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How to handle sales tax in the path of totality


 If you're going to make sales to celebrate the eclipse, be sure to comply with your state's tax rules.

Millions of Americans and international visitors are making their way to the 2017 solar eclipse path of totality, which stretches from Newport, Oregon, to Charleston, South Carolina. For many, witnessing the moon fully cover the sun on Aug. 21 will be a once-in-a-lifetime experience. It’s sure to rock at least a few worlds.

Officials in the 13+ states in the path of totality have created web pages with information and tips for residents and travelers. The Oregon Department of Transportation advises travelers to be able to address their own basic needs (food, water, gas, and bathroom breaks), as local businesses may not be able to meet the demands of all. South Carolina’s Department of Public Safety reminds motorists to expect travel delays and “not stop in the roadway to view the eclipse.” The Nebraska Department of Transportation expects people to search for “the best view away from clouds” during “this celestial event” and cautions, “Don’t wear ‘eclipse glasses’ while you’re driving.”

It’s all good advice, and it’s relatively easy to find online. Less readily available is information for people planning to capitalize on the darkening of the sun. But make no mistake, states expect anyone making sales during this special event to collect and remit the appropriate sales taxes. Introducing a temporary tax on eclipse sales was even proposed in Oregon, which doesn’t have a sales tax.

Wyoming was the first state department of revenue to talk about taxing the solar eclipse. The countdown to totality has begun, but so far only the Wyoming Department of Revenue and the Idaho State Tax Commission have excelled on this front.

Wyoming

With approximately 350,000 eclipse watchers anticipated in Wyoming, the department expects locals to take advantage of the inherent money-making opportunity by “selling T-shirts, souvenirs, or prepared food.” It reminds residents to obtain a temporary business permit and charge the proper tax rate on sales of taxable goods. Returns and payments are due no later than Oct. 2, 2017.

Idaho

The Idaho Tax Commission underscores that the state’s 6 percent sales tax must be applied to sales of food, T-shirts, and souvenirs, “even if you’re selling for only one day or a few days.” Local sales tax may also apply. Temporary sales tax permits are available from the tax commission, and anyone making sales in cities with local sales tax should contact city officials directly to ensure all requirements are fulfilled. Additional information.

Other states

It may be more challenging to learn what’s required to make temporary sales in other states, but it’s essential. According to the Nebraska Department of Revenue, “Individuals or businesses operating a temporary business location in Nebraska have the same Nebraska tax obligations as those operating a permanent place of business in this state.” Anyone selling taxable goods or services also needs to register with the states of Georgia, Kansas, Kentucky, Illinois, Iowa, Missouri, North Carolina, South Carolina, and Tennessee, even if the sales are temporary.

If selling T-shirts this weekend and on the day of the eclipse leads to a full-time gig, tax automation software can help facilitate sales and use tax compliance. Learn more.

photo credit: skyseeker Total Solar Eclipse 2016 in Indonesia via photopin (license)


Gail Cole
Avalara Author
Gail Cole
Gail Cole
Avalara Author Gail Cole
Gail began researching and writing about sales tax in 2012 and has been fascinated with it ever since. She has a penchant for uncovering unusual tax facts, and endeavors to make complex sales tax laws more digestible for both experts and laypeople.