1099 & internet sales tax

[vicky8695]

This may sound like a dumb question, but, does the earnings amount on my 1099 include the internet sales taxes that eBay has collected from my PayPal account since November 1, 2019?   In other words, do I need to find out how much tax was collected by eBay on every transaction and deduct it on my income taxes?  Of course I do that for shipping, customer refunds, MY state sales taxes I collected and paid to state, but, I'm unclear about if it's my responsibility to find out the tax eBay collected and the need to deduct it, as well.  I may have misunderstood, but, I thought since eBay was taking the sales taxes (for other states) from my PayPal account that my 1099 would have reflected the amount of money that came into my account MINUS the internet sales taxes collected by eBay.  I'm just very confused.  Thank you for any help or information.

[Nordy114]

This topic is a few months old now but did you ever find the answer to your question? I'm dealing with this now and am trying to figure out if the 1099-K "gross revenue" value is including the sales tax deducted/applied or not. Obviously, the total number to subtract deductions from would be totally different if this were the case.

[vicky8695]

Starting in November 2019 the Internet Sales Tax that eBay had been collecting began showing as gross income on your PayPal account.  Prior to that eBay was collecting the tax and it was already deducted from the customer's payment total on PayPal.  Since November, the entire amount the customer paid is shown as gross income on your PayPal balance, so you need to keep a record now of the internet sale tax on each sale and that tax can be deducted when you do your Federal taxes.  I went back to November 2019 and made a copy of each PayPal transaction showing the tax for November and December and used that to file my 2019 Federal taxes.  In 2020, the state sales taxes customers are paying are shown on every transaction and it will say "eBay collected", but, since it's a part of each customer's total payment, you must be responsible for keeping a record of the amount so it can be deducted from your gross income when you file your Federal taxes.