What resellers need to know about sales tax
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- Опубліковано 21 лип 2024
- Sales tax is messy! Fortunately it's becoming simpler for most resellers. Find out what you should be doing with regard to sales tax - collecting it, paying it, filing sales tax returns, reseller certificates, etc.!
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Do I have to register for sales tax in my state?
www.avalara.com/us/en/learn/g...
Economic nexus thresholds by state:
www.avalara.com/us/en/learn/g...
Marketplace facilitator laws by state:
www.avalara.com/us/en/learn/g...
You’re not only a CPA but also a good instructor. You break things down well and are smooth and articulate in your delivery. Thank you for all the information.
Thank you! That is much appreciated :)
I don't understand how this doesn't have more views. I assume 2022 is going to change that. I appreciate the stellar content. I imagine I'll be watching most of your library.
Thank you so much for this video! I have a seller's permit and was filing my sales tax return but I was filing it as taxable income instead of nontaxable income. I went back and found the drop down option for marketplace sales under nontaxable income. Such a life saver!
Thank you so much! I've been wanting to suggest a video about sales tax. Thank you, thank you!
I have been researching all day on this topic. You are the only person who explained this well. Thank you!
The way u explain and break things down so well! You make it so easy to understand the complicated words if u try to read them 🤩
Good job explaining sales tax reporting requirements and recent law changes. I am a full time eBay seller and retired state tax auditor. Worked almost 40 years as a state tax auditor. I still enjoy watching videos about taxes and especially sales tax reporting and requirements. Most small businesses and especially online resellers do operate under the radar if they do not get a 1099. I do know or at least my state obtains 1099 information and matches information to sales reported for sales tax. Also, many states required you to register and file business tax returns with cities and counties. In my state this is a very small tax, but there is a minimum that must be paid each year. With the new federal law change in 2022 to a $600 threshold to receive a 1099, I can only imagine what is going to happen this time next year.
THANK YOU THANK YOU THANK YOU!!!! I must have watched 6 million videos today trying to get this answer and literally NO ONE gave me a clear answer. Thank you so much for the short and clear answer!
Clear and concise. Straight forward and full of useful info. Praise!
You're awesome Mark. Thanks for another great video :)
Most valuable information ,subscribred 😇🙏 I really appreciated it and tysm ..
Very helpful! Thank you!
Very informative, thanks! Couple of questions. To verify, a sellers permit should still obtained in the state the seller is based in even though they are not collecting due to marketplace facilitation?
If Amazon directed an FBA shipment to be stored in Florida or Missouri for example, then the seller should get state specific seller permits for those states because of location nexus?
Thank you for taking the time to make this video. I bought a piece of equipment brand new a few years ago for ~$450 and just sold it on eBay for $380, why was the buyer charged a $32 sales tax from eBay on my used item? I already payed my sales tax dues when I bought the item new in the first place, why is the buyer being penalized with the extra tax?
Nicely explained and put together.
May I ask about Use Tax? If an independent e-commerce seller (not marketplace) has not triggered economic nexus in any states, is the seller required to collect and remit Use Tax instead? Or is that the buyers responsibility and the seller is not involved in that process at all?
Thanks for your content and time.
Awesome as usual!
Thank you! Good video
Thank you so much for this. I'd like to ask a question that I hope you'll have time to answer.
I've been using H&R Block tax software to do my returns. I have a full-time job and I fill out the schedule C to cover the 1099k I get from ebay. I think I have a good handle on my federal taxes.
The trouble starts when I go to the state return. As you know the software will populate the state return with the information from the federal return. But then, while finishing up the state return, I get asked to enter any income shown on a 1099k. The 1099k information is already rolled into my adjusted gross income that was transferred over from the federal return. If I enter 1099k information again on the state return my state tax liability jumps up significantly. I get that I owe state income tax but ALL my income is reflected on the adjusted gross income line. How does one handle the 1099k question on the state return without being taxed twice?
Great video! I do have a question regarding Gross sales and sale tax. What is total sale revenue? I always have customers pay for shipping. So when I file the excise tax report, should I just report the total sale amount without adding the shipping charges as part of the sales because customers paid for the shipping. However I understand the sale tax amount the marketplace collected is taxed on the item price plus the shipping charges! So my revenue that I report should be the selling amount plus the shipping charges? Thank you!
