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Etsy records for your Sales Tax Returns


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Go To Great Panes, Kathryn Maloney ©2014
This post is copyrighted–you do not have permission to repost this content elsewhere but you are welcome to link to it if you’d like to share the information.

I’ve seen quite a few posts lately from folks looking to download their Etsy records to add up what they collected to file their sales tax return–also helpful for getting your info for your income taxes.

If you need help knowing whether or not you should be collecting sales tax for your in-state transactions, see here: Sales Tax Links to Official State Web Sites

Here’s how to retrieve and add up your sales tax:


Download Your Records

1. Go To Your Shop
(Direct link if you’re logged in: https://www.etsy.com/your/listings)

2. On the left under “Shop Settings” click Options

3. In the center of the page click the Download Data tab

4. Page down to Orders, choose the download type and time frame for the CSV you want to download.

To find the sales tax column:

If you choose to download the Order Items CSV, sales tax is column J.
If you choose to download the Order CSV, sales tax is column U.


Add Up the Sales Tax Collected

If you have just one rate for the entire state you can use auto-sum to add them up in a flash. Here’s how:

Autosum: Adding Up Your Totals

If you have just different rates based on the ship-to address, it’s not that easy…

Etsy doesn’t list the sales tax rates for the transactions in the download, so if your state has different rates based on the ship-to address (don’t know if it does? see the Sales Tax Links to Official State Web Sites link at the top of the post), you’ll probably be best off keeping a running list of in-state transactions and all the details you need to properly report your sales tax throughout the year. We do this in an Excel file just like the CSV that you can download from Etsy.

If you didn’t do that for the previous sales tax period, you can still use the Etsy download, it’s just a lot more work to research which zip code was in which jurisdiction. And when you’re done, you’ll have a model to build your new document for tracking transactions as they come in.

Don’t have a spreadsheet program like Excel? The Autosum link above will also hook you up with a free downloadable program that will allow you do use spreadsheets.



Visit our Etsy shop: GoTo
Go To Great Panes, Kathryn Maloney ©2014
This post is copyrighted–you do not have permission to repost this content elsewhere but you are welcome to link to it if you’d like to share the information.

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New York Sales Tax Due for Annual filers

New York Sales Tax Annual filers:

If you haven’t already, get your March 1 2012 through February 28 2013 sales tax returns in by midnight tomorrow–March 20, 2013!

See the schedule here:

http://www.tax.ny.gov/pubs_and_bulls/tg_bulletins/st/filing_requirements_for_sales_and_use_tax_returns.htm

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Quarterly Taxes???

Help for understanding what they are & when you need to pay them


Visit our Etsy shop: GoToSupplies
Go To Great Panes, Kathryn Maloney ©2012
This post is copyrighted–you do not have permission to repost this content elsewhere but you are welcome to link to it if you’d like to share the information.

So it seems the Etsy “Taxes, Typewriters, Teams!” email and the “Wrapping Your Head Around Quarterly Estimated Taxes” blog post have folks wondering what they are supposed to be doing tax-wise and plenty seem confused.

While the vast majority of sole proprietors might have to pay quarterly estimated income taxes as mentioned in Etsy’s blog post, that is not true of the vast majority of Etsy sellers since most don’t sell enough to owe enough in income taxes to file quarterly. I’m afraid that wording was scare-tactic-y, and has made many worry.

To help allay your fears, here’s the basic run down for US sellers…

None of this info is meant to be a replacement for a good small business accountant if you need one, just a way to lead you to the info you can get free from official sources.

Federal:

Income Tax & Self-Employment Tax:
Most US sellers are responsible for filing tax returns on their sales to the federal government. If you are a sole proprietor you file the schedule C with your personal income taxes at the end of the year to report your self-employment earnings (help with the schedule C here).

Quarterly Estimated Taxes: This is what the Etsy email & blog was referring to–it is just a way to pay you self-employment tax (Social Security & Medicare Taxes) as you go instead of paying it all at the end of the year. You only need to pay quarterly taxes to the federal government if you expect to owe $1,000 or more in income taxes at the end of the year.

