Your payment report tells you how much sales tax you collected, but not always the sales behind it. When it's time to file, you usually need both numbers, and digging through every transaction to rebuild the sales total is nobody's idea of a good evening. This short video shows the free Reverse Sales Tax Calculator at reversesalestax.us, which needs no sign-up.
How It Works
- Pick your state. The state the sales were in.
- Type in the tax. The sales tax figure from your report.
- Read the original sales amount. It works backward to show the sales behind that tax.
Check your rate. Local rates can add to the state rate, so confirm with the state before you file.
Why You'd Need It
A lot of craft fair vendors don't add a separate tax line to every sale. Customers pay, you move on to the next person, and the tax gets sorted out later from whatever the card reader or payment app reports. If that report shows the tax but not a clean taxable sales figure, working backward from the tax gets you there.
The Other Direction
Reverse sales tax can also mean starting from a tax-included total and splitting out the tax. My earlier post on how to back-calculate sales tax from a total walks through that formula with an example. To go forward, from a sale amount to the tax and total, use the sales tax owed calculator.
The calculator does the math. Whether you need to collect tax, what's exempt and how to register are questions for your state's revenue department or a tax professional.
Part of VendorTools
This is one of the VendorTools tools, a set of free calculators and checklists for craft fair and market vendors. You can see the rest in my VendorTools hub post. If you want to track every show, your sales and your costs in one place, that is what FairKeep is for, and my FairKeep overview covers what it does.
More short how-tos on the VARØ Industries YouTube channel.
More short how-tos on the VARØ Industries YouTube channel.