Monday, July 11, 2016

Let's Talk Money - Taxes, Licenses, & Square

I've posted about my experiences at Denver Comic Con (DCC) already, but something that I wanted to address separately was a first I experienced there. Some events you speak at do book consignments, where you sign your books over to those running the event, they sell them, and they pay you the book sales minus a percentage cut they keep. For this, the event planners have to have or get a sales tax license, and they are responsible for collecting sales taxes and paying them. You have no responsibility to deal with the sales tax in this case; you just collect your check.

At DCC, each author was responsible for selling their own books. I didn't learn this until close to the event, which sent me into a bit of an anxiety spiral, so I thought I'd share what I learned from this experience to help someone else who may go through it.

Special Event Sales Tax License

Because I don't have a sales tax license, not having had solo title books released yet, I had to apply for a special event sales tax license for the state of Colorado, plus one for the city of Denver. Each had a small fee associated with it. I was able to print up the forms online to fill out, then mail the check in with the application. To find those you need to fill out, just do a search on your state/city and special event sales tax.

The state did send me a copy of the license, though I didn't get it until after the event, but Denver did not, and it said online that they wouldn't. So I made copies of both license applications with the checks, and made sure to have them with me at DCC. No one checked, but it did say on the DCC website that they would, so there is always a chance that the venue will check to be sure you're legal. You should be prepared, just in case.

Moolah & Square

The next issue to address was how to take money. Square was quick and easy to sign up for. I just went to their website, filled out the necessary information, and ordered the hardware. The initial piece of Square hardware is completely free, including shipping, so you don't have to invest any money in it at all. I hooked it to my checking account so the money would automatically be moved to my account at the end of the business day. There is also a setting to do an instant deposit, but I figured it would be better to do it all in the evening instead of having a bunch of little deposits. This comes with an additional percentage cost, too. Setting the deposits up involved putting in the bank information, at which time they did a transfer into the account to confirm it, then did a withdrawal of that amount.



I went ahead and also purchased their chip reader, which did have a cost associated with it, but I figured it was an investment for future selling opportunities. Plus, I was in that mindset, because we'd just had to get them for the nonprofit I volunteer for as treasurer, so I wasn't sure if they'd be required by individual business people, as well. (They are being required for businesses.)



Square also had the option to order signs showing you take credit cards, and what credit cards are accepted. That was free, including shipping, so I ordered one of those.

Finally, there was an option to send a link to install the Square Register app, which I had texted to my cell phone. The app installed quickly with no issues, and I went in and fiddled with the settings on there and online, including things like what your receipt will read, and whether you want its appearance personalized.

The next step was to put the sales tax into the Square app. There's an easy spot in the menu to do this. Click on "settings" then "taxes. Click "create tax." Enter the tax amount and give it a name (for instance, I named mine "Denver & State Tax" since that will not be my typical tax amount, considering I reside in Colorado Springs, not Denver.) Once it's in, you can turn it on or off.

When you get the Square hardware, it consists of a white, square-shaped reader that plugs into the headphone jack of your phone or tablet. You then slide a card through the slot on it. The chip reader is a bigger, flat white square with a couple lights on it. It has to be charged, unlike the regular Square reader, so be sure you do that in advance. It comes with instructions in the box for how to use it for swipes or chips. I didn't end up needing it.

Square is super easy to use. You enter the amount of each item, and it will add it up for you. If you have sales tax turned on, it adds the tax to each item as you enter it, and tallies the total at the end, so you will not need to have a separate calculator. When you've entered everything, you select "charge." Select payment type. Then you run the card through.



The customer will have to sign on your phone. Unless you want various fingerprints/smudges on there, you might want to find a simple stylus to use. Luckily, I had one on the end of a highlighter, so I just took that with me. It worked beautifully.

Note that Square takes a percentage of each sale. It differs, depending upon whether you are sliding a card or manually entering a card number (if the reader isn't reading the stripe.)

Cash Sales

The day before the event, I went to the bank to grab some petty cash. I also spent the evening rolling coins from our coin jar so I'd have a roll of each type. You can get money bags at office places like Staples. I had a couple left over from when I did Mary Kay, so I took one of those, but it was just a basic one. There are also locking ones you can get if you want the extra security. And cash boxes. And all kinds of things. Peruse. Choose. Yay.

You can use the Square app as your POS (point-of-sale) system, meaning if you take cash instead of card, you can still enter it into the app, just as you would use a register, and then you click to charge, and select "cash." It lets you enter the money tendered and tells you the change. Woo-hoo! Your cash sales appear with your credit card sales on the reports. It's fantastic! This is also true of check purchases. I did not have one of those, so I don't know if it has you enter the check number or anything like that.

No Signal, No Problem

I had read some comments on the DCC Facebook page before the event saying there were problems with cell phone signals at this venue last year, so I did a little research (Square makes it pretty easy), and discovered that Square can be taken offline if there are issues with the signal. Sure enough, I got there and discovered I had no signal. It was as easy as going into the menu and setting it to offline. It took the credit card payments and stored them in the system, and as soon as I had a signal again, they went through. To set to offline, you go to the menu, click "settings" then "offline mode." Slide the selector so it's on, and move forward with your sales.

Deposits & Taxes

Square automatically moved the money over at the end of the day, and they sent reports each day, so it made it easy to file the sales taxes, which had to be done by the 20th of the following month. I went ahead and did it about a week after the event, just to have it done with. My Denver taxes had to be printed up, filled out, and mailed in. The state taxes were completed online. I spent forever trying to register on their system, only to discover I didn't have to register to do a special event sales tax payment the way I'd need to with regular sales taxes if I had an ongoing license with them. Point being, it was way easier than I thought it was supposed to be. Whoops! It wasn't until I picked up the actual license they'd sent to me that I saw the instructions directing me to a different spot than the regular taxes. So, yeah, totally read all those words on your special event license. Sometimes they have instructions for filing.

