyone making sales in a state register for a sales tax permit, no matter if those sales are just for a few days at a trade show. Maryland, on the other hand, allows temporary vendors to apply for a special 30-day sales tax license. And some states, like Kansas, allow small scale vendors who only sell in the state once or twice per year to opt for a temporary permit, while sellers who sell more often are required to register for a “regular” Kansas sales tax permit. 

Of course, this only applies if the products you are selling are taxable. Most tangible goods are taxable. Prepared food is also generally taxable. But some states make exceptions for grocery food and bakery items (like donuts or cupcakes) and clothing. Always check with the state to ensure that your products are taxable.

After Registering for a Sales Tax Permit

If you were required to register for a temporary sales tax permit, you can often remit the sales tax you collected by the filing due date provided by the state and then cancel your permit. 

But if you were required to register for a “regular” sales tax permit that will stay active until you cancel it. There are a couple of considerations here: 

  1. You can generally cancel your sales tax permit after the event – However, we recommend contacting the state and telling them that you were just making temporary sales. They’ll tell you about any special considerations before you cancel
  2. You might consider keeping your account open – Do you plan to sell at the same event next year? You might consider keeping your account open, especially if your account is with one of the states that charges a fee for sales tax registration. You can often call the state and tell them that you only do temporary sales there and they’ll set your filing frequency to one time per year. This makes having an open sales tax account less of an administrative hassle. 
  3. Registration in a state means collecting sales tax on ALL sales in a state – While your sales tax permit is active, you’re required to collect sales tax not just from your customers at the trade show or jewelry fair, but from your e-commerce customers, too. For that reason, if you were required to register for a sales tax permit in a state, be sure you’re not accidentally failing to collect sales tax from ALL customers during the time period your sales tax permit is active. 

Organized event organizers will often include sales tax information for you in your registration packet. But if you haven’t received any info, we recommend that you ask the event organizer what you need to do about sales tax. They are often working with the state to ensure that the event is in compliance. 

And if you have any other questions about temporary sales and sales tax, feel free to contact HOST for a consultation. 

What Event Organizers Need to Know about Sales Tax

As an event organizer, states often hold you responsible for ensuring that your event is sales tax compliant. This means understanding the rules yourself, and then advising your vendors on what they need to know. 

Sales tax is administered by the state, so you’re required to follow the sales tax rules and laws for festivals and events as prescribed by that state. Hopefully in-state vendors will already be sales tax compliant. (Though this is not always the case.) But vendors based out-of-state may not realize that doing business in your state, even temporarily, requires collecting sales tax. 

Some states are obliging and have dedicated resources for festival and event organizers.  When searching for information, note that they may refer to you, the organizer, as the “sponsor” or “promoter.” 

Don’t skip sales tax! Some states require event organizers to turn in a list of vendors so they can check sales tax compliance. It’s also not unheard of for state auditors to visit large gatherings and events in-person to ensure that vendors are being sales tax compliant. 

Last but not least, keep in mind that which products are taxable depends on the sales tax laws in the state where the event is held. If you are holding your event in Pennsylvania, for example, clothing is not taxable. Grocery food and some bakery items are not taxable in other states, while prepared food, such as what you would buy at a food truck, usually is. It’s important to understand your state’s sales tax laws so you can help advise your vendors. 

While vendors are ultimately in charge of sales tax compliance, hosting a non-compliant event, or badly advising vendors, can mar your success. 

Because every state is different, handling sales tax for a large event with many vendors and many different sales tax situations is complex, we recommend consulting with a sales tax expert if you have any questions or run into difficulties. 

Contact HOST for a sales tax consultation and check off one item on your event organizer’s to-do list!