Sales Tax from 3rd party Sales like ebay

started a topic over 1 year ago

I am having a problem with Dear Systems and Xero on how it accounts for sales tax. Recently, online retailers such as eBay and Amazon are collecting sales tax on behalf of the sellers and paying the sales tax.

I have attached 2 screenshots which explains the issue.

On the Ebay invoice, it shows the sale of item plus sales tax. Ebay notes that paypal will collect the sales tax and pay for it.

When dear systems grabs the sales order total, it grabs the whole sales order amount INCLUDING the sales tax. The issue is, I never receive the sales tax which means there is an accounting issue.

Within the invoice, i prefer to add a line item in the payment, a negative asset payment to offset the overpayment. The negative payment does not like to transfer over to xero.

Is there an easy way we can account for this properly????

1 person likes this idea
  • Yes, agreed with this issue.  This is causing extra work in both Dear and our Accounting system to try and fix. It is a reconciliation nightmare.  Dear, please fix this. But, I think maybe including the sales tax in the invoice that pulls in from Ebay would be preferable just like Amazon orders. Because on our paypal statement we see the deposit from PayPal as the total including sales tax and then a separate "partner fee" to reduce our PayPal Account for Sales Tax withheld by Ebay. That would match up the Payment in PayPal to the payments in Dear. 

    1 person likes this
  • @shanelle  i agree as we;ve been working with our CPA, and we are adding the sales tax to the sales order/invoice in dear and that will help reconcile it. 

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