An Introduction to Sales Taxes for Authors

Many authors know about the obligation to pay personal taxes (if you don’t, you’ve been under a rock for far too long), but confusion often reigns when it comes to sales tax issues.

Today, let’s take a look at when authors might (and might not) have to collect and pay sales tax on book sales.

Sales Taxes (and Rules) Vary by State and Jurisdiction

Unfortunately, there is no “one-size-fits-all” rule about sales taxes (except that you’ll have to pay penalties if you don’t collect and remit them when due). Each individual who sells products (including books) is responsible for knowing and obeying applicable tax laws.

BEFORE you sell books in any jurisdiction, make sure you investigate and understand the sales (and other) tax laws that apply to you. Remember: the overview in this article will not excuse your failure to collect and remit any taxes owed on sales you make–you must investigate and understand your obligations before you make the sales–and comply with them afterward.

Third Party Vendors (Like Amazon and Bookstores) Collect and Pay the Sales Tax on Sales They Make.

When your books are sold through third party vendors like Amazon, local booksellers, or event hosts (for example, a conference bookstore), the vendor normally handles collection and remittance of sales taxes due on the sales. This means if your books are sold by third-party vendors, normally you (the author) don’t have to deal with sales tax issues.

Many authors address the sales tax issue by only selling work through third parties who handle the sales taxes. That’s a fair choice, and saves the author the burden of researching and complying with sales tax rules in the different jurisdictions where books are sold. However, for many authors (including author-publishers) selling through third parties isn’t always a viable option.

Before selling books in a jurisdiction (location), contact the local taxing board or authority and learn these important facts:

1. Whether taxes are due on the type of sales the author intends to make. (For example, tax may not be due unless your sales exceed a certain amount.)

2. How much tax to collect. (Usually, this is a percentage of the sales price.)

3. How long does the seller have to remit (send in) the taxes after the sales are made. (Penalties often accrue if sales tax payments are remitted late, so pay attention to the deadlines.)

4. Where should the payment be sent, and in what form. (Many taxing authorities now accept payments online, via the Internet, which simplifies the process substantially.)

5. Do the circumstances of your sales (or planned sales) require you to register for a sales license in the territory? (Authors who regularly sell their own books in their home territories, or who sell a lot of books in any single territory, might need a sales license – call the taxing board and ask.) 

Without knowing the answers to these questions, it’s easy to make mistakes and difficult to collect and pay the tax you owe. 

Remember: sales tax isn’t “automatically” charged on sales of your books. If you’re the seller, you need to know the law, collect the appropriate sales taxes, and remit (send) them to the proper authorities in a timely manner.

This article does not address all sales tax-related issues authors may face. Consult an attorney or accountant, as well as the taxing authorities in territories where you sell books, to ensure you know your rights and obligations.