Estimated taxes are like when you work for someone else & there’s tax withheld from your pay–for self-employed individuals there’s no one doing the withholding, so there’s estimated tax instead.

Most small sellers don’t need to worry about estimated taxes–if you didn’t owe anywhere near $1,000 last year and business is about the same, you’re probably fine but you should keep track of your books so you can estimate when you’ll need to start paying quarterly taxes.

To see this info on the IRS’ website, and to see the way you calculate tax owed before you do your end-of-year income taxes to see if you need to file quarterly taxes, see this IRS page:

Estimated Taxes on the IRS website
http://www.irs.gov/Businesses/Small-Businesses-&-Self-Employed/Estimated-Taxes

“Who Must Pay Estimated Tax” section tells you about the $1,000 number.

“How To Figure Estimated Tax” section tells you the math behind your income & expenses that determines how much you’ll need to pay/shows you if you pass the $1,000 mark–as you see on that page, you use the IRS Form 1040-ES to do that math.


State:

Income Tax:
Most US sellers are responsible for filing income tax returns on their sales to their state government (in states with income tax). Some states will require you to file more often than once a year so be sure to check directly with your state for how it works.

Sales tax:
Most US sellers (whether a business or hobby / individual seller) need to file sales tax returns with their state government for the sales tax due in-state transactions. (More on sales tax below.)

Please note:
A few states also have business taxes, property taxes or other taxes but the rules are very different from state to state so I recommend checking out your state’s website and/or calling them for more details about your responsibilities (see the link below for your state’s official website).


Sales tax is a state-based tax and is totally separate from income tax. It usually requires the seller to register first, then collect tax from the buyer & remit it to the state on sales tax returns to be filed according to the schedule the state gives you (some monthly, some quarterly, some only once a year).

Generally, sales tax returns need to be filed whether or not you’ve had any sales.

If you haven’t registered with your state yet, this post will help you find the info you need directly from your state:

US: Sales Tax & Business Registration
Links to Official Government Websites

If you need more help, I can often be found in this Etsy forum thread–just post there and I’ll respond best I can:

http://www.etsy.com/teams/7722/business-topics/discuss/9799713

I hope that clears a few things up and de-stresses a lot of sellers. :)



Visit our Etsy shop: GoTo
Go To Great Panes, Kathryn Maloney ©2012
This post is copyrighted–you do not have permission to repost this content elsewhere but you are welcome to link to it if you’d like to share the information.

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Downloading Your NY Sales Tax Records

GoTo on Etsy
Visit our Etsy shop:
GoTo

Go To Great Panes, Kathryn Maloney ©2012
This post is copyrighted–you do not have permission to repost this content elsewhere but you are welcome to link to it if you’d like to share the information.

If you’re from NY & filed sales tax returns online, you can find what you remitted to the state through your online Departartment of Taxation & Finance account:

1. Go to the NYS online account page (http://www.tax.ny.gov/online) & click the log in button:



2. This should put you on the the Account Summary Home page–if not click the tab/link in the gray/blue bar:



3. In the main part of the page go down to the “Filings” section of the page & click the drop down menu, select the type of tax record you’d like to see the records for & click the “Go” button:

(click for a larger view)



4. You’ll get a list of the tax returns you’ve filed online through the tax service. Click the blue link for the name of the form you’d like to open:


5. This should pop up a PDF file box for the completed version of the form you submitted–if you don’t have a copy yet, I recommend saving it and printing it.


Go To Great Panes, Kathryn Maloney ©2012
This post is copyrighted–you do not have permission to repost this content elsewhere but you are welcome to link to it if you’d like to share the information.

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Help with your Sales Tax Return

GoTo on Etsy
Visit our Etsy shop: GoTo

Go To Great Panes, Kathryn Maloney ©2012
This post is copyrighted–you do not have permission to repost this content elsewhere but you are welcome to link to it if you’d like to share the information.

