sales tax collected by ebay

[alittlebitofeverything00]

I cant seem to find any answers, from ebay seller support people, I see that ebay automatically charges sales tax on all my listings sold. I do not get that sales tax in payouts and it looks like I pay my percentage fees based on the sale amount including sales tax. My question is if Im getting 1099 and ebay is already collecting sales tax on all the sales I have made, why am I going to have to owe a **bleep** ton of money to the irs after this years sales because none of the sales tax was paid to me? Im confused on how it all works, and if they are charging the sales tax will it say I have collected and paid taxes on my 1099 form they will give at the end of the year? Because in the end I have to submit payment for taxes not them. My accountant isnt familiar with ebay policy on this and asked me to contact ebay but again the multiple reps I have spoken too also do not know. 

[mtgraves7984]

eBay will forward the taxes to the proper states. Less bookkeeping for you. No worries!

[fern*wood]

The ebay collected sales tax, which they remit to the states, is not included in your year end 1099k.

[lacemaker3]

@alittlebitofeverything00 

Yes, to your first statement. The eBay fees are based on the buyer's total payment amount. That is the standard way to calculate money transfer fees, and eBay does the same with their fees.

For the 1099-K, that only includes the total amount that were processed into your managed payments account. It includes the purchase price, plus shipping paid by the buyers. It doesn't include the sales tax because that was not processed into your account.

Sales tax and income tax are completely separate.

• Sales tax is owed by the buyers to their state, on their sales transaction. eBay collects it and submits it to the states.
• Sellers owe income tax to the IRS on the income they received from their selling business (whether it's their main business or a side business).

[monica-sells]

You are confusing apples and oranges....

Sales Tax is a form of use tax that is collected/mandated by most the States in the U.S.

It is computed on a percentage of the Sale for an item, and is added to the total amount. eBay then collects this FOR US, and distributes this tax to the appropriate state and tax authority instead of us (Sellers) having to be responsible for it.

1099K form is an informational form, showing gross sales that would be applied to INCOME TAX (not related whatsoever to Sales Tax),,,these Gross Sales are then reported by us on our annual INCOME TAX Returns, when we adjust this amount using deductions to come up with a taxable income.

[kensgiftshop]

@alittlebitofeverything00 

The sales tax that Ebay collects is different from the income tax you pay every year.

The sales tax they collect is not included on the 1099-K.

The sales tax is paid to the states, not the seller.

[12345jamesstamps]

Do a profit and loss of selling on EBay...like a business.

I let H & R Block do my taxes.

[pburn]

@alittlebitofeverything00 wrote:

My question is if Im getting 1099 and ebay is already collecting sales tax on all the sales I have made, why am I going to have to owe a **bleep** ton of money to the irs after this years sales because none of the sales tax was paid to me? Im confused on how it all works, and if they are charging the sales tax will it say I have collected and paid taxes on my 1099 form they will give at the end of the year?

---

@alittlebitofeverything00 

Not to dogpile on you, but this is very clearly explained on the eBay help page regarding Forms 1099-K:

eBay and Form 1099-K 

What's included in Form 1099-K

As Form 1099-K is an IRS information return, it includes the gross amount of all reportable payment transactions within a calendar year, based on when funds settle to eBay, not necessarily when funds are received by sellers. This amount does not include any adjustments, for example, credits, discounts, fees, refunds, or any other adjustable amounts. This means that the gross amount on your Form 1099-K may not be the final reportable amount on your tax return. You should consult your tax advisor to determine how best to use the information on your Form 1099-K when filing your personal and/or business income tax return.

If there's an issue with any transaction on your Form 1099-K, you can contact us with the item number and any relevant information about the transaction.

Additionally, Form 1099-K does not include the sales tax when it is automatically collected and remitted by eBay.