mam98031 • Volunteer Community Member • Buyer/Seller since 1999
Ebay just made an announcement on the announcement board regarding this, but I know that many don't regularly visit the announcements and/or aren't signed up to receive an email update for announcements. So this thread is just an effort to keep us informed on changes that we should be in the know about.
Here is the announcement and then the link.
On October 1st, we announced changes to the way taxable transactions are processed and how taxes are collected for remittance, and those changes are now live.
Starting now, the way taxable transactions are processed and how taxes are collected for remittance will change, as follows:
- In states where eBay is required to collect Internet Sales Tax from buyers, order totals sent for processing will reflect the gross order amount inclusive of tax.
- Once settled, the tax amount will be automatically deducted for remittance to the applicable taxing authority.
- A record of the sales tax portion of the order will be available on the Seller Hub Order details page and through our Download order report.
Please note the applicable tax will continue to be paid by the buyer and you do not need to take any action.
We understand that the holiday selling season is nearly upon us and we are working to make this transition as smooth as possible.
Learn more about Internet Sales Tax in the eBay Seller Center. If you have questions about how Internet Sales Tax may affect you, we recommend consulting with your tax advisor.
Note: These changes do not apply to sellers currently enrolled in managed payments.
As always, thank you for selling on eBay.
@corvettestainless wrote:Please note the applicable tax will continue to be paid by the buyer and you do not need to take any action.
Readers need to note: the above portion of the announcement is probably NOT a true statement for most sellers.
Sellers will need to 'keep track of' (on a possible daily basis) the amount of tax that is being REMOVED from ebay from your paypal account, as paypal will issue you a 1099 with the 'gross' amount you collected. The AMOUNTS REMOVED by ebay for buyers taxes around the country, will be a TAX DEDUCTION for your Federal and State Income Tax as this, in essence, is a 'false' profit, if you don't "capture and deduct" this money at tax time.
Yes absolutely. All sellers should keep complete, detailed records even if they aren't big enough to get a 1099 from PP or MP/Ebay. Even those that don't qualify for 1099's should be reporting to their states and of course there are those pesky income taxes. So good records are key.
@mam98031 wrote:Ebay just made an announcement on the announcement board regarding this, but I know that many don't regularly visit the announcements and/or aren't signed up to receive an email update for announcements. So this thread is just an effort to keep us informed on changes that we should be in the know about.
Here is the announcement and then the link.
On October 1st, we announced changes to the way taxable transactions are processed and how taxes are collected for remittance, and those changes are now live.
Starting now, the way taxable transactions are processed and how taxes are collected for remittance will change, as follows:
- In states where eBay is required to collect Internet Sales Tax from buyers, order totals sent for processing will reflect the gross order amount inclusive of tax.
- Once settled, the tax amount will be automatically deducted for remittance to the applicable taxing authority.
- A record of the sales tax portion of the order will be available on the Seller Hub Order details page and through our Download order report.
Please note the applicable tax will continue to be paid by the buyer and you do not need to take any action.
We understand that the holiday selling season is nearly upon us and we are working to make this transition as smooth as possible.
Learn more about Internet Sales Tax in the eBay Seller Center. If you have questions about how Internet Sales Tax may affect you, we recommend consulting with your tax advisor.
Note: These changes do not apply to sellers currently enrolled in managed payments.
As always, thank you for selling on eBay.
Funny, I saw the first announcement of this a while back and thought it said it was going live November 1st, so I was checking our sales from over the weekend and didn't notice that anything had changed. I went back and re-read that original announcement and realized it just said "in November", so I was going to post here to see if anyone knew when it would start. Then I saw a sale come through a little while ago with the tax the new way, so I figured the answer was "now" and sure enough the announcement was updated. 
For anyone wondering, here's what it looks like now both in seller hub and in PayPal.
@autopiacarcare wrote:
PayPal will presumably include the tax amount in your 1099K. But also, based on the way it is displaying in PayPal right now, you should be able to easily see in PayPal reports the amounts deducted and sent back to eBay. That should make it easier to deal with come tax time, but not as easy as not having to deal with it at all.
For reference, here's how it appears in a downloaded report from PayPal. Looks like they are calling it a "Partner Fee" and they have a reference ID that links back to the original transaction.
How easy and decent it could have been for Paypal to move their fee down ONE line? I know it's usually a small amount but we sellers are squeezed in every direction and now pay fees on money we never even see!
