A booth renter pays $600 per week, a commission artist splits 60/40, and the shop collects a $100 deposit that is forfeited on a no-show. One is rent, one is shared revenue, and one is a liability — and the ledger that books all three as revenue is the ledger that creates a tax and a 1099 problem.
Booth Rental vs. Commission: Who Owns the Sale
Booth rental: The artist is a tenant. The shop's revenue is Revenue — Booth Rental $600 per artist per week. The artist's client payment never hits the shop's revenue — it is the artist's revenue. The shop may collect via the POS as an agent, but it is a pass-through: Dr Cash $500 / Cr Due to Artist $500.
Commission split: The shop is the merchant. A $400 tattoo with a 40% shop split is Dr Cash $400 / Cr Revenue — Tattoo Services $160 (40%) / Cr Due to Artist $240 (60% payable). The shop's revenue is $160, not $400.
Misclassifying a commission shop as a booth rental overstates revenue by 2.5× and invites a sales tax and income mismatch.
No-Show Deposits: Liability Until Service
A $100 deposit collected at booking is Dr Cash $100 / Cr Deferred Revenue — Deposits $100. If the client shows, the deposit applies: Dr Deferred Revenue $100 / Cr Revenue $100. If the client no-shows and the deposit is forfeited under a clear policy, the forfeiture is then revenue: Dr Deferred Revenue $100 / Cr Revenue — Forfeited Deposits $100. Until then, it is a liability.
1099 and Classification
- Booth renters: If the shop provides no schedule, no supplies, and the artist sets prices and keeps client lists, booth rental may be landlord income and the artist is not a contractor for 1099 purposes. But the rent is still 1099-MISC reportable if $600+ and the renter is non-corporate.
- Commission artists: Paid $600+ in a year, the shop issues a 1099-NEC for the artist's share. The shop's revenue is only its split.
Keep Your Finances Organized From Day One
A tattoo shop is a landlord and a merchant in one lease. Booth rental and commission are different businesses on the same floor.
Beancount.io keeps each artist as a counterparty with a pass-through or a revenue split, version-controlled and auditable by the artist and the deposit. Get started for free and make the next chair booked also booked correctly.