I’ve seen a lot of posts recently from folks wondering about how to fill out sales tax paperwork, and while every state’s sales tax rules are different, this is generally how sales tax reporting goes (and it’s totally separate from your income taxes for your sales).

This is not a be-all end-all list, it’s just to help you get a feel for what is required on your sales tax return–your paperwork may include more or less details or have them in a different order. (Don’t know if you should be collecting & remitting sales tax? See here: Sales Tax)

Please, please, please check with your state to be sure this is accurate for your state before submitting your sales tax return–that includes reading the sales tax return instructions or calling the state if you need to, to confirm you understand what needs to be reported & how. I promise once you’ve done it once or twice it won’t seem so overwhelming. :)


~ Gross income ~

Start with your total income (gross) from the business:

  • Sales to in-state buyers,
  • sales to out-of-state/country buyers are included too,
  • include the money you received from buyers that was listed as shipping and/or handling,
  • this amount usually does not include sales tax you collected as that is not your income, you are just holding it for the state until you finish the sales tax form & remit the money collected.


you subtract

Amount of income on which sales tax is not due:

  • Out of state transactions is usually the biggest chunk of that–orders shipped to a buyer in another state (the one sales tax rule that is true for all states is that you don’t collect sales tax on interstate transactions),
  • items which aren’t taxed in your state (often things like clothing & food aren’t taxed),
  • some states don’t collect on shipping or the actual shipping portion of what you collect as shipping/handling–if that’s the case for your state, that portion of the shipping collected would be there too*,
  • items sold at wholesale (usually to someone who provided you with their tax exempt number/paperwork if they were in-state buyers),
  • and whatever else, if anything, your state says isn’t included in your gross income as sales-taxable.


+ you add +

Items you purchased on which sales tax was not collected but is due:

  • purchases made using your business exemption that you took some/all of the goods out for personal use (use the dollar amount you should have paid sales tax on–a partial amount if only some goods were used for personal use),
  • your personal purchases online, by mail or through other methods where the seller didn’t collect it from you but you would have owed sales tax if purchased in person at a store locally.


+

and adjust
for improperly paid sales tax
+

You also need to compensate for sales tax under or over paid to other jurisdictions including (be sure to keep receipts/records for these too):

  • Sales tax you under-paid–in many states if you bought goods in a 6% district but took them home to use them in an 8% district, you’ll owe that 2% of the purchase price to the state,
  • sales tax you over-paid–if you bought goods in a 10% district but took them home to use them in an 8% district, you might be reducing the tax you remit to the state by 2% of that purchase’s price,
  • taxes paid to another state when you didn’t keep/use the item in the other state.


= Leaving you with =

Then you have left what the state wants sales tax calculated on. For some states there’s one sales tax rate no matter where in the state the goods where shipped, other states base the rate on the seller’s address (origin-based sales tax), other states it’s the buyer’s address (destination-based sales tax)*.


So that’s the basics. Be sure to find the instructions for the sales tax return form on your state’s website if you are having trouble figuring it out even if you’re filing online–usually the instructions can clear up any issues you are having.

*If you need help finding out if your state taxes shipping or where the tax base is, see here–look fo a link to that info on your state’s website or for FAQs, publications etc that might cover that topic if there’s no direct link: Sales Tax & Business Registration Help


Go To Great Panes, Kathryn Maloney ©2012
This post is copyrighted–you do not have permission to repost this content elsewhere but you are welcome to link to it if you’d like to share the information.

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New Sales Tax Laws
(Amazon Sales Tax Law)




Go To Great Panes, Kathryn Maloney ©2011
This post is copyrighted–you do not have permission to repost this content elsewhere but you are welcome to link to it if you’d like to share the information.

I’ve seen lots of folks posting about the new California sales tax law and the same type of law in a few other states (like IL, AR CT, NC…), and there seems to be a lot of confusion–not unlike the confusion back in 2008 when NY instituted a similar law (read more about that here).

Hopefully this post will help keep you from getting caught up in the hype & put you at ease a bit.


