eBay Taxes Collected - PayPal 1099k

[nebuspp]

On eBay, certain sellers collect tax in one state or multiple states for whatever reason.

Paypal sends the IRS the same 1099k that they send us.

Where are those sales taxes collected by the sellers reported to the IRS or specific states where sales taxes are due?

[jeffweico]

The states. Sellers doing business are supposed to register in any state where they have a physical presence (usually just your home state) and collect sales taxes on sales made to residents of that state.

[newjerseymax]

I collect taxes and report them quarterly... Pretty straight forward...

[nebuspp]

Hmm...after reading my question over I don't think I was beating around the bush. I see numerous sellers that charge tax in 5+ states.

It is the sellers responsibility to collect tax and remit them onto the appropriate state.

Does eBay or Paypal report to these states that these sellers are collecting tax? What I want to really find out is are these sellers collecting tax and pocketing it because I do not see how the states find out about how much has been collected.

Paypal reports 1099k to the IRS...but do they report enough detail that shows that sales tax was collected and is due as well?

[GreenBean]

Going soft

Warning EBAY LINKS below


http://reviews.ebay.com/Taxes-and-Eb...00000000720733

http://forums.ebay.com/db2/topic/Par...y-Or/520072616



Current chats etc.

Bottom line is professional advce is needed to prevent visiting that holiday camp

[nebuspp]

Thanks GreenBean. =)

Just to be clear, I am not seeking tax advice of any sort. I am in the midst of hiring an accountant for my business, but I doubt they will know the answer to this question as it pertains to exactly what eBay and Paypal reports.

[Sandy D]

Everyone needs to go to an accountant with the new changes etc.

Be careful with what you do and pay your taxes owed.

I just spent a few hours with mine and they already knew about the pp stuff and was already prepared for me.

[KingRay]

A good up to date tax person will know the situation. online sales are much more of an issue than they were 10yrs ago or so.

Good ones are up to date on all the new issues. dont go to some guy you know that has been doing taxes for 40yrs. Those are in my opinion worthless

There are tons of options and those questions you are asking are very straight forward topics for anyone that has actually registered their business the correct way.

Opening a business account on paypal and getting a tax ID isnt by any means registering your business with your state.

Most seem to think that is all there is to it but they are very wrong.

If you collected tax in 5 states you will have some sort of presence in that state. Real estate, office, home, ect. You would be filing taxes in that state so reporting the sales tax would be just another line on the form.

Really simple stuff but from the outside looks complicated.


Bottom line is.... Dont try to handle all this yourself by reading posts about it. Get a professional to help you.

It will be well worth it and if it costs you $500 to do it, then so be it. Thats just one of many things you have to do when being a business.

Good luck.