Michigan Annual Sales Tax Form

[hodaveracing]

Dear eBay,

My state wants me to report the annual sales tax for 2021.

How do I get a report on the amount of tax you collected and gross figure you reported to my state ?

I closed my physical store front and now you are my virtual store front.

Thanks,

Dave

[silverstatetreasureboxes]

@hodaveracing 

Good morning Dave, my understanding is that you have closed your B&M store? Now you just selling online?

     Ebay summits all sales tax to the state of Michigan if your buyer is from Michigan, you do not do anything.

     Your state is probably requesting your collected sales tax from your B&M store.

[rfmtm]

For online sales, most all states still require you to file your quarterly return whether you owe tax or not and even though ebay or other venues have remitted the tax for you.

You need to run the ebay report for all gross sales for the quarter, not just for what was sold in your state.

https://www.ebay.com/sh/fin/report

Add this ebay total gross sales to any other gross sales you may have made other than on ebay for the quarter, and enter it under Gross Sales.

Also add this ebay total gross sales to any other marketplace gross sales or other deductions for the quarter, and enter it under Exempt Sales.  

Note, you do not have to report the actual sales tax amount collected by marketplace venues like ebay, that only applies to tax you or your company collected from other sales.

Then fill out the rest of the return as you normally would.

[monica-sells]

I concur with @rfmtm 

In my state, I report all my gross sales on the top line....the ebay sales are reported on the exempt line since I am not the responsible agent for those sales 

(this is how I was instructed by my State Tax Authority) 

So, if you have closed your 'in state B&M store', ALL sales amounts would be exempt for your form (since it was all collected on your behalf by ebay) and you would report 0.00 liability

(I am 'assuming' MI was in play all year for sales tax collection by ebay...i think it was)

[iamthecrosseyedcow]

Hi,

Michigan seller here.  I am assuming you are asking about sales tax as a seller, not a buyer.

This probably isn't much help, but when I reported my Sales & Use tax for 2021 in February, I could find no place where eBay breaks out the sales tax they collected and remitted for me by individual state, so I figured mine the old fashioned way, sale by sale with a spread sheet.  Pain in the neck and time consuming to say the least!!    Wiser heads than mine may know how to find a "by state" total figure from eBay.

An added comment.  Be prepared to pay a hefty fine for submitting your Sales and Use Tax form late.  Even though you don't owe anything, the State of Michigan has a fine that increases daily up to $400 total for late filing.  I think it's at the rate of $10 a day after Feb 28, but not positive about that.

[katzrul15]

Yes, it appears OP does need to file for sales and use tax.  And yes, for most States, it is due on or before 2/28. 

While it is almost June, if the amount reported is "zero", typically they will waive the penalty.  Penalty stands if the amount reported is not zero. 

As this is for 1/1/21 to 12/31/21 (typically), only the OP will know what potentially applies. 

@hodaveracing   - there is usually a phone number with the online portal form.  Call them, they can assist.  Good luck!

[monica-sells · Accepted solution]

@iamthecrosseyedcow 

I am not in Michigan, but your post had me concerned that I was mis-informed....

This is from Michigan State FAQ's regarding facilitators....

"...Because a marketplace facilitator that has nexus with Michigan is the retailer who must report and remit
tax under the General Sales Tax Act or Use Tax Act, a marketplace seller should only report and remit tax
on sales made outside of the marketplace. In reporting that activity, the sales made through the
marketplace facilitator that has nexus with Michigan should be excluded entirely from the marketplace
seller’s return, as such sales will instead be reported by the marketplace facilitator..."

I looked over your forms 5095 and 5080, and there was no accomodation for "exempting" sales through a facilitator, but these instructions say to exclude that number (the amount sold through ebay)

what am I missing?

[silverstatetreasureboxes]

@monica-sells 

It doesn't look like you are missing anything, the OP went from a B&M store in which he has to pay quarterly sales taxes to an online venue in which it's ebay and ebay collects the sales tax and whips it over to the mitten state!  That's the way I'm looking at it.

[rfmtm]

@monica-sells  The gross sales through a facilitator is added to both the Gross Sales (from all sources), and  to the Total Exemptions (from all sources).

@iamthecrosseyedcowThe sales tax remitted to each state for each sale is broken out in a column of the exported payment report.  On a spreadsheet you have to scroll well to the right to find it.  You then can sort and subtotal by state to find how much each was paid.  However, this amount is generally only for your reference, unless your state requests it.

[printpeople]

I am also from Michigan.  You simply put a zero on the form as you collected no taxes.

[hodaveracing]

Thank you every body for your suggestions.

I am now in my retirement years, closed my physical store in 2015, selling as a part time job here at eBay.  Since eBay is collecting taxes I filed Form 163 "Notice of Change or Discontinuance"

Checked the "Close Entire Business" box and sent the copy to Michigan's Annual Return Department.

We will see how that plays out.

~ Dave

[hodaveracing]

I sent Form 163 to Michigan's Annual Sales Tax Department.

That form tells Michigan that I am no longer in business with my physical store.

As I see it, since eBay is collecting tax, I no longer need my TR number, less paper work for me.

~ Dave

[rfmtm]

@hodaveracing  Doesn't matter whether you have a physical store or not, or who is collecting and remitting the tax for you.  All states I know of still require a return for online sales whether any tax is due or not.  So make sure you check with your state to prevent any problems.

[hodaveracing]

As mentioned, I sent the store closure notice Form 163 to my state of Michigan.

I will let them sort out the annual sales tax return with eBay. My collection days are over !

In my opinion,  eBay is a side hustle at this point to supplement my retirement.

~Dave

[rfmtm]

If you are just selling personal items, you're fine.  However, if you are still selling as a business online, your state will still require a return, even if ebay collects for you.  Please check with your state or tax advisor to be sure of your reporting obligations.