Commissions made by an artist's booth
By Hank Bulmash | June 4, 2012
Mike asked:
I'm in Ontario, and am an artist with way less than the $30,000 turnover necessary to have to pay HST. My question is when I attend an art show as an exhibitor, I know I have to pay HST on my booth rental, but what is the situation regarding the commission that is retained by the organizers for any sales I make?
Hank Bulmash answered:
As an artist (or any other kind of business person) with annual sales under $30,000, you don't have to register for HST.
The two benefits of not registering are (1) that you don't have to charge HST to your customers, and that makes your prices a little lower and (2) that you don't have the bother or expense of filing HST returns.
The cost of not registering is that you can't claim credit for the HST you pay.
If you registered for HST, you could get a refund for all HST you paid on supplies, occupancy costs, and any other business expenses.
The fact that you're not registered has no impact on whether your suppliers charge you HST. So if you buy paints or materials you do pay HST. The same with you booth rental -- the exhibition company charges you HST, as you mention in your question.
And finally the same is true with the commissions you pay to the organizers of your exhibition. If the organizers are registered for HST (and I assume they are), you will be charged HST on the commissions they earn on your sales. The same would be true if you sold your art though an art dealer. The dealer would charge you a commission or fees, and HST would be charged.
If HST charges are becoming a significant expense for you, you should consider registering for HST. Filing the annual returns is not difficult.