Possible Tax Problem

[ginzokid]

I received this yesterday: "In November 2006, the Canada Revenue Agency (CRA) applied for and received a Federal Court Order requiring eBay Canada to release account information and sales data of Canadian PowerSellers for the 2004 and 2005 years. Our records show that you are among this group. In February 2008, the Federal Court of Canada affirmed its ruling in favour of the CRA. Subsequently, eBay launched an appeal of the decision which is scheduled to be heard on October 8, 2008 before the Federal Court of Appeal. Please know that eBay takes user privacy very seriously and is contesting this Order. If, however, eBay loses this appeal, it will be required to release the requested user information to the Canada Revenue Agency. As yet, no information has been released to the Canada Revenue Agency. We will advise affected members by email if we are forced to release their information. However, because we know this matter will be of concern to our members, we felt it was important to provide you with this advance update. Additional information and the answers to some commonly-asked questions are posted at www.ebay.ca/powersellerinfo. If you have additional questions about this situation, you may email powersellerinfo@ebay.ca. We remind sellers that they are responsible for ensuring that they are in compliance with all laws and regulations relating to their activities online. Please note that a change in PowerSeller status at this time will not alter our information disclosure requirements, if we lose this appeal. Protecting our users' privacy is of the utmost importance to eBay, and we continue to vigorously defend your rights through this appeal. As more information becomes available, we will keep you updated." Now this might mean that I would have to pay income tax on the money I received from the sale of all my used N scale equipment. I don't have any proof of the original cost and of course most of the stuff was sold at a loss. Then I would have to figure in the cost of operating a business out of my home; postage, electricity, employee salaries, etc. In other words, this is just plain nuts! I hope none of you have to face this BS. Canada Revenue is just getting more greedy! X-(

[ginzokid]

After two long days of compiling records and comparing sales and loses, I have an overall loss, so there should be no income tax. The real concern is the sales tax that has to be paid regardless. I'm going to check if I had to collect sales tax if the sale was out of the country, but that may turn out to be fruitless. Yesterday I also received more information from eBay. In other words, more research is needed to fill in the missing sales from their first transmission. I predict another long day or two. So as I said before, I'm going to start charging sales tax. That should kill a lot of sales, don't you think? More research is needed. B-) I just found this in the CRA code. Is it a loophole for me to use? And how do I prove that most of these sale went out of Canada? "Exported goods Goods (other than excisable goods such as beer and tobacco) that are ordinarily GST/HST taxable supplies may be zero-rated if they are exported from Canada. This means that you do not charge GST/HST on taxable sales if you deliver the goods or make them available to a purchaser outside Canada." More paperwork and research....... B-) -- Edited by ginzokid at 11/24/2008 4:00 AM PST

[dl85vette]

Funny how you see other auctions and they have georgia residents pay XX% sale tax or Such and such province must pay tax or gst I can't remember.

[barrysfp45]

I guess everything you sold either went to the states or Australia, just my thoughts anyway, I do know if anyone buys in their home state in America then they have to pay sales tax, go over the line and no tax, another little US quirk. ]:)

[taz-of-boyds]

I think the state is not allowed to collect tax from a business in another state (a state sovereignty issue?), only in its own state. Though they are working real hard to get around it. http://www.nysscpa.org/cpajournal/2008/808/essentials/p48.htm I think they really want to get you Pete, using the suggested retail sales price may not make them happy, since things can be sold at a discount. Just their way of saying "Merry Christmas ya filthy animal." Charles

[barrysfp45]

So Charles you been home alone a lot lately:^O ]:)

[ginzokid]

New info received direct from the CRA. I do no have to worry about the sales tax of 15% because I am not a registered company and did not sell a minimum of $30,000 worth of goods per year. What they are really after is my supposed income from the sales. I can, with a lot of effort, prove that these sales were a net loss from what I originaly paid for the items sold via my inventory list which they said they would accept. Thankfully Paypal has the records that I need and I am in the process of reading on line each and every transaction of money received and comparing that to my inventory sheets. There are hundreds of invoices and it would be just too much to print out as I have to look up each one individually. This also will show that most of my sales went out of Canada, but that is not a problem anymore. I'm on day three of compiling the information. Canada Revenue Agengy......better living through red tape! B-) PS: I will not be adding sales tax to my listings as a result. Horray! -- Edited by ginzokid at 11/25/2008 4:08 AM PST

[taz-of-boyds]

Pete, wow that is great news! So I guess no salt in the wounds... or something like that, Charles. No salt in the wound but lots of salt air and some of it has been "blue" lately around here as you can guess. I'm ready to fight if they decide I'm worth the trouble. B-) -- Edited by ginzokid at 11/26/2008 4:05 AM PST