Both of these tax types rounded the amount of sales, so my amount was $x.90, and I had to round up to the next whole dollar amount. They each then have a percentage to multiply that amount by, and you enter the amount. That's what you pay. Easy peasy.

Book Signings at Bookstores

I was curious how all this works at a book signing a person is doing at a bookstore like Barnes and Noble, so I asked a friend who has done several signings at bookstores. She said she consigned there the first time, so didn't have to have a sales tax license or POS system, and once her books were returnable to the original order company (usually Baker & Taylor or Ingram), they just ordered them and had them stocked on their own. So once again, no sales tax license or POS system needed. They had the books there already, they handled the payments and taxes, and she did the signings.

So far, in my experience, you'll do consignment at a conference, smaller convention, and possibly at a bookstore, if your books are not returnable to a source company. If your books are returnable, a bookstore or conference will order them for you when you do a signing there, but this means you don't get money paid directly to you. You'll get your royalty check later. It should be noted that I have no idea if they will ever order your books for you at a fan con, but from what I've seen, they will not. And at certain types of fan conventions (I asked a couple friends, and they said it is usually just at the big ones), you'll have to take payments on your own, meaning you have to get a special event sales tax license. You have to take and pay these taxes, even if you paid taxes on getting those copies of the books already. So when I ordered my cheaper copies via CreateSpace, I paid sales taxes, and then when I sold them, I had to charge sales tax and pay it again. You're welcome, government.



I don't know how consistent these methods are, so be sure to always check on your own behalf. This is just intended to give you an idea of what you might be able to expect at various types of events/locations. If you can't find how they handle the books online, and they don't give you that information in advance, give them a call or send them an email and ask. And do so in advance. You don't want to be scrambling for a sales tax license two weeks before the event.

#

Hopefully this saves someone else some time and/or panic. Just a tip: I made myself a sheet with a place to enter the sales amounts, plus tax amounts, totals paid, and method of payment. At the bottom of that sheet, I had the price of each book written down for easy reference, and so I wouldn't have to put stickers on the books as price tags (not all my books had amounts on the back.) You can actually enter each item into the Square register so you just select that item instead of punching in the dollar amount, but I chose not to do it that way. If I were doing bigger sales, I probably would have, but it didn't seem worth the work at the time. I'll have to play with that option before next time, though. I figure I can enter each book/magazine as it comes out, so it's in the system in case I need it.

Have you worked an event where you had to sell your books yourself? Did you know you had to get a sales tax license for it? What do you think of Square? Or do you use a different type of system, like PayPal, which I believe has a reader now? Have your events worked the same as I listed above, or have you found it's different?

May you find your Muse.

*Square images from Square.com
*Uncle Sam Pointing from clker.com, OCAL

22 comments:

  1. I've used Square before. It's easy to set up. I've only been at one venue where I needed to take money though.

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    1. I've only been at one, so far. My signing next month will be consignment. But there's one it looks like I'll be doing later next month, and it sounds like I have to do the Square and get the tax licenses again for Denver. Have I mentioned how much I love consigning?

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  2. I'm hoping to never have to deal with this but so many people have been asking to buy my book from me directly. Ugh. Sales tax. Forms. Bleh.

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  3. I'm with Libby here, but it's great information to have. Thank you!

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  4. Yet another task for writers. It's never-ending, isn't it? But you've got it nailed. Hats off to you.

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    1. I'm usually a quick learner. It's starting to feel more and more like that's a necessity for a writer. So many details we have to work with.

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  5. I have done some signings where I've had to deal with the money myself. Having the Square is a good idea.

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  6. Oh yes, you have to have that sales tax license and if you're really with it your government EIN is needed before that. Each state is different, but they all have websites that'll get you there. Good information and reminders. Once you get the license remember to file out the tax reports - some are monthly, some are quarterly, some are yearly. Be sure you know what you've signed up for. You don't want a penalty!

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    1. Definitely! Tax stuff is scary. It's so important to get it right. I had to call on something, just to confirm a detail, but they were really nice when I called, which I appreciated.

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  7. Great great great info - yuck we have to do this

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  8. Wow, I hadn't even thought about this, thanks for sharing your experience:)

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    1. I hadn't until it came up either. Luckily, I had a friend more experienced than me.

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  9. Great information here! I sell my own books at events and use a cash box for change and a Square for credit card sales. I love the Square. It works great. I recently got the chip reader, but I haven't had to use it yet. I didn't know Square could be used offline if you didn't get a signal, so thank you for that info!

    At places like the Renaissance Faire and VT Comic Con, I brought my own books. They did not order them for me. I have to collect sales taxes for these types of venues, which include craft shows and farmer's markets. I also have books out on consignment at area indie bookstores. They collect the sales tax and pay it to the state. I'm not responsible for it. For book signings at Barnes & Noble, they order the books and stock them and are responsible for the taxes.

    Because I have my own publishing company, I registered with the state of Vermont for a business tax account. I keep track of my book sales and report them quarterly by filling out online forms that calculate how much sales tax I owe. The taxes are then deducted electronically from my business bank account. It's a pain-and-a-half, but necessary. And whatever you do, don't miss the deadline for filing or you'll get fined. Speaking from experience.

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  10. Sales/use tax is something I'd rather let someone else do the collecting on as much as possible. I'd check into the tax you paid double on-you might get credit when doing your EOY paperwork.

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    1. Good point on checking that double tax, thank you! And I'd definitely prefer to let others handle it for me. I wonder how many people turn down speaking engagements because they don't want to mess with this?

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  11. Awesome information. Thank you for this! It is stored in my brain for upcoming events.

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