Marketplace Facilitator and Filing California Sales Tax Return

[tortugascuba]

I neglected to file my sale tax returns, once eBay started collecting sales tax, directly. Now I'm filling out those forms. How do I tell the State of California, that eBay has collected those taxes ? I do not see an entry on the tax return form (CDTFA-401-A). I called an CDTFA agent back in January (2024) and they implied there was an field to enter the amount. Yet, when I filled out that form, on-line, it did not have one, and I ended up paying that years sales tax, with interest and penalty. I mailed a check on the same day (old school). There needs to be a way to correlate eBay with my resale license. Something akin to a federal 1099. 

[brightlightbookseller]

In most states you don't need to, since they're entirely remitted and recorded by eBay, but sometimes there is a form as was indicated there might be.  I'd consult a tax professional or CPA.

[slippinjimmy]

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@brightlightbookseller wrote:

In most states you don't need to, since they're entirely remitted and recorded by eBay, but sometimes there is a form as was indicated there might be.  I'd consult a tax professional or CPA.

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In pretty much all States if your have been registered to collect Sales Tax and are filing regular returns you must report the eBay sales as part of your gross and there is a field to report the amount of sales that were done via a Marketplace Facilitator.

@tortugascuba 

The best way to get the correct answer would be to contact the California Tax Dept and ask them where on the remittance form you enter these amounts.

[tortugascuba]

That's the thing. I can not find a "Marketplace Facilitator" field in the form, nor any field indicating its been collected by someone other than me. I awaiting a call from CDTFA (California's tax agency) on this matter. In addition to cutting a check for one year's taxes, which eBay had already collected, and I presumed paid to the state, they garnished my bank account, and took the money for the prior year. To rub salt in the wound, my bank charged an extra $125 fee for the transfer !

My sales are down to a 1/4 of what they were before 2022, so its not even worth it to stay around.

Not to be a dick, but only answer, if you have dealings with the state of California.

[monica-sells]

In my state, ebay sales are filed as "exempt" on the sales tax form.

[caldreamer]

SECTION A (Nontaxable Sales) 

***click on box for OTHER DEDUCTIONS****

- Sales OUTSIDE CALIF

- Shipping EXPENSE (cost to print labels)

- Returned Merchandise

- MARKETPLACE FACILITATOR (write following:  EBAY collects and pays sales tax to California.

[tortugascuba]

UPDATE: California's Tax Department (CDTFA) website discovery.

There is a "Marketplace Facilitator" selection, in the on-line tax form on the 3rd page (following page 2, about selling at the state fair) on "non-taxable deduction", on the last field all by itself.  The fields are not obvious. Clicking on the 1st box of that last field, pulls up a bunch of options, including "Marketplace Facilitator", and then in the box next to it manually type "eBay", and type the amount in the last box, of that 3 box field. There's nothing about that field, that implies that it has pull down options. You just have to know.

[simply-the-best-for-you]

EDIT - nvm OP, I see you found your answer. 

@brightlightbookseller   

Just fyi, that is often NOT the case at all.  You usually still have to file.  

@tortugascuba   

Love the name, makes me think of the Cayman Islands.  Not in CA, but in my state, there is NO DESIGNATION on the forms.  I had to call my state's Revenue Dept & ask how they wanted me to fill out marketplace facilitator sales & in my state, the answer is that ALL the fields are 0, but I still have to file!  

Point being you have to check with your own state's Revenue Dept.  Also, if you have sales that are NOT facilitated then you may have a hybrid return.  Each state is different.  Don't go by anything you read online, get it directly from the turtle's mouth!  I still feel weird filling mine out that way b/c even my gross revenue line is 0, but that seems to be what they want.  My state is so picky that I even got a letter just the other day, that I used the wrong dated form!  Not the wrong form, but the little revision date on the form, was wrong.  Worse, when I tried to get to the one they wanted, there was no way to access it LOL.  I had to make an in person trip to the Revenue Dept.  Luckily it was late Friday, so it was dead.  The hold time over the phone was over a 1 1/2 hours, so still quicker to drive there LOL.