In short:

Now that so much of our commerce is internet-based and many businesses have representatives in other states that work for them online, the states are reworking the laws so the burden of collecting & remitting sales tax on taxable transactions isn’t on the buyer, but is on the seller.

Most of these laws have both a transaction-allowance that excludes most small businesses from this responsibility and a requirement of a new type of physical presence in a state.

(For example, you’d need to both ship $10,000 in goods to NY addresses in a year and you’d need to be affiliated with a NY-presence that you pay commissions or fees to, like Etsy, before you’d need to worry about this.)


Here’s the main points folks seem to be unclear on:

  • This isn’t about a new tax. It’s tax that is already owed to the state on taxable purchases.
  • This is only about regulating who is responsible for collecting/remitting the existing taxes due to the state on “remote sales” (mail order sales, internet sales, phone sales).
  • This doesn’t mean you need to collect your state’s sales tax from buyers who are having items shipped to an out of state address.
  • This doesn’t mean you need to collect a different state’s sales tax from buyers who are having items shipped to an out of state address unless you ship a whole lot there and you pay commissions/fees to someone/a business in that state.

  • These new Amazon*sales tax laws are about re-defining/clarifying what a “business nexus” in a state is, because the current definition leaves a loophole that allows big businesses like Amazon to avoid collecting sales tax on taxable transactions even though they have representatives within that state who are referring folks to their website and receiving a commission for doing so.

    When the seller doesn’t collect sales tax on taxable transactions & the buyer does not remit use tax on those purchases, then the states aren’t getting the money they are due & money they need to properly function. This has left many states in a lurch for funding.

    A business nexus is most often defined as having a place of business in a state or having a representative (person) in a state that solicits for your business, but with the advent of the internet and online affiliations & sales, the rules of the game are changing.

    If you have business nexus in a state, generally you are required to register in that state for sales tax purposes, and you also need to remit sales tax to the state (or collect & remit, depending on the state’s laws). Now big businesses won’t be able to skate around that law by claiming no physical presence when they do indeed have people or a business in a state who represents them even if just online or through an affiliated business.


    If you are just realizing you should be collecting sales tax for your state, this post will help you find the info you need on your state’s website:

    US: Sales Tax & Business Registration
    Links to Official Government Websites


    *Amazon is suing NY over their new 2008 sales tax law to try and keep from being required to collect NY sales tax and that’s where the reference to Amazon tax laws comes in. Amazon has affiliates in New York and NY has re-defined nexus to include affiliates located in NY, which means under the new law Amazon must collect & remit NY sales tax on NY-shipped orders because they also ship more than $10,000 a year to NY addresses.

    Other states that have added similar laws have had their affiliates removed by Amazon so that Amazon doesn’t have to collect sales tax for those states until the NY lawsuit is settled (rather than Amazon suing every state who has created a similar new legal definition for a business nexus).



    Go To Great Panes, Kathryn Maloney ©2011
    This post is copyrighted–you do not have permission to repost this content elsewhere but you are welcome to link to it if you’d like to share the information.

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    What is Use Tax?




    Go To Great Panes, Kathryn Maloney ©2011-2013
    This post is copyrighted–you do not have permission to repost this content elsewhere but you are welcome to link to it if you’d like to share the information.


    Many buyers think that their online purchases are tax exempt, but if their state has sales tax when they purchase locally, they might be mistaken. It’s a common misconception and states are starting to crack down on internet purchases.

    For states with sales tax there is generally a complimentary tax that buyers should be paying called use tax:

  • Use tax is owed by individuals & businesses for items purchased without having paid sales tax that would have had sales tax on it if bought locally. (In some states that also includes tax on the shipping & handling, downloadable goods, services…)
  • Ex: Bought a book online, but the seller didn’t collect sales tax like they would have if you bought it at the local book shop? You owe use tax to the state for that transaction.


    Ex: Bought something for your business that wouldn’t qualify for exemption from sales tax if purchased for your business locally, and the seller didn’t collect sales tax? Then your business owes use tax to the state for that transaction.


