Question About Business licnese / Selling on Ebay & Taxes

**duffz** · 11-19-2007 03:47 PM

Hey guys,

I live in Maryland, and I Received my Business License, Federal Tax ID #, and Sales Tax Exempt (Resale Licnese) in the beginning of September. I Have since been buying PC / Computer Games from Distributors for products from Microsoft, Sony, Vivendi, Etc. I then in return sell these items on Ebay for profit, and have been making decent money doing this (Around $500-1000 a Week).

My question is, I recently got a letter in the mail from "Comptroller of Maryland", People I would send my tax form to, saying i never sent in my Sales and Use Tax return for the month of September, and saying im supposed to do it each month. I was unaware of this as I never received anything in the mail previous saying I had to do this.

My Main Distributor i Buy from is located in California (I am in Maryland) so Im buying my products from CA and they are shipped to me me in MD. Since I sell on Ebay and most of my sales out OUT-Of-State do I still need to record this as my "Gross Sale" and pay taxes on this?

Im worried that if i dont record this my distributor will send in something like "Joe Bob ordered $50,000 worth of merchandise in 2007" When im only telling the tax people i sold $1,000 (Lets just say thats how much i sell in Maryland for the year). And they will want to know what im doing with all the products and come after me.

I see alot of Online sites do not charge tax if they dont have a location in the state the person is purchasing from (such as Amazon).

I am kind of worried because it says i owe 10% interest for not sending my form in plus another 1.08% per month. I Am trying to get away with paying THE LEAST amount of taxes I have to on while still be legal (dont want to go to jail :P)

So does anyone know If i sell out of State If i need to record this and pay taxes? Or if its only In state?

Also does anyone know If im buying from CA as i said will they send in something saying "Joe Bob, Resale licnese #12345 purchased $x.xx amount of dollars?"

Thanks so much!

**ltressel** · 11-19-2007 05:02 PM

Your best bet is too consult a tax preparer. I am not and I'm sure I speak for everyone here, how the tax board do their check and balance. Better let the big boys handle these things for you. With any event-it doesn't hurt to be in a place where you are worry free because your tax preparer did your sales tax for you.

LT

**rockybookz** · 12-02-2007 06:04 PM

did you file quarterly....cause your supposed to with a retail business.
and the people on amazon and ebay dont change a tax because its is sellers responsibility to file there own sales tax. what i whould do is to minus the states sales tax % from my net profit before i take out my own income and save it. file every 3 months or what your states seems its every month which is weird..and pay the sales tax with the money you deducted. the only tax you pay is your sales tax from your net income, your business in 1 state and supplier and buyer from out of state have nothing to do with it. the supplier pay its own sales tax for suppling you.

**DarCon** · 12-03-2007 09:17 AM

I have an eBay store and what we do is report only the sales that take place in NC, which is where I am. If a person buys from me face to face, then I tax that money. If a person buys on eBay and they are from NC, sales tax is already added based on their zip code. If they aren't in NC, then I don't include that on my quarterly sales and use. I "think" that is correct because you only tax what you sell in-state.

**Hooman** · 12-03-2007 09:54 AM

Originally Posted by DarCon

I have an eBay store and what we do is report only the sales that take place in NC, which is where I am. If a person buys from me face to face, then I tax that money. If a person buys on eBay and they are from NC, sales tax is already added based on their zip code. If they aren't in NC, then I don't include that on my quarterly sales and use. I "think" that is correct because you only tax what you sell in-state.

This is how I do it as well.

**jasaunders** · 12-03-2007 10:25 AM

You always have to report sales tax, even if you have no sales. Thats where you problem lies. If you had $0 in sales in a given month, you still have to report that to the State of Maryland so they know how much you owe in sales tax. In most cases, if you forgot to file and had no sales, it is quick and easy to correct the situation. Do you file online or with the mail? Just call them and ask how you can fix it.

**Envydia** · 12-03-2007 09:38 PM

I also believe you must sell must pay taxes call the IRS if you have questions.

**DarCon** · 12-04-2007 12:51 PM

Originally Posted by jasaunders

You always have to report sales tax, even if you have no sales. Thats where you problem lies. If you had $0 in sales in a given month, you still have to report that to the State of Maryland so they know how much you owe in sales tax. In most cases, if you forgot to file and had no sales, it is quick and easy to correct the situation. Do you file online or with the mail? Just call them and ask how you can fix it.

I forgot to add that part. He is correct.

**rockybookz** · 12-04-2007 06:43 PM

im not sure but i think in some states your dont only file your sales tax its also your income tax, ss tax and federal tax, i may be wrong but dont you have to pay the gov also, not just the state and county.

**rockybookz** · 12-04-2007 06:47 PM

im starting an internet retail business selling dvds, cd, and video games. so i whould like to know what taxes i really need to pay beside my state/ county tax.