Consigned inventory is merchandising a Coeur d’Alene business or an individual places with another business for the other business to try to sell. A dressmaker may consign inventory to a dress shop. The person consigning the goods (the dressmaker) has not made a sale and does not get paid until the business that has taken the goods in on consignment (the dress shop) sells the goods.
Tax Implications
For tax and inventory purposes, the consignor (in this example, the dressmaker) has not sold the dress. There is no income to report. The dress inventories. The consignee (the dress shop) has not purchased the dress from the dressmaker until it sells the dress to its customer. The dress shop does not include the dress in its yearend inventory.
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