You have to pay sales tax when you sell consignment goods directly to the consumer on a retail basis, but different states have different rules as to what is considered subject to sales tax and what isn't. For example, clothing in Minnesota is not subject to sales tax, according to the state's website, so you, as the retailer, wouldn't have to pay sales tax on an embroidered jacket placed on consignment. Connecticut's website says that the consignor's commission is subject to sales tax, as well as the sale of the consigned product, while Arizona holds that gross receipts from sales of consignment items are taxable as retail sales. Paying sales tax on consigned products may be similar as paying sales tax on the products you own, but check with your state department of revenue for your state's specific rules.

What Are Consignment Goods

You, as the small-business owner of a retail shop, allow products to be placed in your shop by others, such as crafters, artists and artisans, for you to sell. You, as the consignee, do not own the products; the crafter, or consignor, does. When the product is sold, you split the proceeds on a pre-arranged contract basis with the crafter. If the product doesn't sell, you return it to the crafter or mark it down with the approval of the crafter.

Acquire Necessary Licensing

Obtain a sales tax license from the state where your business is physically located. Some cities also require you to get a license and pay them sales tax as well as the state. If you physically sell the consigned goods in several cities and states -- through flea markets for example -- you may need a business and sales tax license for each city and state.

Collect From the Customer

Multiply the price of the product times the sales tax rate and add that to the sales price to charge the customer. For example, if the sale is $100 and the tax rate 10 percent, the customer is charged $110. In Texas and some other states, if the price includes the tax and you have a written statement that says "tax included" posted, the tax is figured by dividing the price by 1 plus the tax rate, and subtracting the result from the price. Using a tax rate just for example of 10 percent, $100 divided by 1.1 equals $90.90, so the sales tax is $9.10. Check with your state's department of revenue to find out exactly what is required.

Calculate Taxes Due

If you sell on consignment in different city jurisdictions, such as at flea markets, add up sales for each city and the state. Multiply total sales by the state's and city's sales tax percentage. Suppose your total sales for Big City came to $1,000, with Little Town at $500, and Middle City adding up to $800. Big City has a sales tax of 1 percent, Little Town 0.5 Percent, Middle City 1.2 percent, and the state is 8 percent. You would owe the state $184, Big City $10, Little Town $2.50, and Middle City $9.60

Write the Check

The state and each city that collects sales tax most likely has a sales report that has to be completed and submitted with the check. That report may have to be submitted on a monthly or quarterly basis even if you had no sales in that city for the month. For example, if you sell dolls on consignment at arts and craft shows and the show is held twice a year in the city, you would only have sales two months of the year.