Collecting and paying sales tax seems simple, doesn't it? I thought so anyway. As a self-published writer, my concept was that I would sell something, collect the appropriate amount of sales tax, and send the money off to the state during my designated reporting period. I never considered that I would also need to pay sales tax on the books I gave to my family and friends.

Here is the scenario:
 I used lulu.com to publish my novel and bought the book at cost. Lulu did not charge a sales tax, which is correct because the book became part of my inventory. When I gave one copy to my mom and another copy to a prizewinner in a drawing, I took the books out of inventory and converted them to personal use. That made me the "final consumer" of the books, which meant I owed sales tax on the price I paid for them.
 
I learned this bit of information and more at a free sales tax workshop last Wednesday. If you do business in Kansas, you may want to check for times and locations of future workshops at http://www.ksrevenue.org. The workshop also covered record keeping, withholding taxes for those who have employees, and compensating use tax.

If you live and have a business outside Kansas, check your state's website for similar workshops. The best time to get this information: before you start the business. That way you can jot down the gifts to Mom, Dad, Uncle Joe, and the city library as you give them. Remember: Taxing agencies love clear and accurate records, and they make your life easier, too.