This article answers commonly asked questions about Sales Tax for Buy Now and Make Offer for U.S. sellers.
How are U.S. sales taxes calculated?
Artsy uses a third-party API to calculate sales tax, which the collector pays at checkout. Please make sure all of your business addresses are updated and accurately entered into your Artsy CMS locations, as this is essential information used by the API. Learn more about adding a location in CMS here. You are responsible for remitting applicable taxes.
Can U.S. sellers turn on tax collection in custom states?
Yes, a U.S gallery can turn on tax collection in individual states themselves by adding a business address in the "Locations" section of their CMS, and selecting "Sales tax nexus" as the Address type. If you do not have a business address in that state, you can add just the state.
How do I know if I have economic nexus in additional states in which I don't currently have a business address? Is it based on my sales on Artsy, or total sales volume in that state?
In general, we advise you to speak to a tax advisor to understand if you have economic nexus in states in which you don't currently have a business address. Typically, once you surpass a certain threshold of sales in a given state, you have economic nexus in that state, regardless of your business locations. The thresholds for determining when economic nexus kicks in vary from state to state, but in general they are based on total sales into that state (and not just sales on Artsy). Once you determine if you have economic nexus in a certain state, you can turn on tax collection in that state by adding a business address in the "Locations" section of your CMS, and selecting "Sales tax nexus" as the Address type. As a note, if you do not have a business address in that state, you can add just the state.
Will Artsy send tax forms such as a W2 or 1090 at the end of the year for tax purposes?
These forms are specific to employees and independent contractors who are paid wages or a fee by a company for their services. As such, neither of these will be sent by Artsy at the end of the tax year.