Ebay collecting sales tax, but the DOR saying it wasn't paid

[hb_treasures]

I have an LLC in my state, and Ebay started collecting and remitting sales tax for my state this year.  I sent in my quarterly taxes showing the  amount ebay collected and remitted for me (with the help of my cpa). Now I got a notice from the DOR saying the sales and use tax wasn't paid. I contacted the DOR and they said they don't see it being paid. So am I supposed to not report this amount quarterly?This is all new for me and any tips/suggestions owuld be greatly appreciated. THanks!

[luckythewinner]

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@hb_treasures wrote:

I have an LLC in my state, and Ebay started collecting and remitting sales tax for my state this year.  I sent in my quarterly taxes showing the  amount ebay collected and remitted for me (with the help of my cpa). Now I got a notice from the DOR saying the sales and use tax wasn't paid. I contacted the DOR and they said they don't see it being paid. So am I supposed to not report this amount quarterly?This is all new for me and any tips/suggestions owuld be greatly appreciated. THanks!

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Without knowing what your state is, I doubt anyone here can give you difinitive answer for how your state handles sales taxes. 

My understanding of most Marketplace Facilitator  laws is that the sales tax obligation for these sales falls on eBay, and they are the ones who collect and remit the sales tax. 

I do not think eBay sends a separate payment to your state with your tax ID number on it. 

You might try looking up your atate on a website like this: 

https://www.streamlinedsalestax.org/for-businesses/marketplace-facilitator

[hb_treasures]

Sorry. My state is North Carolina. Ebay just started collecting and remitting for me in Feb this year so its all very new

[luckythewinner]

The link above give thes answer of NO to this question for North Carolina: 

"Is a Marketplace Facilitator required to identify sales made on behalf of marketplace sellers separately from its own direct sales on its return?"

So it sounds like your DOR does not require eBay to report sales under your tax ID.

[hb_treasures]

I missed the 2nd half of your message before. So it sounds like my DOR would receive 2 payments then? One from Ebay... and then one from me. Basically they  get paid twice? 

[pburn]

@hb_treasures 

Frankly, I'd be looking for a new CPA. Good luck walking back this SNAFU with the IRS.

[grasscarp]

I am in North Carolina too. Ebay collects and submits my NC sales tax to Raleigh automatically. I do not tell NC DOR how much tax was collected in my behalf as you said you did. That's why we pay ebay those fees!!

I file a quarterly form E-500 with zero tax due.  Since my NC sales are below the monthly minimum requirements I can do it quarterly. I make a copy of the sales invoices as I ship the NC orders. So for 3 months they just stack up and then I add all the sales (item sale price, shipping charges, etc) at the end of the quarter.

Then I report the quarterly sales on line #1 --- "North Carolina Gross Receipts" (do not include tax collected).

Then I report this same amount on line #3 -- "Receipts Exempt From Sales Tax".

All other lines I enter zero (0).

If you do this, you will get a total tax due of $0.00 on line #21 on the form E-500 for no tax due.

Then I submit the form and I immediately get a NC DOR confirmation number and email.

Of course I have no other NC sales to report - just the ones on ebay!!

Here is the link that I use. Good luck.

https://eservices.dor.nc.gov/sau/contact.jsp

[pburn]

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@pburn wrote:

@hb_treasures 

Frankly, I'd be looking for a new CPA. Good luck walking back this SNAFU with the IRS.

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 Editing comment to read:

Frankly, I'd be looking for a new CPA. Good luck walking back this SNAFU with the IRS and/or NC DOR.

[mam98031]

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@pburn wrote:

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@pburn wrote:

@hb_treasures 

Frankly, I'd be looking for a new CPA. Good luck walking back this SNAFU with the IRS.

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 Editing comment to read:

Frankly, I'd be looking for a new CPA. Good luck walking back this SNAFU with the IRS and/or NC DOR.

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IRS not likely a problem, but DOR is.

[mam98031]

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@grasscarp wrote:

I am in North Carolina too. Ebay collects and submits my NC sales tax to Raleigh automatically. I do not tell NC DOR how much tax was collected in my behalf as you said you did. That's why we pay ebay those fees!!

I file a quarterly form E-500 with zero tax due.  Since my NC sales are below the monthly minimum requirements I can do it quarterly. I make a copy of the sales invoices as I ship the NC orders. So for 3 months they just stack up and then I add all the sales (item sale price, shipping charges, etc) at the end of the quarter.

Then I report the quarterly sales on line #1 --- "North Carolina Gross Receipts" (do not include tax collected).

Then I report this same amount on line #3 -- "Receipts Exempt From Sales Tax".

All other lines I enter zero (0).

If you do this, you will get a total tax due of $0.00 on line #21 on the form E-500 for no tax due.

Then I submit the form and I immediately get a NC DOR confirmation number and email.

Of course I have no other NC sales to report - just the ones on ebay!!

Here is the link that I use. Good luck.

https://eservices.dor.nc.gov/sau/contact.jsp

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Great information that should help the OP.  

FYI in the state I'm in, we do have to report the sales in which Ebay [or any other marketplace] collects and remits sales tax for.  Then we are allowed to take the deduction for the amount they paid.  So the laws will vary state to state.

[mam98031]

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@hb_treasures wrote:

I missed the 2nd half of your message before. So it sounds like my DOR would receive 2 payments then? One from Ebay... and then one from me. Basically they  get paid twice? 

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NO absolutely NOT.  If I were in your position, I would through this right back on the CPA that you had do your taxes to fix.  They should have known the laws for your state, so they created the mess.  So they should fix this issue for you for FREE.

[hb_treasures]

The problem is there's some sort of disconnect between Ebay collecting and remitting vs it showing on my tax ID. I spoke to my CPA about this earlier and realized that on the return, we indicated that xxx f the xxx due was already paid.  So then the NCDOR looked up to see where it was paid and they're showing it not being paid. I just started managed payments in August so i'm not sure if this will help or hurt the situation. And I'm not sure if maybev I messed something up on Ebay where I didn't have my tax Id on there if it was necessary for this to show on the NCDOR side of things. My sales and use tax amount due is a little  over $100 and a $10 fine which I have 30 days to pay. I am totally okay with paying this and being done with it. But now I don't have a clue how to pay my taxes for July - Sept? Just pretend as if ebay and other platnforms are not remitting for me?

I know this is an Ebay forum  but I also sell on Poshmark, Mercari, and Amazon. Amazon has my EIN but  Mercari and Poshmark do not... so it seems as if at the very least I would still have ot pay taxes on the Mercari and Poshmark sales in my state

[mam98031]

Did you read through post #7?

[postingid7659]

IRS has nothing to do with sales taxes, not sure why people posted that.

The less the state knows the better, they know now these sales took place so they want their money.  eBay probably pays one lump sum at whatever interval the state requires, with no indication what sellers it's on behalf of.  So I agree with post #7, you should be showing no taxes due on your filing to the state.  

I guess I have it easy in my state, I fall under a threshold where I only have to report and pay once a year, and once reported for three years it's permanent, they won't audit it.  eBay's made my life easier since they collect and remit the few in-state sales I have, I only have to report when I set up at a swap meet or flea market.   

[grasscarp]

Let me add that the only reason that I file a E-500 form for NC DOR is because I have a "Sales and Use Tax" registration number. I buy wholesale and/or tax exempt items for resale. 

If I did not have a NC tax number I would file no forms with NC DOR - ebay does all that for us. 

Keep in mind that ALL sales and ALL taxes are included in statements from ebay and PayPal. When you do your yearly income taxes you can then deduct the taxes from your sales.

Good Luck!!