How Local Sales Tax Works on Cohart

Sellers can set Local Sales Tax for their sales on Cohart. Here's a quick explanation for how it works.

What is Local Sales Tax?

Local governments impose sales taxes on specific products and services sold within their jurisdiction. This tax is sometimes referred to as city or county sales tax.

If the sale is local or in-person (eg. at an art fair), local U.S. sales tax may apply and the rate depends on the city/state. The seller can include the percentage for their local city in the invoice order. This does not apply to online sales.

How is Local Sales Tax amount calculated on Cohart? 

The Local Sales Tax (LST) amount in US$ will be calculated based on the LST rate, set by the seller, depending on their city/state.

To get the LST rate, the seller can use online tax calculators such as TaxJar or Wise, and apply the LST rate to their orders. The LST amount is calculated based on the order subtotal after discounts. 

How Do I (the Seller) Set the Local Sales Tax Rate?

Set a Default Local Sales Tax Rate

1. Navigate to the Edit Profile tab of your Dashboard.
2. Toggle on Local Sales Tax (In-Person Sales).
3. Set your Local Sales Tax Rate.

This LST rate will now apply for all regular artwork checkout and invoice orders on Cohart. Don't forget to toggle this option back off after you are finished with the local sales.

Set Individual Local Sales Tax Rate for Invoice

1. Create an invoice or click on the Quick Sell button in App.
2. Toggle on Local Sales Tax (In-Person Sales).
3. If you have already set the default rate from your profile, it will be applied here.
4. You can add or adjust the rate for that specific invoice as necessary.

This new rate will only apply to that particular invoice and will not affect other sales.

Other Options

• Include Tax in the Listed Price: Factor sales tax into your artwork prices so that buyers pay a single, tax-inclusive amount.
• Add Tax on Top: Calculate and charge the sales tax separately at the point of sale.

Frequently Asked Questions

How should I handle Local Sales Tax?

Cohart is a platform facilitating payments between artists and buyers, but we are not a local business and do not collect or remit sales tax on behalf of artists.

Using California as an example: Artists should be aware that California requires sales tax (e.g., 8.63% in SF) to be collected on applicable in-person transactions. If you are selling directly at the fair, you may need to collect and remit sales tax yourself to the California Department of Tax and Fee Administration (CDTFA). Sales tax is typically reported and paid through CDTFA’s online system.

Certain buyers, such as designers purchasing artwork for resale, may be exempt from sales tax if they provide a valid resale certificate. Artists should keep a copy of these certificates for their records in case they need to document tax-exempt sales.

For additional guidance, visit the California Department of Tax and Fee Administration (CDTFA) or consult a tax advisor.

Does Cohart provide support with taxes?

Artists are responsible for their individual income tax obligations in their respective countries. Since tax laws vary, we cannot provide personal tax advice. Since sales are processed directly through Cohart's platform, you don’t need to create an additional invoice for the buyer.

However, if you do need any additional documentation for your own tax purposes or for your own records, you’re welcome to generate an invoice addressed to Cohart if that helps with any VAT reporting on your side.