Sales tax!!

[CTLeonard]

Facebook the other day told me after the first of the year I would have to give them my last 4-digits of my social security number for selling on there. After 499.00 in sales I would have to give my complete social security number. I don't believe I'm really into Facebook having my number. The sad fact though, I've been selling here for over a year, and yes every dime has been accounted for,, and yes state taxes will be paid. So from today forward, I will be charging Indianas 7% sales tax on all purchases. I know this will go over real well with everyone,, but it just has to be done.thank you all!

[JohnM]

Sure! It should be fine. After all, their business model is NOT about mass distribution of personal information.

[JohnM]

And, they have stated before congress that they are unwilling to be accountable for what others do with that information.

[Kevin Pharis]

You might want to call your CPA...

Here in califunny (as I understand it);
It’s illegal to collect “tax” without a sellers permit!
It’s illegal to collect “tax”, and not forward the collected $$ to the state!
The state will not allow you to forward your collected “tax” $$ without a sellers permit!
It’s illegal to not collect “tax” on the sale of a qualifying product!

However, it is not illegal to collect “tax” on exempt items (as long as you forward this $$ to the state with the proper valid sellers permit)

No doubt Faceschmuck will send you a 1099 for the value of your (probably sales tax exempt) sales. Brandon is less interested in the state collecting 7% off the top... he wants HIS 20% income tax!

[TRDxB2]

Facebook the other day told me after the first of the year I would have to give them my last 4-digits of my social security number for selling on there. After 499.00 in sales I would have to give my complete social security number. I don't believe I'm really into Facebook having my number. The sad fact though, I've been selling here for over a year, and yes every dime has been accounted for,, and yes state taxes will be paid. So from today forward, I will be charging Indianas 7% sales tax on all purchases. I know this will go over real well with everyone,, but it just has to be done.thank you all!

It is my understanding that Sales Tax is based on the the physical location of the sale or if "shipped" the location of the purchaser. Now having said that you should be more concerned with the new Federal Tax Laws for selling anything: on-line, garage sales, auctions, Farmer's Market etc by anyone. Prior to 2022 sellers who made money from online sale platforms such as Etsy, Ebay, and Amazon, operated under the current threshold of $20,000 and 200 transactions before t hey had to file a 1099-K. Since there was a gray area between seller's that were a Business or just a Hobbyist the new administration has changed the threshold to $600. Yes, six hundred dollars regardless of the number of sales
Here is the gist of the New FEDERAL TAX LAW
- Starting on Jan 1, 2022, eBay and other marketplaces are required by the IRS to issue a Form 1099-K for all sellers who receive $600 or more in sales.
-The new tax reporting requirement will impact your 2022 sales and taxes that you file in 2023—it will not apply to your 2021 sales and taxes that you file in 2022. Throughout 2022, look for updates from us that will help explain what’s changed and what you need to do next.
- If you haven’t already given us your Social Security number (SSN) or Individual Tax Identification Number (ITIN), we’ll ask you to provide it once you reach $600 in sales.
- Before January 2022, you may have received a Form 1099-K for selling more than $20,000 and 200 transactions, or selling in states with reduced thresholds. A Form 1099-K for the year 2021 will be provided to you by Jan 31, 2022.
-No need to worry— you only pay taxes on profits. You won’t owe any taxes on something you sell for less than what you paid for it. For example, if you bought a bike for $1,000 last year, and then sold it on eBay today for $700, that $700 you made would generally not be subject to income tax.
- While eBay is unable to give tax advice to our sellers, we want to help make dealing with taxes as easy as possible. Our goal is to help you with these new requirements. We are lobbying Congress on your behalf to raise the $600 threshold. It’s a threshold that ignores the fact that income from selling used goods, usually sold at a price below the original price, is rarely taxable.
Now to avoid the tax you'll need to report your purchase price and in get audited proof of it.
Personally I don't see how the IRS is going to scrutinize such sales.
PayPal records "sending money to friends/family" and etc fall under Banking rules
-- so the 1099-K is going to show possible "income"

[Mark Chaffin]

Just for the record. I take a loss for everything sold on the forum. It's the charitable thing to do!

[Dan_Jensen]

When I buy something on e-Bay, Amazon or others I pay sales tax for Arizona. I think that the IRS is looking at vendors for income tax. One of the pop ups that came up on my computer said that if you steal something you need to report the value as income.