Hey man good video, I have a question tho.. who would be my market place facilitator? The wholesaler whom I’m buying my liquidation pallets from?
Great video!
Very helpful!
Thank you
I was concerned about sales tax because I live in Florida and I noticed that the platforms were not collecting sales tax in Florida. That made me think I was supposed to be collecting sales tax. This got me really nervous because I hadn't been. Now that I understand marketplace facilitator laws I realize I'm OK. Thanks again.
Right! Only on Florida sales which will be a small portion of the total 👍🏼
@@notyourdadscpa Ugh, wait, I do have to charge sales tax on FL sales?? I interpreted since FL doesn't have MP Facilitator laws we don't have to charge tax.
@@jenniofdaisysdropbox2462 Yes, since they don't have MP laws, the platforms do not collect for you for FL sales.
@@notyourdadscpa
Okay, thanks. Bummer, so my profit just went down because I'll have to eat/pay the Sales Tax on sales already processed in states mentioned below.
According to TaxJar, Kansas, Missouri, Tennessee, Louisiana, Mississippi and Florida are only states that charge Sales Tax. AND do NOT have MPF laws, YET (I hope soon, lol). For these states Ill use eBay Tax Table set up feature.
Apparently some states allow Shipping to be taxed too. I'll need to research further.
And research how to PAY the Sales Tax to Uncle Sam.
WHOA......learning lots! Thanks again.
@@jenniofdaisysdropbox2462 But since you probably don't have nexus in those other states, you don't have to worry about them.
What about cash paid for items at yard sales where you don't get a receipt but should claim the purchases as a deduction? Should an ATM withdrawl be the receipt for deduction?
This is a really good video. Hairy Tornado recommended your site to me. One question, If I am a small reseller, selling out of my house. All my inventory is at my house as well. I sell through Ebay and Etsy. From what I am getting from this video, is that I don't have to worry about taxes, cause taxes are being taken out for me. Just want to make sure. This is my first year selling. I live in Michigan. Again, thank you for the great information and look forward on hearing back from you. I subscribed.
You are correct! Sales taxes that is. Income tax is a separate animal.
@@notyourdadscpa Do you have to pull out money for federal and state tax as well?
Thanks Mark for the very informative video. Can you tell me how do I separate the amount collected by eBay or Amazon according to each state? Thank you.
There are downloads available for seller’s financial reports you can access from the Seller Hub. You can see the states you shipped to and even sort by state on your own spreadsheet if you copy the info over. This will allow you to see what you need for your states sales tax filing.
How would it work if your customers are overseas? Do you still collect sales tax? Our business is in Nevada BTW. Thank you and great content!
Hello, thank you for this video. Im still dont understand in what states i need to file sales tax. Im in CA and i have made sales on my Amazon Store across multiple states. Do i need to fill in all states?
If you sell items in the market place and only do local pick up, you still have to report it to your taxes ?
Hi there!! Great video, thank you!! What about in the instance if we resell locally, such as a flea market, booth, or local sales via Facebook, for example? Would we need to collect sales tax on those sales??
Technically yes, unless you live in a state with no sales tax.
Hello
Am I tax exempt if I buy something from the federal government? For example if I buy something at a federal government auction. Great info thank you
Hey Noah, i live in NJ and i purchase products from Walmart and resale on Amazon. so Im tax exempt in most states but my question is do i file for every state or just NJ? how does that part work? i cant seem to find that info for some reason
Hi! What if the service i need is for someone to go to the state website to report sales/e filing. This is for a shopify store.
How would you provide receipts from purchasing inventory from places you don’t receive receipts from? etc. Yard sales, Facebook marketplace meetups
In that case you will just create your own record. For example you could have some type of spreadsheet or log book where you enter things like location, item description, cost, etc.
Thanks for asking this question @Trexy, I’ve been trying to find this exact information!
