eBay Tax Collected and Paid for my State
okdess
Member Posts: 4
When eBay collects tax for sales IN MY STATE, unlike for the rest of the country where eBay handles it, eBay actually pays out TO ME the tax collected on the sale. In other words, I AM COLLECTING this sales tax, and need to pay out to the state. Because the amount of sales and resulting tax collected in my own state is a small percentage of sales and is therefore a relatively small amount, I am only required to pay annually.
Currently (with eBay Managed Payments) this is all in my Wave "bank" account called EBAY as a CREDIT(Green/Deposit) transaction.
I don't see a "Tax Collected" category and don't know if this is correct, but I think I should be creating a new Liability Account (perhaps STATE SALES TAX COLLECTED) and select this as the category (thereby increasing the Liability to "The Gov".
Is this correct? And then when I Pay "The Gov", I use this account as the Source (Decreasing the liability), right?
Comments
Note in addition to above:
When I go into my Wave Chart of Accounts, Under Liability Accounts there's a section for "SALES TAX" but it says "You haven't added any Sales Taxes accounts yet". ANd unlike all the other sections, I Can't seem to add one because there is no
???
Hey @okdess , Sales Tax accounts are created by creating a Sales Tax under Settings > Sales Tax. After you've created one, you can add it to your invoices, bills and transactions so that your tax & is recorded in those areas.
Although as a support agent I can't fully advise on the best way to handle your situation, I would say that the flow that you outlined in your first post does make sense to me. If you do need some more advice though, I'd recommend reaching out to an accountant or CPA who can help you advise on the best way to handle this.
@AlexL What if we're selling something on eBay and they charge us a sales tax on the item sold? In that case I don't have a way to change the % tax amount for each transaction.
How would we set that up?
For now, I am just setting it up under Other Short-Term Liability
Hey @Cameron , assuming you're recording your eBay sales manually into Wave, you can manually overwrite a Sales Tax in the Transactions page to adjust how much it costs. If this is a different tax altogether, you can apply it and then change the amount if needed.
Let me know if I'm missing some key information here or if I'm just misunderstanding.