Odds are, you became an arts or crafts vendor because you have passion and skill for your trade. The reality of turning a hobby into a career, however, is that you must combine your passion and skill with business acumen, such as purchasing the right vendor insurance.
If you’re serious about being an arts and crafts vendor, you’ll need to learn the business side of the equation. Without this knowledge, your capability to effectively sell your goods will be severely limited.
As an arts and crafts vendor, you’ll need to understand three things:
- State Taxes
- Income Taxes
- Vendor Liability Insurance
STATE TAXES
As an arts and crafts vendor, you aren’t working a typical nine-to-five and selling mass-produced goods across a cashier’s desk. Unfortunately, this doesn’t absolve you from familiarizing yourself with unique state and federal laws about both sales and income tax.
Sales tax:
- Must be collected on every sale (in most states)
- Should be either incorporated into your prices or calculated into the transaction
Before you go to any show or event, make sure to check out the tax requirements of the state where you’re operating. (A comprehensive list of state government websites can be found here.) You should also contact the proprietors of the event to make sure that you’re compliant with any county tax laws.
INCOME TAXES
In terms of income tax, you’ll need to keep detailed records of all transactions. If you’ve made more than $400, the net income from your work should be reported on your form 1040.
A quick note: If possible, working with a tax professional can give you the security of knowing your taxes are filed correctly and that you filed all allowable deductions.
VENDOR LIABILITY INSURANCE
Vendor insurance is a necessity for arts and crafts vendors. It’s your safety net should you have property stolen or damaged†. Alternatively, you may cause damage to the space you’ve been given. And, of course, a less than sure-footed and over-litigious attendee may trip in your booth and decide to sue.
Instances such as these have the potential to derail your business and drain your finances. Unfortunately, this happens enough that most event organizers now require their vendors to carry insurance and name them as an additional insured.
This, of course, is where ACT Pro liability insurance comes in handy.
Our annual Pro Policy covers:
- General liability
- Product liability
- Online marketplace sales
- Unlimited event coverage
- Optional theft and damage coverage
- Optional professional liability
- Optional cyber liability
Optional liability coverage and increased limits are available for additional premiums.
Our ACT Go vendor insurance allows you to register for a single event or purchase up to 90 days of coverage. Its benefits include:
- General liability
- Medical expense limit
- Damage to rented premises
- Nationwide coverage
- No deductible on liability claims
- Free unlimited additional insureds
This policy is perfect for vendors who only attend a few events a year. The ACT Go policy doesn’t have the same breadth of coverage as the ACT Pro policy, but it will cover most general liability claims and satisfy the event administrators’ insurance requirements. (If you’re not sure which policy is best for you, compare them here.)
The “business” side of being an arts and crafts vendor can be overwhelming for the unprepared. However, if you’ve readied yourself with good vendor insurance and know how to approach your sales and income taxes, you’ll be able to focus on what really matters: your art.
†This coverage is only available through the ACT Pro Policy.
All insurance policies have conditions, limitations and exclusions. Please refer to the policy for exact coverages.
