Yes, most farmers market vendors are required to pay taxes on what they earn. Income from selling at markets counts as self-employment income, which means you report it on your taxes and may owe both income tax and self-employment tax.
The exact rules depend on what you sell and where you sell it. Some states exempt certain food items from sales tax like fresh produce or homemade baked goods while others tax everything. You may also need a seller’s permit before you can legally collect sales tax at a market. Before your first market day, check with your state’s department of revenue and a local accountant to make sure you’re set up correctly.