[mam98031]

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@brightlightbookseller wrote:

In most states you don't need to, since they're entirely remitted and recorded by eBay, but sometimes there is a form as was indicated there might be.  I'd consult a tax professional or CPA.

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In the state I'm in we have to file this when we file our Business and Occupation tax reports AKA B&O.

As a business I'm required to report my gross income to the state [we do not have income taxes], but since I'm a small business I get a credit and never have to pay any business taxes, but I still have to report them.  Same with the sales tax, there is a place to deduct what amounts were collected by Marketplaces.

Some states do have difference in how things are reported.

[tortugascuba]

ALL states are DIFFERENT !!!

That's why I specifically asked about California, as that's the agency that's on my ass ! And that's where I live. I finally did find the answer, from a CDTFA agent, but not the first I communicated with. I had a incompleted form, for one of the outstanding years. This agent was guiding me through it, when we got to the "non taxable" page. Nothing in that field implied or indicated that it was a "drop down" field. I've written code for decades, and this form is an example of poor user interface !

Youtube has several videos on "Marketplace Facilitator" issues, and one specifically on the California on-line form. But that author emphasizes "zero payment". Which is both hype, and untrue. Sales tax was paid. It just did go through the seller. The EMPHASIS should have been on that specific field in the form, which he just ASSUMED was obvious. It is NOT ! I will make my own video EMPHASIZING this particular field, and repeat it a couple of times. REDUNDANCY IS A GOOD THING ! Also spelling things out instead of using abbreviations. Being COOL SUCKS !

I happen to have a California Resale Permit, which requires me to file a Sales Tax Return. Because I am only selling on eBay, it is NOT REQUIRED to have one. This is not to be confused with income tax (both state or federal), which ONLY requires reporting eBay sales, if eBay issues you a 1099 ($20K threshold).  This permit, I acquired, as I use to sell outside eBay (offline) too. Plus, my components, for making the electronic kits, I sell, got sales tax exempt. The benefit of that resale permit have since evaporated. I will be getting rid of it shortly.

I've been on eBay for a long time. In the old days, payments often came by check and money orders. eBay use to never handle the money, and got their fees, by charging the credit card, that you had filed on their site. The Paypal option, came later. Requiring access to your bank account only came with this "market facilitator" change, and eBay actually handling the money transfer, since 2019. 

[tortugascuba]

Ok, I finally saw this message. It is correct for the California online form (the question I asked). BUT, its too brief, as to not draw attention to it. A little verbiage around it, to bring attention to it will help:

1) Log onto the CDTFA website, and file or edit (amend) a return:

2) When at Nontaxable Sales (Deductions)

there will be 6 fields specific for:

Sales other retailers,

Nontaxable sales of food products,

Sales to US Government,

Sales in interstate or foreign commerce (outside California),

Sales tax included in Total Sales Reported.

These will be followed by:

Other Nontaxable Sales - To enter information, click on a box in the empty row.

!!! IMPORTANT !!! NOTE: this field has headers:

Other Nontaxable Sales, Description, Nontaxable amount

above empty boxes. The first of those, under Other Nontaxable Sales  is a "click down" field.

By clicking on that field, a menu of selections will pop up, starting with Animal feed, Boat Storage,

and down a ways Marketplace Facilitator

3) Click on this field and choose: Marketplace Facilitator

4) Click the box below Description, and enter: eBay (you type this out, yourself)

5) In the box below Nontaxable amount, enter the sales made IN the state of California.

For zero tax, by YOU, all of the Nontaxable entries must add up to your total sales. So any sales NOT in California will go into, one or more, of those prior six fields.

The To enter information, click on a box in the empty row  Message should be repeated in light gray, inside an empty box such as click for drop down options in the first box. Where it currently is, will get lost.

I know you mean well, but its brevity, means it got overlooked, until I knew the answer, and THEN recognized it when I saw it again.