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consignment sales tax

updated tue 6 jul 99


John Baymore on mon 5 jul 99

One of my consignment accounts, a local coffee bar that has been selling my
mugs and other coffee-related wares, has stopped collecting sales tax on
slaes of my mugs. She said her accountant told her it is my responsibility
to pay the tax as the mugs are still my property.


Well... the good part of this news is that the store is not looking at your
consigned inventory as THEIR assets =3Cg=3E. Is there a consignment law in
your state or do you have a written consignment agreement?

The interesting part of this is....why the sudden change? Is this their
way of telling you that they don't want to handle your work anymore.....but
don't have to say that directly to you? Are they in financial trouble and
looking for pennys? Do they have a new manager/owner that is so greedy
that he/she is looking to rip off the few cents in sales taxes and make a
killing on 20 years of compound interest on the pittance it'd generate =

My guess is that it might be that your product is the only non-food item
they sell retail. The tax situation on the pots is probably different from
taxes on food. So it does generate a special recordkeeping issue for them.
If the sales are minimal, then it might not be worth it for them to
continue to handle the pieces due to the recordkeeping time involved. If
that is the case....they should just say so and be done with it.

Call your state government offices and ask them about the sales tax thing.
Laws differ state to state. Generally speaking...... the selling point
(retailer) collects retail sales taxes, not the manufacturer. In some
localles.... manufacturers get hit with other taxes. Some strange details
of consignment laws in your state may make this LEGAL....... but pretty
absurd. What are you supposed to do.... come into the store every time
there is a sale? Or is it you are supposed to eat the tax out of your part
of the selling price?

Does the shop take a commission? I assume they do. So they are clearly
SELLING the pieces and making some money on the retail transaction....not
you. You get paid by them..... as the manufacturer. They just have the
benefit of a MOST generous set of terms from their manufacturer..... pay me
when you sell the objects. I would think the tax laws do not differentiate
between consigned and wholesaled objects in retail establishments.

If they don't want to be bothered collecting the tax (read this as PAYING
the tax)....... and it still IS legal in your state not to do
that.......pull your stuff. Actually , in thinking about've basically just been given a clear message about how
valuable they feel you and your work are and a little about how much
respect you get from them. I'd just pull the stuff and find a new venue.
Poetic justice would be to set up something with their main competitor =

At the least, I'd let them know that you will therefore no longer consign
there...... it is now wholesale or nothing. Then they have to collect the
sales tax and you don't have to eat it out of your prices. Their response
to that will tell you how much they actually value your pieces as a
contribution to their buisiness.



John Baymore
River Bend Pottery
22 Riverbend Way
Wilton, NH 03086 USA


=22Earth, Water, and Fire climbing kiln firing workshop Aug. 20-29,1999=22