So I live in MO that has sales tax but no marketplace facilitator laws. I don’t resell a lot and I may only get 4 or 5 sales in MO all year. Could I just not collect the sales tax from the customer and at tax time figure out my sales from MO and just pay them myself? I’m having a hard time finding it on the department of revenue website ☹️
Does this still apply to the current situation we are in where resellers will now be issued the 1099K for a total of $600 in sales? Like if I’m doing PayPal invoice, should I be charging sales tax?
Great content and very helpful links. I live in Tennessee and have just started reselling on eBay, so it appears that I do not have to collect sales tax. Below is an excerpt from the link you provided. No sales tax because eBay is an online marketplace and I started reselling after October 1, 2020. Would that be correct?
Treatment of exempt transactions:
Exempt sales and exempt services are included in the threshold calculation; sales for resale are excluded; sales made through an online marketplace are excluded effective October 1, 2020
Correct!
Thank you for sharing this information. I'm in California (sigh)
Since stockx charges the person who purchases my shoe/product... Do i have to pay state taxes? Cuz that like paying taxes 2x?
I live in Oregon with no sales tax. I sell on eBay and was under the impression that we do not not have to worry about sales tax, including Florida, because they hand,e it for us now in all states. Is this true?
For most people that will be true. Unless you have nexus in FL, you won't have to worry about it.
Well done 👍
Do temporary pop-ups have physical nexus in FL, California, Texas & Colorado?
I’m in Texas. I sell through a Facebook Buy/Sell group to buyers in the US. Should I be collecting sales tax?
So my salary from my job gets taxed. The taxed money is used to purchase an item and it gets taxed again. Then I sell it on ebay and it gets taxed a third time. Then if I make a small profit (items I bought decades ago, I can't remember what I paid for them so perhaps a loss) it gets taxed a fourth time as income?
Do I need a different resale certificate for each state?
Im looking into starting a custom t shirt business & I called Texas Comptroller and they told me I don’t have to collect sales tax from customer if I buy shirts at regular price with sales tax included. The wholesaler or whoever sold me the product is responsible for paying the sales tax to the state. My question is do I still have to make quarterly sales tax reports? & when I write off shirts as an expense will I be writing the total price with sales tax included or just the Regular price without the sales tax?
so if I have business in South Carolina and employee in California, do I have nexes in those states and only pay sales tax there?
So I’m in Florida when I resell product I’m suppose to pay taxes at the end of the year on sales I only did in Florida?
Correct 👍🏼
Let’s say you don’t have a sales tax permit and you only sell on eBay and they collect and remit sales tax for your state. Do you still have to get a sales tax ID with your state to do a sales tax return to report what eBay collects and remits for your state, or does eBay take care of that?
Can I obtain a resellers permit, buy locally (tax free) and sell to customers in other states via eBay and avoid collect/reporting sales tax to my state?
What if you sold a few things on ebay from California, do you need to pay taxes?
What about private sellers doing only local meetups?
And what if I sell on my own website? Do I collect tax by myself?
I flip furniture on fb marketplace, have been doing it for over a year now & receive the money through Venmo most times. Is there anything I should know regarding sales tax? I live in California & I’m 19. I don’t know anything regarding sales tax or taxes in general so anything I should be aware of?
Regarding the economic nexus and the marketplace facilitator laws, they have a threshold of 100k and 500k. Does that mean we're on the hook if its more than that, or less than that?
The thresholds vary by state, but yes if your sales in that state do not exceed the threshold, then you are off the hook from having to collect sales tax in that state. If you are selling through a platform that is a marketplace facilitator, then you'll be off the hook regardless, because they will be collecting for you.
@@notyourdadscpa Awesome, thank you. So if selling through only Ebay, I don't need to collect at all?
So if I get a resellers certificate will that apply to stores? I got to my local gaming store and search through their cards that they are underselling (Im talking about cards that I can sell online for $3 being 10 cents). Will I get exempt from paying sales tax? Or does that not apply?
Great video! Is state sales tax due on inventory imported from foreign suppliers?
Not generally.
@@notyourdadscpa hi... I'm an online reseller and my suppliers/manufacturers do not charge any sales tax whether to sell to the end consumer or they sell to me (as a reseller)... So, in that case, Do I (as a reseller) still need to collect sales tax from my customers?
Someone says YES, someone says NO. I'm confused...
