As an artist, the ultimate dream is to sell your art to others. This is a joyous time! It’s also a financial transaction. What do you need to know about your sale of artwork and sales tax?
Note that the BVAA primarily operates in Massachusetts. The advice given is from a Massachusetts point of view. If you live elsewhere, you’ll want to consult local laws.
The sales tax rate in Massachusetts is 6.25%. This applies to all tangible property. Art – including paintings, photographs, and sculptures – definitely falls into this category. Even if you just sell one painting or photograph across a year you owe sales tax to the State of Massachusetts for that sale. Even if you sell just one bin-art print for $20, you owe sales tax.
Applying for a Vendor License
If you ever sell at festivals or shows where you have a table set up for you then you technically need a vendor license. Even if you have a bin out with your work that would apply. If you ever work with businesses paying you it’s a good idea to have that vendor license. In any case, it’s easy and free to get the license so it’s well worth it. You then get an online interface to file your sales tax.
The place to get your Vendor ID and to then file your sales tax numbers is here –
It’s all straightforward and online. You report how much you sold in total for the time period (usually the previous year). You figure out what the sales tax on those sales would be. You pay it and you’re done.
If the only time you sell art is a one-off situation where a person emails you directly and asks to buy something, then you can go with filing your sales tax on your normal taxes each April. You wouldn’t need a vendor license in that situation.
Sales < $1600/yr
If, across an entire year, you only owe $100 or less from sales tax, you only need to file annually. That would be from earnings of $1,600. If that is all you owe, you can do that on your normal tax form in April. If you have a vendor license, you file that payment amount online once a year.
From the Mass.Gov page:
Businesses and individuals incurring use tax liabilities [under $1600/yr] who are not registered vendors may file Form ST-10 (Business Use Tax Return) or Form ST-11 (Individual Use Tax Return). Both returns are due annually by April 15. Alternatively, individuals may report and pay any Massachusetts use tax due on their personal income tax return, Massachusetts Resident Tax Return (Form 1) or Form 1-NR/PY for part-year residents, or WebFile for Income.
Sales > $1600/yr
If you owe $101 to $1200 a year you need to file quarterly. If you owe $1,201 or more in a year you have to file monthly. Those filings can be done online. Details –
There is never a situation where you earn money from a sale and you do not incur a tax burden for it. If you are paid money for the sale of artwork you owe sales tax on that sale. This includes photographs, paintings, and prints. That is the bottom line of Massachusetts law.
Note that, as an artist, you can claim tax credit for the items you use as part of creating your art. You can get tax credit for your brushes, paints, cameras, ink, paper, and everything else you use to create your final product. You get credit for those items in the year that you purchase them. These purchases can easily offset the burden of your tax payment. However, you have to make sure you file for those expenses. You are the Sole Proprietor of your artistic small business. Ideally you want to set up a separate, free checking account for the artistic projects and ensure those art-related incomes and expenses are tracked separately. That makes the process simple and easy.
Important – from the Massachusetts tax page: Willful evasion of taxes is a felony punishable by a fine up to $100,000 for individuals or $500,000 for corporations and/or imprisonment for up to five years. Willful failure to collect and pay over taxes is also a felony and is punishable by a fine up to $10,000 and/or imprisonment for up to five years.
The bottom line is – pay your sales tax on things you sell! Then properly deduct the cost of your raw materials and supplies on your income tax each year, to offset that sale. If you maintain a separate account it’s quite straightforward to see at a glance exactly what you’ve earned and spent in a given year and handle the taxes based on that.
I highly recommend you set up an Excel Spreadsheet or notebook or SOMETHING at the beginning of the year. Each time you make a sale, jot a note of what you sold, where, and for how much. That makes the end-of-year reporting just so much easier.
Pricing Your Artwork
Technically, you’re supposed to price your artwork as the base price and THEN add the sales tax on top of that at the payment stage. However, nearly no artist I’ve seen at art shows does that. Instead, what they traditionally do is show the price including the sales tax in it.
So, for example, if I sell a print for $20 including tax, that means that the base cost of the artwork is $18.82 and the sales tax of 6.25% was $1.18. $18.82 plus $1.18 equals $20. How did I figure that out?
I divided 20 / 1.0625. That is, I divided the total sale price by the number one plus the sales tax rate (in this case .0625). So if you’re in Massachusetts, just divide your item’s price by 1.0625. You’ll get the base cost of the item. If you subtract that from your total sale price, whatever is left is the sales tax. Any calculator will let you divide your total price by 1.0625. The calculator will then let you subtract that base price amount from your total price.
Artwork Cost: $20
Base Artwork Cost: 20 / 1.0625 = 18.82
Sales tax: 20 – 18.82 = 1.18
So if you wish, you can put those numbers on every sales tag you use in the store.
Note that the Mass website instructs: the tax must be separately stated and separately charged on all invoices, bills, displays or contracts – https://www.mass.gov/guides/sales-and-use-tax – so you should at least make sure you put the base price, sales tax, and then whole total on any receipts you give out. Some artists don’t use price tags at all and handle that verbally with each potential buyer. So this would be a case where that receipt is important, to show the breakout.
You can keep a chart by your cash box which contains all your standard prices ($10, $15, $20, etc.) and what the matching sales tax is for each one. That way you can easily create the receipts.
I highly recommend having a three-part receipt book as part of your art supply set. That way you always keep a hard copy of each sale made with all the details of it. That also means the buyer goes home with a receipt, which they can find helpful.
It’s a legal requirement to collect sales tax with each sale of artwork. The penalties are fairly substantial. It is free to set up the online account and you only have to report once a year unless you sell like gangbusters. It’s easy to report. It’s a good idea to set up a tracking system so this becomes an easy, normal part of your art system!