[signsup]

Well, I have to look into all of this and make some decisions. For a year or so, eBay has been charging me sales tax on items I purchased and presume they have collected sales tax on items that I have sold. But I also presume they are just forwarding this money to the state in question and I have no individual responsibility to pay anything. eBay never sent me tax money collected on my sales, so how can I pay my state that money?
I have not seen anything from eBay notifying me of any changes to their system, but I also stopped selling with them when they went to the verified payments program and wanted my bank account information to deposit payments and draw out their fees and chargebacks and dispute funds whenever they want.
I do not understand who is going to monitor and enforce all this. Why is the IRS settling tax debts for pennies on the dollar according to the ads instead of going after garage sale money. And, cash is not the answer, look up civil forfeiture. Sold a vehicle in CO for $26k and the buyer paid in cash. I was driven all the way from CO to GA looking over my shoulder for a routine traffic stop and that money would be gone and given to the Feds.

[JTT3]

The eBay scam is even worse. My state does not collect sales tax on items sold on line unless the seller reaches a large threshold of sales to a single entity. I sent eBay a question concerning the tax they were charging me on items I was buying, then received a call from one of there customer service reps. In the discussion I told them my states law and sent them the law & code with the question, if my state doesn’t require eBay to send them the taxes collected from the sale of a single online item unless the purchase exceeded $1000.00 from a single individual seller, who keeps the taxes collected that did not reach that threshold? The reply was they do. You’ll also find that eBay charges sales tax on the total price that’s including sales tax on shipping. A few days later I received another call & was told that if I fill out a form and list the item number and the sales tax I paid they would verify and send me the taxes I paid. I rarely buy more than a few thousand a year on eBay and that amount is spread over dozens of sellers. So I rarely exceed the $1000 threshold my state requires for an individual purchase. I’m not sure about other states but can you imagine how much money is being kept by eBay just from my state by thousands of purchases being made from residents of my state? Not sure about other states but if it’s similar what an eBay scam.

[TRDxB2]

When Sales Tax is to be collected has many scenarios and totally confusing on what taxes State, county, city, deposit etc are to be collected and on what items & services (shipping) and when they are not to be collected (not for profit institutions).
Its was true that you paid the local sales tax where you made the purchase in person unless it was shipped out of State. Then for on-line sales it was the responsibility of the Buyer to pay local sales tax if not collected by the seller. This is when States lost millions in tax revenues. Laws were changed and now taxes need to be collected by seller's that have a "nexus" meaning presence (shop, office or warehouse) in the Buyer's State. Still true if buy an item from a private seller that doesn't collect the tax you are supposed to pay the State
Now the good part for Seller's in having Facebook, eBay, Esty to do this for you is that the burden is placed on them to do it correctly. The only downside is that the Buyer's need to pay what they are supposed to and had ignored in the past.
Note the the MTFCA Forum is excluded since it does not act on the behalf of the seller or buyer in performing the sale (transfer of funds). No difference then an ad in a newspaper. So as before the Buyer is supposed to follow its States rules on paying the tax.

Here is the link to Facebook's explanation on them collecting sales tax by state and what parameters you need to set-up.https://m.facebook.com/help/22586063151 ... 50WhoRf14u
Here is a link to eBay's https://pages.ebay.com/seller-center/se ... ation.html
Here is a link to Etsy https://www.etsy.com/seller-handbook/ar ... 2717969977

Federal Tax laws have changed in 2022 for casual on-line seller's. Previously a 1099-K needed to be filed and sen to the seller by the 3rd party (think eBay, etc) when the seller's sold more than $20,000 or 2,000 transactions in a year. In 2022 those thresholds were changed to just one $600 in a year. So be prepared to file it properly when paying your 2022 taxes. You may not receive one that is do from the 3rd Party in the mail till February 2023

[TRDxB2]

The eBay scam is even worse. My state does not collect sales tax on items sold on line unless the seller reaches a large threshold of sales to a single entity. I sent eBay a question concerning the tax they were charging me on items I was buying, then received a call from one of there customer service reps. In the discussion I told them my states law and sent them the law & code with the question, if my state doesn’t require eBay to send them the taxes collected from the sale of a single online item unless the purchase exceeded $1000.00 from a single individual seller, who keeps the taxes collected that did not reach that threshold? The reply was they do. You’ll also find that eBay charges sales tax on the total price that’s including sales tax on shipping. A few days later I received another call & was told that if I fill out a form and list the item number and the sales tax I paid they would verify and send me the taxes I paid. I rarely buy more than a few thousand a year on eBay and that amount is spread over dozens of sellers. So I rarely exceed the $1000 threshold my state requires for an individual purchase. I’m not sure about other states but can you imagine how much money is being kept by eBay just from my state by thousands of purchases being made from residents of my state? Not sure about other states but if it’s similar what an eBay scam.