Also, since we just pass on the order to our supplier, they initiate the shipping (towards the end consumer) from their own warehouses located throughout the US, So the location from where the shipping is intiated, would that location be counted as a physical Nexus for me? Remember, those warehouses are not mine, they are of suppliers...
What if I live in Florida, and I purchase items and pay the sales tax. If I resell on eBay, are all of my sales tax exempt?
I am in NC. If I sell over $600 should I get a federal and state tax ID?
In Rhode Island there is no sales tax for shoes. Will I be billed during the end of the year?
The state usually doesn't have a record of what your sales tax should be. So if they do bill you, it's just an estimate.
Quick question here I closed an account and only made $0.33 cents do I have to pay taxes for this? Sorry for the silly question I grew up really sheltered and I’m just trying to learn how to adult and be independent.
What if my sales are just cash, and mostly meet them up by selling in facebook market place? Do i get tax?
So i just read the AZ Form 5020/Marketplace Seller Exempt Certificate. The bottom of the form requires a TPT License #... Right below is an acknowledgement (to sign) stating that i do not have a "license". So now i'm really confused. lol
The TPT license is basically Arizona's sales tax permit or sales tax license.
Hopefully, someone can clear things up for me. I bought cell phones from a Liquidation website. If I end up selling the cell phones lower than what I paid for on Craigslist; I paid for them $180 each and end up selling for $160 each. Do I have to pay sales tax on $160 or $180? . Also, what if I can take the to South America and sell the cell phones over there for $250, do I have to pay sales tax on $250 each? thank you for your help!
Do I need a resale certificate when buying for major retailers? I run a gift basket business and plan to use a combo of wholesale/retail items for inside the baskets. For small things... I go to Target, World Market or Home Goods etc for little odds and ends , even those these places aren't known for wholesale no talk about how to register. Is it needed for places like that? Would that mean I need a resellers certificate for Target, World Market and every separate major retailer I use?
You don't need it in general, but you do need it in order to avoid paying sales tax on your inventory purchases with wholesalers or vendors who accept them.
New subscriber
I sell on ebay but live in CT and ship out of my home, if ebay remits sales tax for me to CT do I still need to get a sales tax permit with Ct? If I do don't I just not report anything since ebay did it for me? I'm so confused.
I’m starting as an Amazon seller fba retail arbitrage and I was wondering do I need a sellers license and resellers certificate so I don’t pay taxes when I buy stuff at TJ Max? Is that sufficient for the store not to charge you sales tax on the items?
Some retailers don't honor reseller certificates, so you would need to ask them or find out their policy. Typically it's more for wholesalers.
Thanks for the video. I had a question so If you just started FBA and I am located in CA, do I need to register to collect sales tax for CA and submit the Sales Taxes every month like other videos say or only for the states that Amazon doesn't pay the taxes? Sorry the process is so confusing and there is so many videos online saying different things.
You are not required to collect or pay sales tax. CA does however still want you to register...but since you won't owe tax I don't think they'd penalize you if you didn't.
@@notyourdadscpa I tried telling the person from the agency that on the phone she kept telling me if you're selling FBA you don't need to report anything since we collect it from Amazon with the new law, unless you are making more than 500k. Anyways, so pretty much you need to just report your profits on your income taxes it seems? - Thanks for your reply.
@@DivineAegis02 Right don't worry about sales tax, just income tax.
What if you are creating your own e-commerce website based in CA. Then that means I am only charging sales tax to only those in CA? And when other states purchase from my website it won't show any sales tax as they check out. Am I correct? Sales tax for other states only starts applying once you've established a nexus within that state right?
Correct👍🏻
So am I correct in assuming that as a reseller we have no sales tax activity because of the marketplace facilitator laws???
Yes this is correct if you are selling through a platform that is a marketplace facilitator such as ebay, amazon, etc.
Thank you for this info! Unfortunately I’m in Florida so that means I’ll need to file. I currently am selling on Amazon, Poshmark and Etsy. Do you know if any of these platforms collect the sales tax on our behalf?
