How to reflect eBay collected tax for overseas buyer in accounting software

[leisure-coast-wind-and-brass]

Hi all,

So recently eBay started collecting tax on their behalf for purchases made from overseas. I am now having to reflect this in the right account in my books.

From what I understand (perhaps wrongly so), eBay collects tax from me (the seller) to pay the tax office in the USA since my buyer lives in a state where that tax is normally collected.

So was charged approx $15 to pay eBay's taxes in the USA? 

Do I understand this correctly? 

What I need to know is how I reflect this in accounting - can I just post this as another fee, or would you do that differently?

Any help much appreciated,

Cheers

Peter

[digital*ghost]

Are you being charged FVF on the tax component as well?

That would be a bigger concern for me, as then they'd basically be charging FVF (and / or payment processing fees when the switch to managed payments comes in, and then GST on top of the FVF / processing fees for non-registered sellers) on a tax component they are 100% responsible for collecting and remitting. 

[eol-products]

I did not check ebay fees just paypal fees. Which I gather are 3.6% + fee. 

[digital*ghost]

I'm guessing not, after checking what they're doing in the US in the same situation:

"In states where eBay is required to collect Internet Sales Tax from buyers, order totals sent for processing will reflect the gross order amount inclusive of tax. The PayPal processing fee applies to the gross transaction value (item value, shipping and sales tax). eBay Final Value fee's will be based on item price and shipping cost. No eBay Final Value fee will be charged for sales tax."

So I guess that's something - they didn't confirm if the revenue from the sales tax will be on the 1099 forms generated for US tax purposes, which I think is technically relevant and useful info to know as it would at least indicate whether the tax component is now considered part of the seller's income due to this collection practice, which in turn can have implications for all sellers, regardless of location (I mean, from what I gather it's paid to the seller, incurs the PP fees, and then is automatically deducted and sent to some form of an eBay account to hold the revenue, so I dunno why it can't just go straight to that account like it used to. 

[eol-products]

If i print an ebay invoice there is no tax showing, there is however the tax showing in the ebay sales total online. Same with paypal it shows $18.20 tax added to the sale then paypal fees taken out followed by the tax being taken out. 

So sale was $260 shipping $19 tax $18.20 total $297.20

Then paypal fees removed $11 tax removed $18.20 leaving $268