posted on March 1, 2004 01:57:21 PM
Hello There,
I was just wondering how anyone who uses this message board handles thier taxes when conducting business on Ebay?
Naturally I'm sure many sellers who are only running maybe 100 auctions a year aren't claiming/paying any taxes. However what about those of us who are running 1000 plus auctions a year?
I notice that allot of sellers only charge sales tax to those residing in the state in which thier located. Example..I live in California, so I would presumably only charge taxes to those who live in California? Any information on this subject would be greatly appreciated.
Thank You
Ryan L
posted on March 1, 2004 03:02:39 PM
If you are in business you are required to have a permit from the State Board of Equalization to collect sales tax on behalf of the state and must file at regular intervals as to how many sales you made both in and out of California. You only need collect taxes when shipping within California. Intra state transactions are exempt from tax.
Friends don't let friends vote Republican!
posted on March 1, 2004 04:19:13 PM
I don't collect tax on sales within my state, as 99% of my sales are out of state. I do however report all eBay sales income to the feds. I'd hate to go thru an audit and not have accurate records to back up the figures on my tax return.
posted on March 1, 2004 04:32:51 PM
Dave - it's the "Inter"-state transactions that states do not require tax collection on. "Intra" are those within the state.
For those who don't collect taxes on items sold within the state - I would be much more careful now that states and feds are now talking about a renewed interest in collaborating on going after tax cheats at the state level. They've said that they'll be comparing notes more - so it's conceivable that the Feds could tell your state that you're reporting income and your state could be interested in whether appropriate sales taxes have been collected.
Unfortunately, it's not really an "option" of whether you do or you don't collect the taxes. If you are set up as a business - even a sole proprietor - within most states you are required to collect the tax owed to the state - then send it along to them on a regular basis (not just at the end of the year - most are quarterly).
Having had a business in CA more than 10 years ago - it wasn't that difficult to deal with the state agencies - mostly just some regular paperwork.
Good luck to ya.
Wayne
Never explain -- Your friends do not need it and your enemies will not believe you anyway.
~ Elbert Hubbard
posted on March 1, 2004 05:12:08 PM
Actually sales tax is supposed to be paid on all taxable Internet sales. The catch is the seller is required to collect it in the "home" state, the buyer is supposed to send unpaid sales tax in with their state income tax form.
dd
