How to calculate the tax collected

[mythyanlee]

I have a question. How can we calculate the selling tax collected?

Last year it was collected directly by the Paypal.

This month I got an email that Paypal is separated, and the account is solely linked by the Ebay and your bank checking account. 

Then how can we see the tax?

Why are the final fees collected based on an estimate value, but not on the actual selling price?

Many thanks

[7606dennis]

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@fredoniacoinandtreasure wrote:

I'm small potatoes so I only have to report sales tax for in state sales, but as ebay collects and submits that I list that as part of my gross sales but not part of my taxable sales. The only beef I have with ebay on this is that they collect their full fee on the sales tax as well as the rest. Sales tax should not be subject to the FVF, only to the collection fee. 

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Actually, if the sale is made on eBay it is eBay that is responsible for collecting the sales tax in states with marketplace facilitator laws.  Thus any eBay seller cannot be deemed as being "small potatoes" in the eyes of those state's tax people.

[mythyanlee]

Thank you, my friend.

Which states have this "marketplace facilitator laws", including NY, MI, CA?

[chapeau-noir]

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@mythyanlee wrote:

Thank you, my friend.

Which states have this "marketplace facilitator laws", including NY, MI, CA?

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That is easily found with a very brief search.

Happy almost cake day for this thread!

[luckythewinner]

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@mythyanlee wrote:

I have a question. How can we calculate the selling tax collected?

Last year it was collected directly by the Paypal.

This month I got an email that Paypal is separated, and the account is solely linked by the Ebay and your bank checking account. 

Then how can we see the tax?

Why are the final fees collected based on an estimate value, but not on the actual selling price?

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The tax is charged to your buyer at the time the buyer pays based on the shipping address the buyer provides.

The sales tax amount cannot be seen or calculated before the buyer pays, because the buyer does not provide his shipping address before that time.

Once the buyer pays, the sales tax amount is shown in the transaction details for the transaction:

[7606dennis]

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@mythyanlee wrote:

Thank you, my friend.

Which states have this "marketplace facilitator laws", including NY, MI, CA?

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I believe that as of this point in time, five states have not levied a sales/use tax on their residents.  However, I also believe that all other states that do see fit to charge their residents a sales/use tax have also enacted marketplace facilitator laws by now.  These states that do charge their residents sale/use tax include the three states you have mentioned, New York, Michigan and California.

[mythyanlee]

Thank you, friend~~

[mythyanlee]

Thanks

[mythyanlee]

Thanks for your answers.

I am asking, how can I calculate my sales tax in the around 15% fees, if I want to report a personal tax return at the end of the year, do you know this issue?

[luckythewinner]

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@mythyanlee wrote:

Thanks for your answers.

I am asking, how can I calculate my sales tax in the around 15% fees, if I want to report a personal tax return at the end of the year, do you know this issue?

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No, I do not understand your issue. 

eBay collects the sales tax from the buyer and eBay remits the sales tax to the proper state. eBay does not deposit the sales tax into your account or take the sales tax out of your account, and eBay does not include the sales tax amount on the 1099-K form that it sends to the IRS.  

Since you did not collect the tax or remit the tax or get the tax, and it is not reported to the IRS, it should not be reflected in your tax return at all. 

Why do you think you need it for your personal tax return? 

[mythyanlee]

"Why do you think you need..."

I got the "1099-K" some year. Sometimes I did not. So I am wondering maybe the sales tax is included in the fees, or that is another story?

And sometimes the tax and fees are increased 5%, or sometimes the full value is auto charged, or the tax collections are tagged as "TAX collected" but usually not, so I do not fully understand our ebay system. My sales amount is quite small. I am just curious. 

[luckythewinner]

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@mythyanlee wrote:

"Why do you think you need..."

I got the "1099-K" some year. Sometimes I did not. So I am wondering maybe the sales tax is included in the fees, or that is another story?

And sometimes the tax and fees are increased 5%, or sometimes the full value is auto charged, or the tax collections are tagged as "TAX collected" but usually not, so I do not fully understand our ebay system. My sales amount is quite small. I am just curious. 

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I agree, you do not understand the eBay system. 

• You sell an item for $100 and the sales tax rate for your buyer is 10%. 
• eBay collects $110 from your buyer ($100 for the sale, plus $10 in sales tax). 
• eBay deducts $10 from the buyer's payment and sends it to the buyer's state. 
• eBay sends you $100. 
• eBay includes $100 on your 1099-K. 
• You report $100 in income on your tax return. 

So to sum up: 

• The $10 in sales tax has absolutely nothing to do with the payment you receive.
• The $10 in sales tax is not paid by you in your fees. 
• The $10 in sales tax has absolutely nothing to do with your 1099-K. 
• The $10 in sales tax has absolutely nothing to do with your tax return. 

The $10 in sales tax is eBay's legal responsibility. Not yours. 

[mythyanlee]

Thank you.