Think your being a bit hard on on-line sellers like eBay and Amazon.
In any case Mississippi Law requires the if they are unable to refund the tax directly to the customer that paid the tax, Mississippi law requires that any over-collection of sales tax by a retailer from the customer must be paid to the State.​ So there is no doubt that eBay is not following MS on-line Sales tax collection laws to the letter and has taken the easy way, collect the tax point blank and send it to the State each month as due. If they were tracking your sale transactions they would be able to hold off taxing you till you met the threshold and to whom. I'm sure if they did that they would included an extra withholding fee for doing so to pay for programming, computer time and data storage.
https://www.dor.ms.gov/business/sales-t ... -questions

[JTT3]

Frank I’m not speaking about the sellers. eBay collects the taxes from them (seller) when the item is paid for. eBay is suppose to send those taxes collected to the State but based on the conversation with an eBay customer service rep, if the threshold is not met in that year it remains with eBay. Plus they’re (eBay) taxing the shipping cost in addition to the item. Hope that makes sense.

[CTLeonard]

So the boss man is all wigged out thinking people are getting wrong ideas about us charging sales tax. I. As in we. Are a legit business, Mount Vernon early ford. Federal i.d. numbers and the whole deal. We have to pay sales tax. Until now we have not charged tax on a ticket. Rest assured taxes have been paid!

[TRDxB2]

Frank I’m not speaking about the sellers. eBay collects the taxes from them (seller) when the item is paid for. eBay is suppose to send those taxes collected to the State but based on the conversation with an eBay customer service rep, if the threshold is not met in that year it remains with eBay. Plus they’re (eBay) taxing the shipping cost in addition to the item. Hope that makes sense.

I don't doubt the conversation you have with the eBay customer rep. But eBay's information pages tell a slightly different story. When something is sold on eBay the bill presented to the Buyer includes applicable taxes. Hence eBay has collected the Tax money from the Buyer. Rules regarding tax on shipping charges vary by State. As a general rule if the goods are taxable then the shipping charge is taxable -(exceptions exist). Now here are some eBay pages the first reflects the conversation you had with the Customer rep. The second contradicts the first page and some of what the rep said
--
--
Now I believe eBay has changed its relationship between the buyer and seller in the past year as well as their role. In the past eBay acted as a 3rd Party and their website allowed seller's to display their goods. For example: The payment transaction was directly between the buyer and seller. Likewise shipping charges were paid between the seller and shipper. Even the sller was onn record as paying the commission to eBay. NOW the relationship reflects that of a Consignment "store" - the owner of the items gives them to the "store" for sale, the buyer pays the "store" and all related transactions reflect the "store" as the principal. Even the purchase for shipping is between the "store" and the shipper. When all related transactions and bills are paid by the ""store" they take their commission and give you what's left. This could be a loophole to avoid hobbyist sellers from filing a 1099-K.
https://smallbusiness.chron.com/tax-imp ... 72057.html
From the above link: Consignment stores carry other people’s inventory for final sale. Because they do not purchase the items they sell on consignment, the stores do not owe sales tax when they acquire items for sale. Likewise, sellers placing their property on consignment don’t need to worry about collecting sales tax from the store. Instead, consignment stores collect sales tax from the final customer on the amount of the sale and send the sales tax they’ve collected to the state department of revenue.
--
--
https://www.ebay.com/help/selling/fees- ... es?id=4121

https://www.ebay.com/uas/sales-tax

[signsup]

My family and I discussed this situation last night over dinner and a lot of questions were raised, most of which have no concrete answer, just speculation at this point. If eBay wants to be more than the venue and actually control the entire transaction from payment through shipping and feedback, then I can see them wanting to or having to get into the sales tax issue. But FB does not get into any of that, it is just a glorified Penny Saver or Auto Trader advertising venue. FB does not accept payments and get involved in shipping or buyer or seller disputes. So why are they getting involved with sales tax and 1099's?
If I place an ad in the local newspaper to sell my trinket for $750, are they going to issue me a 1099 or want to see proof that I collected and paid to the state the sales tax?