I believe Florida finally jumped on the bandwagon, so going forward you won't have to worry about it 👍🏻
Hello
We have a reseller certificate so the sales we make have zero tax. Does this mean we dont need to file this? Where should we put the sales in ST-1?
If you have a reseller certificate that means that you are registered with the state, so they will be expecting you to file a sales tax return, even if the platform you are selling on is the one that collects the tax. It's just a hope that you have to jump through. Typically you'll list your total sales for that state, and list that same number as a deduction below so that the result is zero taxable income.
What if i pay sales tax on a good but then resell it and collect sales tax from the final buyer. Am i entitled to a refund of the original sales tax by my state (CT) ?
Some states do have a process to recover that original sales tax paid, but others do not, and you're just out of luck other than being able to deduct it as part of the overall cost of goods.
How about a case where it took you 13 years of going around thrift stores. You slowly and hard working got to a collection of clothes. You paid Storage fees. Hours of work looking for something you considered unique. You had an idea of opening a small museum but never planned on covid happening. So now that plan is messed up and youre stuck with what you bought in a competitive world of resellers. Do you have to register as an llc? Do you have to charge taxes on every item? And how do you know how much? Or how do you sell the things you have? Or how can you explain to the irs your life is messed up now that you cant realisticly open a museum as planned and lost 13 years of hard work? Thanks
No need to open an LLC. Had a minimum you could list the items on eBay and try to sell them off. Then you should at least be able to break even if not turn a profit.
@@notyourdadscpa How’s it going? GREAT INFO ON ALL YOUR VIDEOS. What do you do if you are selling on eBay and have years of stuff saved up from flea markets with no receipts? Just ball park your cost you paid for the items and keep a notebook for taxes?? Thank you!
Yes that's what I would do 👍🏻 it might not stand up in an audit but the worst they'll do is disallow the deduction if they don't like it.
So, the certificate is something *YOU* issue and send to your supplier once you have a sales tax licence, correct?
Bingo
@@notyourdadscpa Thanks
I'm a little confused, I have a legitimate business in NYC with a sales tax ID (COA) issued by my local state. I just bought few graphics cards from a supplier and requested for tax exemption, I filed a "ST120" form for reseller certificate for tax exemption of buying the graphics card. Now I am liable to collect tax. I want to sell on eBay... but eBay already collects tax. What confusing is that lets say a customer from California buys the GPU from ebay, which taxes needs to be paid by the customer? both NYC and CA? because NYC taxes was not collected when I purchased the GPU and the customer from California is now buying this GPU... so which tax does the customer pays? this just hit me hard in the brain lol
Since you don't have Nexus in California you wouldn't have had to worry about collecting sales tax even before eBay was required to collect them for you. The bottom line is, eBay will collect the sales tax on this transaction.
Ugh, I'm in FL
They'll get there eventually :)
Okay someone please help, if im selling on ebay in ohio I am good, ebay handles the sales tax. But what happens when I start selling locally off of facebook market place and to friends and family and at the local flea market down the road? Is this considered a physical nexus or do I not have to worry unless i meet those economic threasholds? Storing inventory in my house garage and what not, but Im just worried about if I make a local sale do i need to collect and remit sales taxes....
It is considered physical Nexus, although some states have exceptions for garage sale type sales
If I sell a product to a Florida resident, do I need to collect sales tax on Florida's behalf?
Typically only on sales to customers in Florida.
@@notyourdadscpa Thanks.
I live in Florida and ebay collects taxes
If am owning website where am selling products, When economic nexus threshold is met for a state, for e.g, 100,000$ do we need to remit sales tax for first 100,000$ sales as well? If so, do we need to start collecting sales tax for all 45 states even before meeting the economic nexus threshold? Because I don't know well before the year completes, if am going to go beyond the threshold
If you are not selling through a marketplace facilitator that takes care of the tax for you, and are rather selling through something like a shopify site, then yes, you would be responsible for collecting and remitting sales tax for sales in any state where you have either economic of physical nexus. I don't believe you would collect until you meet the threshold. I suggest checking with TaxJar on that one.
I need your help
Send me an email! mark@notyourdadscpa.com
God dammit florida. Get with program... Would these platforms calculate sales taxes for these states (like florida) automatically?
Very helpful, thank you!