Tax season is here, and if you sold at craft fairs last year, you need to report that income. But here's the good news: craft vendors can deduct a LOT of expenses. This guide covers everything you need to know about taxes as a craft fair vendor — from sales tax collection to income tax deductions that can save you hundreds (or thousands) of dollars.
Do I Need to Pay Taxes on Craft Fair Income?
Yes. All income from selling at craft fairs is taxable, regardless of the amount. Even if you only did one fair and made $200, the IRS considers that self-employment income. There's no minimum threshold — if you earned it, you report it.
There are two types of taxes craft vendors deal with:
- Income tax — Federal and state taxes on your profit (revenue minus expenses)
- Sales tax — Tax collected from customers at the point of sale and remitted to the state
Let's break down each one.
Sales Tax: Collecting and Remitting
Do I Need to Collect Sales Tax?
In most states, yes. If your state has a sales tax (45 states do), you're generally required to collect it on retail sales of tangible goods. The five states with no sales tax are Alaska, Delaware, Montana, New Hampshire, and Oregon.
To collect sales tax legally, you typically need a sales tax permit (also called a seller's permit, resale certificate, or sales tax license). This is usually free or costs a small fee from your state's Department of Revenue.
What About Out-of-State Fairs?
If you sell at craft fairs in other states, you may need a temporary or event-specific sales tax permit for that state. Rules vary:
- Some states offer temporary event permits for visiting vendors
- Some require full registration even for a single event
- The event organizer may handle sales tax collection (rare, but it happens)
Pro tip: Check with each state's Department of Revenue before you go. Many have online portals where you can register quickly.
How Much Sales Tax Do I Charge?
Sales tax rates vary by state and locality. Use the rate for the location of the sale (the fair's address), not your home address. Some cities and counties add their own tax on top of the state rate.
Tools like Avalara or TaxJar can help you look up exact rates by zip code.
Income Tax: Reporting Your Craft Fair Earnings
How to Report Craft Fair Income
Craft fair income is reported as self-employment income on your tax return. You'll use:
- Schedule C (Form 1040) — Profit or Loss from Business
- Schedule SE — Self-Employment Tax (Social Security and Medicare)
Even if craft fairs are a side hustle, you report this income on Schedule C. The IRS doesn't care if it's your full-time job or a weekend hobby — if you're selling with the intent to make a profit, it's a business.
Self-Employment Tax
In addition to regular income tax, self-employed individuals pay 15.3% self-employment tax (covering Social Security and Medicare). This applies to your net profit (revenue minus deductions). The good news? You can deduct half of your self-employment tax on your 1040.
Quarterly Estimated Taxes
If you expect to owe $1,000 or more in taxes, the IRS wants you to pay quarterly estimated taxes rather than waiting until April. Due dates are:
- Q1: April 15
- Q2: June 15
- Q3: September 15
- Q4: January 15 (following year)
Use Form 1040-ES to calculate and pay quarterly estimates.
Tax Deductions for Craft Fair Vendors
This is where it gets good. You can deduct all ordinary and necessary business expenses from your craft fair income. Here's a comprehensive list:
🎪 Booth & Event Expenses
- Booth fees and jury fees
- Canopy, tent, weights, and sidewalls
- Tables, chairs, and display fixtures
- Signage and banners
- Lighting and extension cords
- Tablecloths and display props
📦 Materials & Supplies
- Raw materials (fabric, wax, wood, clay, etc.)
- Packaging (bags, boxes, tissue paper, labels)
- Tools and equipment
- Shipping supplies (if you also sell online)
🚗 Travel & Transportation
- Mileage: 67 cents per mile in 2024 (check current IRS rate)
- Tolls and parking
- Hotel stays for out-of-town fairs
- Meals while traveling (50% deductible)
- Trailer or vehicle expenses used for business
Important: Keep a mileage log! Record the date, destination, purpose, and miles driven for every business trip. Apps like MileIQ or Everlance make this easy.
💻 Technology & Services
- Credit card processing fees (Square, PayPal, Stripe)
- Website and domain costs
- Software subscriptions (accounting, design, email marketing)
- Phone and internet (business-use percentage)
- Photography equipment for product photos
📣 Marketing & Branding
- Business cards and promotional materials
- Social media advertising
- Email marketing tools
- Product photography costs
- Logo design and branding
🏠 Home Office Deduction
If you use part of your home exclusively for your craft business (a dedicated studio or workshop), you can deduct a portion of your:
- Rent or mortgage interest
- Utilities
- Insurance
- Property taxes
The simplified method lets you deduct $5 per square foot (up to 300 sq ft = $1,500 max). The regular method calculates the actual percentage of your home used for business.
📚 Education & Professional Development
- Craft classes and workshops
- Business books and courses
- Industry conference fees
- Professional organization memberships
🛡️ Insurance & Legal
- Business liability insurance
- Product liability insurance
- Legal and accounting fees
- Business license and permit fees
Record-Keeping Tips
Good records are the foundation of stress-free tax filing. Here's what to track:
Income Tracking
- Record sales from every fair (cash + card separately)
- Keep a log: date, event name, location, total sales
- Save all Square/PayPal/Stripe reports
- Track online sales separately if you also sell on Etsy/Shopify
Expense Tracking
- Save every receipt (photograph them immediately — paper fades!)
- Use accounting software (Wave is free, QuickBooks Self-Employed is $15/mo)
- Separate business and personal bank accounts
- Get a dedicated business credit card
Mileage Log
- Date of trip
- Destination and purpose
- Starting and ending odometer reading
- Total miles driven
Common Tax Mistakes Craft Vendors Make
- Not reporting cash sales: All income counts, even cash. The IRS knows craft fairs exist.
- Missing deductions: Many vendors overpay because they don't track expenses. That $300 canopy? Deductible. The $50 in gas to get there? Deductible.
- Mixing personal and business: Use separate accounts and cards for your business.
- Not saving for taxes: Set aside 25-30% of your profit for taxes throughout the year.
- Calling it a hobby: If you sell regularly with intent to profit, it's a business. Filing as a hobby means you can't deduct expenses against income.
When to Get Professional Help
Consider hiring a tax professional if:
- You made more than $10,000 from craft fairs
- You sell in multiple states
- You have employees or contractors
- You're unsure about a deduction
- You're being audited (get help immediately!)
A good accountant who understands small business can save you far more than they cost. And yes — their fee is tax-deductible too.
Key Tax Deadlines for 2026
- January 31: Send 1099s to contractors (if applicable)
- April 15: Individual tax return due + Q1 estimated payment
- June 15: Q2 estimated tax payment
- September 15: Q3 estimated tax payment
- January 15, 2027: Q4 estimated tax payment
The Bottom Line
Taxes might not be the fun part of selling at craft fairs, but they don't have to be scary either. The key is simple: track everything, save your receipts, and deduct every legitimate expense. Most craft vendors are surprised by how many deductions they qualify for — from mileage to booth fees to that new canopy.
Start tracking now, and future-you will thank present-you come April. Candle vendors can use WickSuite to automatically track material costs, booth fees, and mileage — making tax time much easier.
Plan Your Next Fair
Now that you've got the tax side covered, it's time to focus on what matters most: finding great fairs and making sales. Browse craft fairs on TheCraftMap to discover events in your state, check application deadlines, and build your 2026 show schedule.
And remember — every booth fee, mile driven, and supply purchased is a potential deduction. 🧾