powderblue
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posted on December 30, 2000 08:55:23 PM new
How many sellers who charge sales tax actually pay it???
Also, what percentage of Ebayers do you think actually bother to report Ebay sales/profits on their income tax??
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uaru
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posted on December 30, 2000 09:01:12 PM new
If you should be paying taxes on your eBay earnings I recommend you pay them. If you ever had the IRS on your case you'd know that. A registered letter from the IRS is one thing you don't want, it is tough on the heart.
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sonsie
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posted on December 30, 2000 09:51:18 PM new
I've had a CA resale license for years, but have used it almost exclusively to buy supplies for my other businesses. Since I started selling on eBay, I've been keeping copies of all in-state sales and last year (my first year in selling) I ended up paying about $10 to the state board of equalization. I might pay $50 this year...but probably less.
I also am scrupulous about reporting ALL income and expenses. I take an in-home office deduction, keep track of mileage for all my businesses, and so on. I've been in business for myself for about 30 years, so it is just second nature.
Also, I don't want to die young of a heart attack...no IRS letters for me! 
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Eagerbeader
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posted on December 31, 2000 09:05:59 AM new
Absolutely tell the IRS what you make. Just one audit and your life will never be the same. Be honest...it is a little painful at first, but at least you won't stay up nights thinking they are going to get you. And they will...being paranoid about the IRS is a healthy thing.
Dawn
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LadyGambler
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posted on December 31, 2000 09:26:38 AM new
Can anybody answer this question? I live in California where Sales Tax is currently 7.25%, but I notice alot of Sellers stating "Calfornia buyers add 8.25% Sales Tax." Why would they do this? Do people in certain areas of Calif. (Bay Area) have higher sales tax than the rest of the state? I'm puzzled and have wondered if there was a legitimate reason or if the Seller was pulling a fast one.
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sonsie
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posted on December 31, 2000 09:35:23 AM new
"State" sales tax is somewhat of a misnomer, at least in CA. The basic state sales tax is 7.25% at the moment (scheduled to go down to 7.00% after the first of the year), but various local taxing agencies add to this total. In many Bay Area cities and counties, they are taxing for rapid transit systems and indeed, lots are up around 8.25% now. Sales tax charges are all over the map in between the basic state levy and the top-end county/city tax rates in the Bay Area.
This is legit...or it is if the seller is actually sending the money where it belongs.
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NameAlreadyTaken
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posted on December 31, 2000 10:29:53 AM new
I have been a lurker for 6 months but this one made me register. The mail order sales tax rate for California is 7 ¼% (7% starting tomorrow). If you do not live in the county of the seller then this it the rate you pay. If you are charged more then the seller is either 1. Lazy, not wanting to track different sales tax rates. 2. Does not know the rules (very common). 3. Just pockets the difference.
I live in a small rural county in California (never had a customer form this county) and don’t know which tax rate would apply to mail order sales in the same county.
A car dealer tried to charge me a higher tax rate because I lived in a county with a lower tax rate but received mail in their county, which had a higher rate. When
I called the state tax people they came down hard on the dealer for trying to collect the extra tax. The state did not seem to care whether it was a mistake or dishonest, they wanted the dealer to collect and remit the correct tax.
John
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LadyGambler
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posted on December 31, 2000 11:20:42 AM new
Hey, thanks you guys! I was really wondering about that.
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powderblue
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posted on December 31, 2000 11:37:54 AM new
How come no one has really given an answer that actually pertains to the original question?
I understand so many of you are pa-pa-paranoid of the dreaded IRS, but that wasn't my question.
Let's try again:
What percentage of Ebayers do you think actually bother to report Ebay sales/profits on their income tax??
[ edited by powderblue on Dec 31, 2000 11:39 AM ]
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uaru
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posted on December 31, 2000 12:36:56 PM new
What percentage of Ebayers do you think actually bother to report Ebay sales/profits on their income tax??
57%
A bottle of catsup inspired that number. Actually I don't have a clue. Should all closet cleaners report their sales to the IRS, no. Should the serious sellers report their income to the IRS, yes.
I understand so many of you are pa-pa-paranoid of the dreaded IRS
I'm not paranoid of the IRS, look up the definition of paranoid. I've had to pay dearly for some mistakes I made with them. I'm not paranoid about fire, but I'm careful not to stick my hand in the fire anymore either.
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gravid
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posted on December 31, 2000 01:37:28 PM new
I don't care what percentage does it - The IRS does not care what percentage does it.
If you want to be able to know you will not have big trouble with the "gubbamint" ya gotta do it....
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powderblue
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posted on December 31, 2000 01:38:29 PM new
uaru:
The word paranoid is quite appropriate when describing how many feel about the IRS. People feel unmitigated fear when those 3 letters are invoked.
