Question
I am hosting an art giveaway, and I am not sure what sales tax needs to be paid on, and what can be deducted as a business expense.
I am an artist, and my expenses for the giveaway would be around $10-75 depending on what the winner chooses. However, the artwork's value would be around $200-500 once I create it. In South Carolina, I am required to pay sales tax on a giveaway that I do. My question is, do I pay sales tax on the expenses, or the value once the artwork is created? Additionally, do I just deduct my expenses? It doesn't make much sense to me that I would potentially have to pay sales tax on $500 but then only be able to deduct $75.