@thecharizardauthorty , thank you! This is awesome and very convenient!
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Amazing, already saved!
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Subbed
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Thank you so much for the extremely informative brief!
Definitely some great tips that I will be using going forward 
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@thecharizardauthorty, GREAT Information!!!
I do have one question regarding State Sales Taxes - hopefully you’ll be able to help me with this… I recently obtained my Mass. Sales Tax ID. Now that I have this and am a “registered business” within MA it’s going to be necessary for me to report sales (and collect) the MA Sales Tax. Since I’m a one-man operation within MA exclusively, I’m only required to report / collect Sales Tax from people living within MA.
My question to you is; how often do you report / pay Sales Tax? Is that something you need to do every Quarter / Year… Also, how do you find eBay Sales that occurred within MA? Basically, how can I see how much I have sold within the past Quarter / Year to people living within MA?
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Most likely the state will start you off every month. When I was in retail, I was transitioned to every quarter since there was a higher amount of cash flow for sales tax. Usually with each state there is a monetary mark for how much you report. If you are below that mark, then you report monthly. If you are over then you report quarterly.
I use Godaddy. This has the option to sort by state.
You can also download activity each month from paypal and there will be a column that shows you the amount of tax you collected. As long as you have all of listings on ebay set to collect the correct amount of tax, you can simply take the sum total for that month or quarter. Steps:
- Paypal
- Click “Activity Download” on the left column
- Click “Customize report fields” to make sure “Sales tax” is selected
- Customize the date range and format(CSV works fine with excel)
- Click “create report”
Sometimes it can take a little while to generate. If you have not gotten it set to collect tax on ebay you can actually back calculate the amount. I can help you with that calculation, but getting the number in sales can be a small headache. You will have to make sure the “State” is a selected download field for your activity and then find each transaction individually on your download. I would suggest letting ebay charge the tax though!
Also with sales tax this is a transfer of money. If you charge sales tax, the easiest thing to do is count that as income, then you can simply deduct your tax payment or transfer to your state. If you choose to not count sales tax as income, then do not deduct your sales tax payment.
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Nice post Rusty. Great to get a lot of the link I use all in one place and actually some new ones for me too. I am nearly out of my laser toner and labels, so the move to thermal is happening soon and it is nice to see what you use.
@thecharizardauthorty sales tax is such a tricky animal. I have the unfortunate situation of living in NY where it varies widely by county/town. It is as low as 7% and as high as nearly 10%. On eBay I have found no way to charge each county/town independently and have it automatically charge them the proper amount based on their shipping address. The only solution I have found is to charge everyone in NY a flat 7% and then when I remit my yearly taxes I have to go back through and I sort each NY sale by zip code, lookup the proper rate for each and remit the full amount to each individual tax coding. It amounts to about a half a days worth of headache in excel and it costs me $100-$200 a year typically in the shortfall I have to make up for NY buyers residing in a tax location with over 7% tax.
How does your state work Rusty? One flat tax? I wish they would just throw out all the ridiculous convoluted tax systems they have when it comes to the internet and just charge a simple flat 4-5% or something on all internet purchases that was automatically collected and I could just remit a straightforward amount at the end of the year.
@oldskoolpokemon. In NY everyone has to start filing and remitting sales taxes quarterly. If you on an annual basis after your first year do less than $3,000 in sales taxes (which I do) then you can switch to annual filing. I forget what the threshold, but larger business can also be transitioned to monthly filings if they are high enough $$$ amount.
A big point to add to #10 is that you cannot simply write off all your paypal purchases in a given tax year. You must track what you have in inventory and you can only write off the purchase prices of what you actually sold or “cost of goods sold” (COGS).
E.g. buying a PSA 9 base 1st charizard a couple years ago for resale for $3,000 wouldn’t have given you a $3k writeoff back then, but simply increased your inventory by $3k and it wouldn’t have factored into your cost of goods sold. Upon selling this year for $6,500, your inventory would be reduced by $3,000, your cost of goods sold increased by that same $3k and your gross receipts would have increased by $6,500 netting you a taxable gain of $3.5k.
Always consult with a tax professional local to you if you have any questions when it comes to taxes. Tax situations vary so heavily by individual and by location. I paid a professional CPA for 3 years to file my taxes until I could learn the ins and the outs of it and only recently started filing my own.
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Certain states are origin based, others are destination. Some states have flat taxes, other don’t. This is one of the issues with sales tax. Across states and individual counties within the state there is no standardization. I made the mistake on ignoring sales tax my first few years and the interest really added up.
