Having been a very trusting child who suffered badly from a sense of 'let down' by the truth (not so much about Santa as about fairies), I tried not to lie to my children. As I didn't want to spoil the fun my line was "Some people say that......Santa comes..../....the tooth fairy takes your tooth and leaves money..../etc.
Then they could look at the evidence and spin their own theories/fantasies, and when the time came to know the truth it was a game we'd played.

By 2 yr old grandson saw Santa at a Christmas party last week - didn't like him one bit. And people he meets keep telling him that Santa's coming. ???