Perhaps some fear is warranted, but when you are dealing with a situation such as Ebay item selling, you're talking about a very unlikely chance that detection and follow-through prosecution will take place--simply to get the tax you should have paid on $165.00 you made after selling 28 beanie babies.
Let's be real, and a little less paranoid.
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morgantown
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posted on December 31, 2000 01:52:39 PM new
I suspect the percentage is low, perhaps very low.
Being a person that likes to sleep at night, I began reporting the first year.
The IRS could pull an entire sellers records from eBay, it's easy. It would not take much examination to figure if a person was selling off some unwanted personal items, or engaging in a for-profit business...
Morgantown
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vargas
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posted on December 31, 2000 02:04:44 PM new
powerblue-
Each seller does what his/her conscience allows.
Whether another seller does or does not pay the appropriate tax is not my concern, so I don't have the answer to your question.
I suspect no one here really does.
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powderblue
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posted on December 31, 2000 02:07:49 PM new
morgantown:
That is the commonly held belief. Everyone is so afraid the IRS will "pull the sellers record".
Only one problem with that:
Since when does a record of an auction's final bid accurately represent what an item sold for---or if it sold at all?
Many sellers don't bother filing for a FVF refund when a buyer doesn't pay---they just relist--or not. A FVF refund filing is the only trace of a way there is any evidence a transaction did not take place, but again, that's hardly evidence.
How do you prove a transaction took place? Ebay is a bidding venue ONLY, not a store.
[ edited by powderblue on Dec 31, 2000 02:08 PM ]
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uaru
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posted on December 31, 2000 02:51:02 PM new
Let's be real, and a little less paranoid.
Powderblue,
I assure you that I'm not a paranoid individual. I was very naive about the IRS at one time. My respect for them comes on personal experience. Like most lessons in life they must be learned on a personal basis to truly be appreciated.
I might be classified as a reckless person, I assure you I'm not a paranoid individual. Some lessons, especially the expensive ones stay with you for life.
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LadyGambler
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posted on December 31, 2000 03:40:31 PM new
Uaru,
You are so right!
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majesticman
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posted on December 31, 2000 04:58:04 PM new
When it comes to an audit they always find other mistakes over the audit period. Also the penalties and interest are 75%-100% on top of what you owed.
It's no fun sending the IRS $4,000 for trying to get out of $1,000 in taxes.
Been there done and that but it was much more than $4,000. I have paid 100% of what I owed and kept immaculate records ever since.
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DMRick
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posted on December 31, 2000 05:03:17 PM new
<<When it comes to an audit they always find other mistakes over the audit period. Also the penalties and interest are 75%-100% on top of what you owed. >>
This is a new one for me..at Block we have never had a person pay those kinds of penalties..not even in the same ballfield. In fact they have not been much more that what it would have cost. And sometimes the audit shows up things that were missed..by the auditor asking different questions.
How many years did they go back on you? I'm not saying you had fraud, but many people think they can only go back 7 years..that isn't not true..in fraud cases they can go all the way back...even though this seldom happens..in that case, your interest and penalties mount up.
I always suggest you pay what belongs tot he government..not one penny more..by the same token, take every deduction you are entitled to. If you go by this, you should never fear an audit.
I also always suggest new businesses go to an accountant for the first year, to get set up properly..so many people miss legal deductions.
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krs
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posted on December 31, 2000 05:27:39 PM new
Funny, but I'm in California and I bid for and bought a large monitor from a company that sells excellent computer equipment which has been obtained from other corporations in the bay area. The seller is close enought to me that I drove there to pick the thing up. I paid at their location and was puzzled that there was no sales tax applied to the transaction, so asked about that. Their rep told me that the sale was an 'internet sale' and there was no applicable tax to pay.
Naturally, I took them at their word, as they are a large warehoused outlet as well as being a qualified factory service station for many brands including NEC, Toshiba, IBM, and several others. They were not, and are not in any position to take risks with the state board of equalization. so either they know something that is not common knowledge or the ebay sellers making such charges are misguided or are pocketing the fee for tax that they collect.
I don't think that I can link to or even post the company selling ID here, but I don't know of any reason that I can't mention three letters in a disjointed and mysterious sequence.
dx last
[ edited by krs on Dec 31, 2000 05:28 PM ]
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vargas
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posted on December 31, 2000 06:13:21 PM new
I can't speak to California, but in my state, only out-of-state internet sales are exempted from state sales tax.
The exemption is for "bona fide interstate commerce."
I fill out one of those pain-in-the-butt sales tax reports and hand over the tiny sales taxes I collect each and every month... and I have the canceled checks to prove it.
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