It seems like an appropriate day to write about taxes. What do taxes have to do with weaving? Not much, unless you have a weaving business.
As a responsible citizen, I like to pay my taxes. Well, I don’t like it really, and I’ll take every deduction my amazing tax person Carolyn tells me I can take, but I understand the necessity. It’s a price I’m willing to pay for paved roads, public schools, and a fire department that comes when I call. Also National Parks - I really like National Parks.
Being a law firm administrator, I’ve prepared - or overseen the preparation of - tax returns for income tax, property tax and sales tax. Also city business licenses, which are a tax, even if they don’t call it that. It’s a hassle, but part of the cost of doing business.
When I started my little weaving business, I decided that I was going to be legit - registering a DBA, getting a city business license (which was incredibly frustrating - my city doesn’t seem to want people working from home), registering with the state Board of Equalization. All this means that, if I sell in California, I charge sales tax. My business is tiny, so it’s a hassle, but not much of one.
Most of my sales are through Etsy, and outside of the State of California, so that means that most of my customers don’t pay sales tax. But that’s about to change. Congress is poised to pass a law that will require online sellers to charge sales tax based on the buyer’s location. So if I sell to Michigan, I charge Michigan sales tax, if I sell to Oregon, I charge Oregon sales tax. Except that Oregon doesn’t have sales tax.
Now I understand that this won’t really be a problem for a giant like Etsy. They already have the algorithms and charge California sales tax for me. But what if I were to decide sell directly from my website? Sure, there’s going to be software that will calculate the taxes for me - but I will have to collect them, prepare returns, and send them to up to 45 different states (I should be so lucky). And yes, there will be companies that will do that for me for a fee - just another cost of doing business!
But wait - it gets more complicated! Because state sales tax laws are weird. Some things are taxable, some are not. For example, if I go to Green Thumb and buy a six pack of flowering plants, I pay tax. But if I buy a pack of, say, green beans, I don’t pay tax, because green beans are food. Food in California is not taxable, most everything else is.
I’m a weaver - I sell scarves, shawls, and ministerial vestments. In California, you pay sales tax on all of those things. But there are five states where you don’t pay tax on clothing. Except certain types of clothing that you do pay tax on. There are several others where you don't pay tax on clothing, unless it's over a certain amount. If a minister buys a stole from me, he or she pays sales tax. But there are several state where, if the church buys it, they may not have to pay sales tax.
Expecting micro-businesses to keep track of these laws in fifty states is ridiculous. And expecting us to subscribe to expensive services to be in compliance is an unreasonable burden.