Accounting question from seller's point of view about Price Listed, Shipping and Taxes.

[atx_leather]

Hello. 
I have a quick accounting question, and I will make it short, I promise.
So I list an item, I sell it and here is the breakdown:
Price Listed: $399
Shipping: $0
Ebay Collected Sales Taxes: $35.41
Ebay fees, (total from Price List + Shipping): $68.50
Net Proceeds from eBay ( eBay Payout) : $330.50


From an accounting standpoint, do I consider my revenue $399 or the net proceed of $330.50 ?

[lacemaker3]

As far as any potential 1099-K that you might receive from eBay managed payments for this ...

They processed $399.00 payment to your managed payments account. That is how much will be included on your potential 1099-K for this transaction.

A 1099-K reflects the Gross Receipts that are normally reported on a Schedule C for someone filing business taxes for an eBay selling business.  A 1099-K according to the IRS rules, includes all payments that are transferred to the taxpayer. That includes purchase price plus shipping (if any). It does not include sales tax that the buyer might have paid, and it is not adjusted for any fees or refunds.

Selling fees, shipping costs, packaging costs and other business expenses including refunds etc. are deducted on other lines of the Schedule C.

[atx_leather]

That sounds correct. Although the payout that was processed to my account was $330.50, if I am not mistaken.  Well I am getting every transaction in a spreadsheet, and will work from there. 
I appreciate the help !  

[monica-sells]

I can answer this question in a literal (actual) sense....

""....Revenue, also known as gross sales, is often referred to as the "top line" because it sits at the top of the income statement....."

So, you can (from your example) say that the actual revenue (top line) is 399.00

(Sales Tax is considered pass-through, however, some accounting firms count it as revenue and deduct it as a line item)

Don't confuse Revenue (399.00) with Profit (330.50)

the fees and shipping are "Expenses"

There is also a COG (Cost of Goods/Acquisition) to consider as well as a myriad of other factors...but this should answer the simple example....

[714ricki]

Revenue $399

[robxznyc]

Both numbers are useful. Which one to use depends on the reporting purpose.

Gross revenue....$399

   EBay FVF.........($68.5)

Net Revenue...$330.5

[atx_leather]

Thank you guys, you all are awesome. 

[simply-the-best-for-you]

You need to familiarize yourself with Schedule C.   Go online & read it.  Literally 10 minutes that is the best thing you can do to put everything in perspective for you!  

[katzrul15]

@atx_leather 

It is the gross of the $399 + Sales Tax = Total Sale (our CPA has us line item the sales tax that e-Bay pays to show it was indeed paid by someone).

Remember too - any returns or cancellations - e-Bay includes those in the GROSS total.  You will need to deduct those in Schedule C, as they will be included in your 1099-k Gross.

[pburn]

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@katzrul15 wrote:

It is the gross of the $399 + Sales Tax = Total Sale (our CPA has us line item the sales tax that e-Bay pays to show it was indeed paid by someone).

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Just to clarify--are you saying the OP should report some figure that includes sales tax, when the sales tax was never part of a seller's payout/proceeds? If one never receives that sales tax money, why would one have to report it anywhere? Ask your CPA next time you chat with him/her. Might be time to shop around for a new one.

@katzrul15 wrote:

Remember too - any returns or cancellations - e-Bay includes those in the GROSS total.  You will need to deduct those in Schedule C, as they will be included in your 1099-k Gross.

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As mentioned in the first reply to the OP's thread:

"Selling fees, shipping costs, packaging costs and other business expenses including refunds etc. are deducted on other lines of the Schedule C."

Always a good idea to reinforce other members' responses, though.

[dbfolks166mt]

    Having done accounting work for 30 years I would never line item the sales tax and then deduct it. From the Federal tax perspective the IRS does not care. However, at the state level they may and it may also raise a red flag on your state return depending on what state you live in.  The reporting and deduction of state sales tax is eBay's responsibility and reported on their tax returns.