My son wants to sell some used electronics on eBay as that seems to get the highest price due to their international exposure, but if a few sales pushes him over the $500 threshold, he does not want to get into a position where he has to provide receipts for what he paid and who he paid. Really no incentive to flip anything for a profit as it alerts the beueaucrats and you are guilty until you prove yourself inocent. Not enought IRS agents and their decades old computers to catch the legitimate tax evaders, and now they are being asked to run down every $600 transaction?

[TXGOAT2]

The important thing is to tax everything, over and over again, and yet again, and amass vast librarys of INFORMATION on everything and everyone everywhere.

[Dan Hatch]

Guys this more about reporting your extra income to the IRS than Sales tax your State. IRS could care less about State Sales Tax.

[TRDxB2]

My family and I discussed this situation last night....... But FB does not get into any of that, it is just a glorified Penny Saver or Auto Trader advertising venue. FB does not accept payments and get involved in shipping or buyer or seller disputes. So why are they getting involved with sales tax and 1099's?
If I place an ad in the local newspaper to sell my trinket for $750, are they going to issue me a 1099 or want to see proof that I collected and paid to the state the sales tax?

My son wants to sell some used electronics on eBay as that seems to get the highest price due to their international exposure, but if a few sales pushes him over the $500 threshold, he does not want to get into a position where he has to provide receipts for what he paid and who he paid. Really no incentive to flip anything for a profit as it alerts the ....... Not enought IRS agents and their decades old computers to catch the legitimate tax evaders, and now they are being asked to run down every $600 transaction?

There is confusion as to the roll these service providers (eBay, Etsy, Facebook, radio . Television, etc) play. So try to distinguish the differences of these providers and whom might be sending you a 1099-K next year. Not to worry about using eBay. I don't understand why Facebook is requiring social security information if they don't have a transaction to manage the payment. Unless it was related to Facebook Pay not the Marketplace. The 1099-K form shows totals by month - likely some algorithms will be set up for a computer to determine who needs a closer look by an agent, when the $600 limit is exceeded (previous years as well) and how that compares to their re-portable income.

"Form 1099-K "Payment Card and Third Party Network Transactions" is a variant of Form 1099 used to report payments received through reportable payment card transactions (such as debit, credit, or stored-value cards) and/or settlement of third-party payment network transactions. It was sent out to payees by a payment settlement entity (such as a bank) if there are more than 200 such transactions and the gross payments exceed $20,000. This threshold will be reduced in 2022 to $600 with no minimum number of transactions in 2022. Reportable payment card transactions do not include ATM withdrawals or checks issued in connection with a payment card. NOTE: Examples of individuals who would receive Form 1099-K include freelancers compensated via PayPal, Etsy sellers, Uber drivers who accept credit cards as payment, small businesses who accept card transactions as payment, and in general professionals who accept online or credit card payments for services."

Now you need to see a bit of a loop-hole that eBay has taken advantage of by becoming more like a Consignment Store then the previous relationship they had as a third-party payment network. But this is dependent upon having your sales proceeds deposited into a bank account. In essence PayPal will be sending them them a 1099-K not you because the transaction settlement is now directly between eBay and the Buyer. When eBay later sends you the net proceeds from the sale, its like PayPal's sending money to Friends/Family.

So these laws have to do with the role that the entities are playing. An ad in a news paper or Angie's list is no different then putting a Item For Sale sign on your front lawn. If someone pays you directly with cash or check, no 1099-K. But as noted above if your a Business and accept debit/credit cards then your likely to get one.

Now Banks are required to report deposits under certain circumstances because og the possibility of money laundering
The four situations when your bank reports transactions to the IRS
- When you're being audited: If you are chosen for an IRS audit, then your bank will have to share information on all relevant transactions with the IRS.
- When making a deposit of 10,000 dollars: If you make a deposit of 10,000 dollars or more, the bank is obliged to report this transaction to the IRS.
- When receiving multiple transfers of 10,000 dollars: If a third party transfers an amount of 10,000 dollars or more into your account on more than one occasion in the space 12 months, the bank should report this too.
- When your banking activity is suspicious: Apart from the circumstances mentioned above, your bank is also expected to report other suspicious movements or patterns to the IRS.

[Ron Mac]

With all the changes regarding doing business on the internet, I wonder if good, old fashion swap meets will start making a comeback?



I hope so!!!!!!!