Generally, yes. If your state taxes the item you sell, you collect the tax from the customer at the booth and send it to the state, the same as a store. Pop-up vendor sales tax is state law, so your state sets who registers, who collects and the rate.

Are sales at night markets and events subject to sales tax?

Yes, if the item is on your state's taxable list, because each state decides which items are taxable, who must register and what rate applies, and tax obligations differ at the state and local levels. A farmers' market bread seller asked this on the TurboTax Community in 2020.

"We have a sole proprietorship we've just established to sell home-baked bread at farmers markets in Virginia. But we're supposed to be collecting sales tax when we sell the bread. How do we pay that tax to Virginia State?"

The seller registers with the state's Department of Revenue, collects the tax at the booth and remits it to the state. Whether bread is taxable at all is decided by that state's rules.

Do I need a sales tax permit to sell at a one-day event?

Usually yes. A seller's permit is the state registration that lets you collect sales tax. New York, for example, requires a regular Certificate of Authority, New York's name for its sales tax permit, even if your show sales are isolated or occasional, and it requires registration at least 20 days before you begin business, per the state's sales tax bulletin. Texas requires a sales tax permit of anyone selling taxable items at its fairs, festivals, markets and shows and charges no fee to apply. Check your own state's Department of Revenue website before the event.

Who collects the sales tax, the vendor or the event organizer?

Generally the vendor does, collecting the tax from the buyer and remitting it, meaning the vendor sends the collected tax to the state. New York's sales tax guidance states, "Generally, the seller collects the tax from the purchaser and remits it to New York State." In Texas, the event promoter must collect and remit tax on sales by sellers who have no active permit, and where a market runs a central cash register, the market collects and remits for everyone, under the state's event vendor rules. I would get the organizer's answer on who collects in writing before the event and keep it with the booth agreement.

Does event income go on my income tax return too?

Yes. Event sales are business income, and a sole proprietor reports them on Schedule C, the form a sole proprietor uses to report business profit, with the rest of the year's sales. Report everything — cash, checks and card charges — whether or not any form arrives, per IRS Publication 334. Keep each event's own sales record, since cash register tapes, bank deposit slips and receipt books all count under IRS Publication 583, and keep them with the rest of a food vendor's tax records.

Where the tax goes on Schedule C depends on whether your state imposes it on you as the seller or on your customer. If the state imposes the sales tax on you as the seller, the tax you collect goes into gross receipts, all the money the business took in before expenses, on line 1, and the tax you pay the state is deducted on line 23 as taxes and licenses. If the state imposes the tax on the buyer, the collected tax generally stays out of income.

If you live in California, what do you need to sell at events?

Which California permit do I need for an event?

The permit depends on how many events you sell at in a 12-month period.

• Sell at fewer than three swap meets, flea markets and special events in 12 months, with each location operating less than 90 days, and you need a free temporary seller's permit for each location, per CDTFA's temporary sellers guide.
• Sell at three or more in 12 months and you need an ongoing seller's permit, per CDTFA's home-based business guide, with a sub-permit for each event location under CDTFA Publication 111.

A night market or festival that charges vendors a space fee is a special event under CDTFA's definition, which requires two or more sellers and a space fee or an admission fee. The temporary permit's return is due by the last day of the month after the location closes. Before renting you space, the organizer must get your permit information in writing, and California Revenue and Taxation Code section 6073 backs that with a penalty of up to $1,000 for each offense. The organizer does not collect or remit your sales tax; you report the event's sales on your own permit.

Is my food taxable at a California event?

Hot food is, cold food sold to go generally is not, and sodas always are. Hot prepared food is taxable under Regulation 1603, the rule that decides which menu items are taxable for a California food truck. CDTFA's home-based business guide puts bread and other baked goods sold to go in the nontaxable column. Sparkling water counts as a soda under section 6359. Food sold inside an admission-charged gate to be eaten there is taxable, cold food included. A hypothetical one-night booth sells $1,000 of hot food and $1,000 of cold baked goods to go, figured at the 7.25% statewide rate only, before any district tax at the event location.

California imposes its sales tax on the retailer under Revenue and Taxation Code section 6051, so collected tax goes into gross receipts. The rate is the 7.25% statewide rate plus district taxes, local add-on taxes on top of the statewide rate, where the event sits, per CDTFA's rate page. Registering each temporary location routes the local and district tax to the right place. Look up the combined rate for the event's address with CDTFA's rate lookup tool before the event.

What happens if I don't keep event records?

Without records, CDTFA can estimate your event sales from outside sources. CDTFA audited a California restaurant that also sold food at festivals and large events, including as an approved vendor at an Eid Festival. CDTFA took the events and attendance numbers from a website, assumed the restaurant was the only food vendor feeding every attendee, and estimated $490,700 of unreported event sales. The owners testified they were one of many food vendors at those events, and the Office of Tax Appeals found that assumption unreasonable and cut the event part of the assessment by 20 percent in a nonprecedential 2022 opinion, meaning the decision does not bind other cases, per the OTA opinion. The rest of the assessment stood because no records were kept. Keep each event's sales report, the organizer's vendor list or booth agreement, and the event dates.

N&T Tax & Advisory Group is based in Santa Clarita and prepares tax returns for food vendors remotely anywhere in the US; our food truck and catering accounting page describes the work. To book a meeting, use our contact page.