Since the rate is not variable on eBay and you have to charge based on destination, you could always charge the higher end tax amount and then forward calculate the amount of taxable sales. That would save you from losing out money-wise but it would not save time on getting the information of each buyer. I have a spreadsheet that calculates taxable sales based on the actual amount you sold and actual collection. Here is an example:
Ebay Total Sales (w/ tax collected) $1,000.00
Ebay Sales Tax Collected $80.00
Ebay Sales (Taxed) $1,185.19
Ebay Sales (Untaxed) -$265.19
ADJ Ebay Sales (Untaxed) -$248.42
ADJ Ebay Sales Tax Collected $63.23
ADJ Ebay Total Sales $936.77
Total Sales Tax Collected 63.23
Total NC Sales $936.77
Sales Tax Due $63.23
So in this example there was $920 in actual sales with $80 tax collected for counties with a 6.75% total rate. Since too much was collected, you recalculate based on each variable county rate. In this case I had actual $936.77 in sales with $63.23 sales tax to be reported. It works the same way if you collect too little or none at all. If you make a $1000 cash sale without collecting tax, your tax is not $67.50. You technically made a $936.77 sale and need to transfer back to the state $63.23 in sales tax.
You may already do this, but putting the numbers in something like an excel is the easiest way to correct the amount and not get overcharged. You could technically do it without changing your sales tax rate on ebay - but would take some extra time. Personally I would go with the higher one though
@thecharizardauthorty what I am doing currently was recommended by my tax professional. According to him it wouldn’t be proper or excusable to over collect on anyone and I could be in jeopardy of some legal issues of over collecting as well as some people would notice and not take too kindly if they pay 7% where they live, and then my eBay page tries collecting something like 8.75% from them, which is the rate where I live. That is why I charge the flat low end of 7% and cover the rest myself.
I also ignored it a few years as well and then paid 2-3 years past due with penalties and interest. Sucked to have to do but I know I am all above board now and sleep easier at night for what only amounted to a few hundred bucks anyways and a bit over $100 a year going forward tops. If a flat internet tax came out one day it would make it a lot easier, but in the meantime I hope someday eBay will add some automated thing where it was calculated properly by delivery address and not just made with a NY state only rule.
If you undercharge then you should at least adjust your sales back, but I definitely get covering yourself and paying the extra.
I saw where many states have already implemented caps for transactions or $ amounts delivered to them from out of state. After that even online sellers will have to pay sales tax for those states… I just talked to my accountant who is getting me the new chart for that. They will be like paypal with 1099’s but for sales tax!
this is exactly what I needed thank you!
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Thanks for taking the time to write this out.
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Updated with Merchant phone support number in # 11.
Please don’t abuse this if you are not normally qualified for merchant support and understand it is possible for them to turn you away, although I do not think they will.
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Damn it, I cannot find the direct link any more. But a nice addition to this list would be the Business Policies for Shipping etc. Someone on E4 pointed this out to me a few weeks ago and I set it all up. Now I don’t need to annoyingly edit all listings any more when something changes with postal fees.
@thecharizardauthorty this is very helpful. Thank you for this great information. Reading this thread is making me really want to dive into eBay. I have some extra cards and some bulk I could sell, but I always end up sitting on it. I can’t bring myself to sell much of anything for some reason.
Can I ask how you got involved in this and how you got to the level you are today?
Thanks - Zach
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I collected a little when I was in Elementary school and then switched to Yugioh in Middle school and High school. When I went off to college I ended up bringing my small Pokemon binder, and saw I was missing a few cards from the original 3 sets. I ended up selling a few extras to purchase these. It just grew from there until I graduated in 2012. Then I realized I could make more money selling Pokemon part-time on ebay, than I could full time with my degree.
I just stuck with it and have sold(while definitely collecting) ever since.
As for strategy… I have no problem listing $.99 cards all day long. My approach has been a little different than many in that area. I try to put all levels of product out there, and do it consistently to bring in new customers as well as keep existing customers interested. IF you put in the work yourself, you can still make money on a buyer who purchases a $.99 card with free shipping.
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Indeed; Returning customers and word of mouth go a LONG way.
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I got back into Pokemon the same way, albeit later. I found my old binders in 2014 and decided to fill them out. At the time I had already been on eBay for coins, and video games so Pokemon was just added small time as another item to flip to fund collecting. Steins came in 2011 ish before Pokemon hence the name.
I have EBGames to thank for getting into selling on eBay way back in 2004. I took a few PS2 games to them with hopes of trading them in for a new game. They offered me pennies on the dollar from what I knew they were worth and so I went, created an eBay account and the rest is history. I wish so bad I got back into Pokemon then and had the additional decade under my belt, but I’m still glad I had all that extra time to become well versed with the eBay platform so when I got into Pokemon it was easy to get rolling.
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