The short answer
In most states, if you sell taxable goods at a fair or market, you need a sales tax permit (also called a seller’s permit, resale certificate or sales tax license) and you need to collect and pay sales tax, even if you only sell a few times a year and even if it is a hobby.
Five states have no statewide sales tax: Alaska, Delaware, Montana, New Hampshire and Oregon. Alaska still has local sales taxes in many towns, so check there too.
Where to get a permit
Your state’s department of revenue (sometimes called the department of taxation, the comptroller or the franchise tax board) issues sales tax permits. Search “[your state] sales tax permit” and use the .gov site. Most states issue them online, and many are free or cost a few dollars.
If you sell at an event in another state, you may need a temporary permit there. Many states have a special event or temporary vendor permit for exactly this. The fair organizer usually knows; ask them.
What’s often exempt
Many states don’t tax groceries, which often covers raw produce, eggs, honey, and unprepared food sold by the pound. Prepared food that is ready to eat, like a cup of coffee, a sandwich or a slice of pie, is usually taxable even in those states.
Some states exempt farmers selling their own produce, seeds and plants, or exempt sales by nonprofits and school fundraisers. Crafts, clothing, jewelry, candles, art and merch are almost always taxable where there is a sales tax.
Because every state draws the lines differently, look up your product category on your state’s site rather than assuming.
What rate to charge
The rate is usually based on where the sale happens, so at a fair it is the rate for that town, which can include state, county and city parts. Your state’s site has a rate lookup by address.
Online sales that ship can follow different rules: some states tax by the buyer’s address. Small sellers below a state’s economic nexus threshold (often $100,000 a year in sales into that state) usually only collect for their home state. Check the rules for each state you ship to once you grow.
Tax-included or tax-added prices?
At markets, many vendors use tax-included prices: a $20 item means $20 total, and the vendor works out the tax from it later. It keeps the table simple and the math fast.
If you do that, the tax is inside the price. At 6.35%, $20 tax-included is $18.81 of sales plus $1.19 of tax. Set that tax aside after every show so the filing doesn’t surprise you. Check that your state allows tax-included pricing and whether you must post a sign saying so; most do allow it.
Keeping records
Your state will ask for your total sales, your taxable sales and the tax you collected, usually monthly, quarterly or yearly depending on how much you sell. Some also want sales broken out by location.
Keep a record per event: date, place, total sales, and how much was taxable. SnapCart keeps every order with its items and time, and you can export your sales, which makes filing a matter of adding up the right rows.
Income tax is separate
Sales tax is money you collect for the state. Income tax is on your profit, and it applies whether or not you collect sales tax. Keep receipts for supplies, booth fees and mileage, since they reduce your taxable profit.
Payment apps may send you a 1099-K for business payments above the IRS reporting threshold. That form is a report, not a bill; your profit is still what you pay tax on.
Who to ask
Your state revenue department’s small business line is free and answers this exact question every day. The market or fair organizer knows what other vendors do locally. Your local Small Business Development Center (SBDC) offers free advising. For your own situation, an accountant who works with small businesses is worth one meeting.