How to Collect Sales Tax on Book Sales

If your publisher sells and distributes your book, they will handle the sales tax collection, reporting, and payment.

If, however, you purchase copies of your book at the wholesale author discounted price and sell them (at the retail price) to your customers, you will need to collect sales tax and pay it to the state in which you live.

Here are some steps to make tracking sales tax easy and relatively painless:

1. Set up separate checking and savings accounts dedicated to your business, so you can accurately track and report your book sales. If you already have a business account, report your book sales along with your other business income.
2. Deposit all proceeds from the sales of your book into your business checking account.
3. Pay all expenses relating to selling your book through this checking account as well.
4. Transfer or deposit the sales tax collected into your business savings account so monies are available when its time to pay state taxes. Do not spend the sales tax money on other expenses.

How do I pay sales tax and who is it paid to?

Sales tax is paid to the state in which you live.

• Each state has its own rules and regulations regarding sales and sales tax.
• Contact the Department of Revenue in your state; they can provide you with the forms and information you need for reporting your sales tax and, if required, reporting book sales.
• Typically, if your book is sold to a customer outside of your state no sales tax is required to be collected.

In the Washington State, where our publishing company is located, we not only collect and pay sales tax; we also report and pay tax on the total amount of the retail book sales within our state. (Washington does not have a state income tax).

The WinePress accounting department is always happy to answer questions our authors have concerning royalties and expenses.

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