Sales tax collection

[stm-embroidery]

Prior to now, any out of state sales that required sales tax collection were done by eBay. 

My most recent sales were billed via my PayPal account and then the tax was deducted to eBay.  I called CS and was informed that this is an "improvement" as it reduces the number of invoices to the buyer.   

This costs me more in PayPal fees as they're based on the total transaction.  Additionally, I'm wondering  how one would document this for reporting/tax purposes.  The total on on receipt issued to the buyer will now differ from actual amount collected.  

This is very new but I'm hoping some folks are looking at this and are sharper than yours truly.  Feels a bit like SOME GENIUS came up with a way to shirk their obligations by screwing the sellers.  

[mam98031]

No - it isn't going to be deducted as an 'expense', it will need to be calculated and deducted from gross INCOME. There IS a difference.

Good point.  Just as you have to adjust your the gross income represented by PP for refunds.

[stm-embroidery]

I think the key distinction here is that the sellers are not required to collect the sales tax outside their respective jurisdictions. 

It's eBay, as a "Marketplace Facilitator" that has that obligation. 

I'm not too pleased with the added headache of tracking this **bleep** and then trying to modify each receipt to reflect the "Hollywood math" caused by this.  If it was a simple fee that eBay charged to cover the tax/fees, it's one thing.  Instead, it's a weird situation where "not tax" is collected (by seller?) and then taken out by eBay???  

[hurryagain]

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@stm-embroidery wrote:

I think the key distinction here is that the sellers are not required to collect the sales tax outside their respective jurisdictions. 

It's eBay, as a "Marketplace Facilitator" that has that obligation. 

I'm not too pleased with the added headache of tracking this **bleep** and then trying to modify each receipt to reflect the "Hollywood math" caused by this.  If it was a simple fee that eBay charged to cover the tax/fees, it's one thing.  Instead, it's a weird situation where "not tax" is collected (by seller?) and then taken out by eBay???  

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@stm-embroidery 

I think that the tax applied to the total charge (hence forth one payment for the buyer) has been done this way to make it easier for the buyer.

Up until a few weeks ago, they were charging the tax separate from the order itself (two charges per order) and that was probably causing confusion for the buyer + the financial institutions look for many small charges as a sign of possible fraudulent activity on an account.

So...they made it easier for the buyer and yes, it is more of a pain for the seller...what else is new...🙄

Online venues are ALWAYS going to make it easier for the buyers...every time...

...Sorry...

[empscientific]

Does anyone else use Godaddy Bookkeeping?  My issue is that this new way of passing sales tax through appears not to be handled properly by their system...  Below is a sample transaction from my account:

As you can see there is a separate transaction imported (which i think should be part of the Split Transaction above) with an ID not related to the Paypal transaction it's found in....  Sometimes this is categorized as Sales Tax Collected, sometimes Sales Tax Submitted.  Anyone else seen this?  Sigh.  I don't know how this is supposed to be, but it seems wrong...

[dfwarehouse]

i currently use godaddy bookkeeping as well. i cant tell if its worth it or to just use seller hub reporting. what do you think?

[mam98031]

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@dfwarehouse wrote:

i currently use godaddy bookkeeping as well. i cant tell if its worth it or to just use seller hub reporting. what do you think?

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@dfwarehouse 

The report you can get in the SH is NOT a bookkeeping program.  It is a report you can get that goes back 90 days for all your sales.  You have to remember to download the report every 90 days as you can't go back any further.  It should be used as a cross check to any bookkeeping program or worksheet you decide to use.

[dfwarehouse]

i find that it does NOT matchup with godaddy at all. is there another program out there at all that you recommend? 

when we show our numbers to the accountant from godaddy. all the sales tax collected, do you feel that was separated out of income? and was already paid to each state?

not sure why we use godaddy, is what im saying, looking for affirmation. thanks 

[mam98031]

i find that it does NOT matchup with godaddy at all.

Then you need to audit the numbers.  Compare them to each other and find what the differences are.  That is the only way to find out why they are different.  Keep in mind that the numbers on the Ebay report or PP if you use them, are the Gross Receipts.  They do not represent cancellations or refunds.

is there another program out there at all that you recommend? 

I've heard that Godaddy is very good, but I've never used them.  I think instead of looking to change you first need to look to understand the numbers.

when we show our numbers to the accountant from godaddy. all the sales tax collected, do you feel that was separated out of income? and was already paid to each state?

If your accountant knows what they are doing, they will figure it out.  If they haven't, then you need a new accountant.  

not sure why we use godaddy, is what im saying, looking for affirmation. thanks 

I can't answer that for you.  How big is your business?  How many transactions do you have per month on the average?  What is your yearly sales [if you want to share that]?

@dfwarehouse 

[anjie234]

Heyyy....   You're right!!  Thank-you very much!

Sellers should not be paying Final Value Fees AND Paypal Fees on 

the sales tax being collected by eBay. (Similar to FVF's charged on 

the SHIPPING amount).  Questionable...  super shady ... biz practices.

And yeah, never gave much thought to it....  It IS a pain that

SHIP COST and SALES TAX COLLECTED are included in SALES AMTS?

[anjie234]

I think there's a great deal of money to be made by eBay...

just in the collection and temporary holding of all those sales tax dollars.

   (they are NOT doing that to "help" us!  There's a whole lot

      of money to be made in interim investing).

THEN add on to that FVF and Paypal Fee's collected from everyone!

{{ WHAT A SCAM!    it's big time **bleep**!!!!! }}

[mam98031]

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@anjie234 wrote:

Heyyy....   You're right!!  Thank-you very much!

Sellers should not be paying Final Value Fees AND Paypal Fees on 

the sales tax being collected by eBay. (Similar to FVF's charged on 

the SHIPPING amount).  Questionable...  super shady ... biz practices.

And yeah, never gave much thought to it....  It IS a pain that

SHIP COST and SALES TAX COLLECTED are included in SALES AMTS?

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There are NO FVFs on Sales Tax.  Ebay does NOT charge it.

@anjie234 

[anjie234]

You certainly got that right!!!
eBay is able to make a great deal of money in the collection and temporary holding of all those sales tax dollars.    (they are NOT doing that to "help" us!  That's just silly!)
THEN add on to that the fees collected from everyone on that money (FVF and Paypal)!
{{ That's some special kinda **bleep**! }}

[anjie234]

Oh, I don't know that 'ebay didn't consider it'!!!

I'm pretty sure they did!

eBay is able to make a great deal of money in the collection and temporary holding of all those sales tax dollars.    (they are NOT doing that to "help" us!  That's just silly!)
THEN add on to that the fees collected from everyone on that money (FVF and Paypal)!
{{ That's some special kinda **bleep**! }}

[anjie234]

I'm tellin' ya... eBay is MAKING $ ON THIS GIG! Lots of it!

[mam98031]

@anjie234 

You certainly got that right!!!

Yes, I'm aware, which is why I shared with you so there was no misunderstanding Ebay does NOT charge a FVF on sales tax.

eBay is able to make a great deal of money in the collection and temporary holding of all those sales tax dollars.    (they are NOT doing that to "help" us!  That's just silly!)

So what!  Ebay is a for profit company, just as sellers want to make a profit.  Ebay has the right to be paid for services rendered.  Would you prefer the alternative where you have to collect and remit sales tax for 38+ states, now that's silly!