    Each state decides what is and isn’t taxable for personal use and for your business use, so the rules about what you’ll owe use tax on varies from state to state–be sure to get the details straight from the state (links to official state web pages here).

  • Use tax is payable by the buyer directly to the state.
  • Many states now allow you to pay the use tax you owe on your state income tax forms in April. You can also you fill out a use tax form reporting the amount you spent that you didn’t pay sales tax on, and send a check with that form to the state with the money to cover the use tax due.


    Links to the forms to pay use tax for many states can be found on the forms & publications pages of your state’s website. Links to many of those are here: Sales Tax-Business Registration


  • Use tax is usually the same rate as sales tax.
  • If that book was $10.00 & your state (and perhaps local) sales tax is 8%, you would have paid $10.80 if you bought it locally. You probably need to remit $.80 as use tax to the state. It’s best to get the details from your state to be sure you are doing it right–some states also tax shipping costs.


  • Use tax is not a new tax–it has been around in most states for decades.
  • Use tax isn’t new, it’s just that until the internet most people didn’t do so much distance-purchasing, so the topic isn’t much talked about.


    In short…:


    Just because you bought it online doesn’t make your purchase tax exempt.

    Use tax is what you owe your state when you should have paid sales tax but didn’t. :)



    Go To Great Panes, Kathryn Maloney ©2011-2013
    This post is copyrighted–you do not have permission to repost this content elsewhere but you are welcome to link to it if you’d like to share the information.

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    New NY Business Info Page

    I’ve grouped all the info I’ve posted for NY businesses in one easy to find place–find this page any time using the gold link on the right side of the page:

    NY Sales Tax & Business Registration


    If you need help with sales tax & business laws for 33 other states in the USA, please see here:

    US: Sales Tax & Business Registration
    Links to official state websites

    Don’t see your state? Leave a comment on that post and I’ll update it as soon as possible for you.


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    service

    Three more states added–KS, OH & IN


    The Sales Tax & Business Registration
    link page is up to 25 states now, just added:
    Indiana
    Kansas
    Ohio


    GoToGreatPanes' Etsy shop


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    Have Trouble with Destination-based
    Sales Tax on Etsy?
    We do too.

    GoToGreatPanes' Etsy shop

    Go To Great Panes, Kathryn Maloney ©2010
    This post is copyrighted–you do not have permission to repost this content elsewhere but you are welcome to link to it if you’d like to share the information.

    Etsy has updated their new sales tax feature so that it is at least as suitable for sellers as Paypal’s sales tax was which is great, but for some of us it’s still not usable.

    If you live in a state that has sales tax based on the buyer’s address (destination-based) and the rate is determined by political boundaries–like counties or cities–and not on 5 digit zip codes, you may still be stuck.

    Several states are set up this way including New York, Florida, South Carolina, Washington and others, and in these states some 5 digit zip codes cross county or city lines, meaning that two ship-to addresses in the same 5 digit zip code should be charged different sales tax rates.

    Neither Etsy nor Paypal is set up to accommodate this issue so in-state buyers must be billed manually by sellers registered in most of these states if you want your tax collected accurately and need the receipt to show the actual tax due & collected.

    Washington sellers are lucky–their state allows them a little lee-way when collecting sales tax through sites that aren’t set up to deal with the full 9 digit zip codes (see here for info) a few states have similar breaks for sellers, but many of us aren’t so lucky.

    If you are in the same position as we are and are wondering what to do, here’s the only way I can find to make collecting tax accurately work:

    1. Offer “other” as a payment option in your Etsy shop,
    2. ask in-state buyers to select “other” as the method of payment in your listings & shop policies, then
    3. send them an email invoice with the sales tax rate for their ship-to address: Sending a Paypal Invoice



    Go To Great Panes, Kathryn Maloney ©2010
    This post is copyrighted–you do not have permission to repost this content elsewhere but you are welcome to link to it if you’d like to share the information.

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