posted on January 21, 2002 11:23:10 AM new
I am new to charging sales tax on instate sales. My sales tax rate is 5.6% Any way, how do I add this to the sale? Is it just on the total bid ammount or is it on the entire amount? Also what happens when someone pays with paypal and then there is a service charge, does the extra just come out of my own pocket? Lastly if a buyer forgets to add sales tax I can just figure out how much it should have been and add it in out of my own pocket right?
posted on January 21, 2002 11:36:50 AM new
Come on, sellers! How do we all figure sales taxes on our auctions? I'm surprised there hasn't been an avalanche of helpful replies here!
posted on January 21, 2002 11:53:59 AM newIs it just on the total bid ammount or is it on the entire amount?
It depends on your state. Some charge tax on shipping costs and others don't.
Also what happens when someone pays with paypal and then there is a service charge, does the extra just come out of my own pocket?
The PayPal fees have nothing to do with sales tax. For a $100 sale your state gets $5.60 in sales tax, regardless of how you're paid.
Lastly if a buyer forgets to add sales tax I can just figure out how much it should have been and add it in out of my own pocket right?
Sure. I don't even bother collecting sales tax. I sell low priced items and my sales tax obligation is usually about $50. My state gives an early payment discount of 2/3 off, up to $72 annually. So, I just pay early and with the discount owe $15-20. It's easier to pay out of my own pocket than to nag my customers for nickels and dimes.
posted on January 21, 2002 03:04:53 PM new
Toollady is right, First step is to apply for and get your state sales tax permit and number. Each state has different requirements for in state transactions which are out of your city - One call to your states dept of revenue should tell you all you need to know.
Luck to ya !
posted on January 22, 2002 09:27:31 AM new
I think, but I do not know, that you only charge sales tax on the items sold in your state. I live in the same state as you and I don't charge sales I pay it from my pocket. I also don't file on sales tax I put the ebay sales on my income and go from there. i.e. if my ebay sales were $3,000.00 and my income from work is $30,000 then my total income is $33,000. I have been doing ebay for 3 years and nobody has said anything to me yet. I might be paying a little more tax but it's easier this way. I also deduct PayPal fees and AW fees.
[ edited by Libra63 on Jan 22, 2002 09:30 AM ]
posted on January 22, 2002 09:37:30 AM new
Sales Tax and income tax are TWO different things.
If you have a sales tax number you MUST pay the sales tax, whether you collect for it or pay it yourself. Each state is different, some cities also required you to collect taxes, ie in the city of Denver, if you have a state tax number and live in Denver and sell to someone in Denver you must collect, state, city and RTD tax. Everyone wants their share! Some are filed, monthly, some quarterly, some annually. If you have a sales tax number you should have received this information and the proper forms to file.
This is not the same as income tax you file with the state and IRS.
