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US taxation and sales tax issue I started ebay business with…

US taxation and sales tax...
US taxation and sales tax issueI started ebay business with a Korean relative. We don't have a partnership agreement. The partner has an paypal and ebay account, gets a sales order, and let me dropship the orders. I ship the order items to the buyers. My entity is sole proprietorship in CA, and the partner is just an individual, not business entity. I am going to bookkeep the sales and the expense into quickbook.After sales, the partner transfers the sales amount of 75% to me.
In our business, how can I set up the income and the expense? For example, a camera was sold for $100, and $75 was transferred to me, and $25 was the partner's commission. COG was $25. Should I register $100 as income or $75 as income? How about the sales tax if the sales order comes from CA?Thanks.
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10/24/2017
Barbara
Barbara, Enrolled Agent
Category: Tax
Satisfied Customers: 6,387
Experience: 20+ years of experience in tax preparation; 30+ years of experience as a real estate/corporate paralegal.
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Welcome to Just Answer. My name is ***** ***** I will be happy to assist you.

Because your "partner" is receiving the full amount ($100), you would list your total income as $75.00. You would then list any expenses YOU incur against that income.

Please let me know if I can assist you further.

Thank you and best regards,

Barb

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Customer reply replied 8 months ago
if a buyer is within Ca, should my partner set up a sales tax or no sales tax even if I ship it within CA?

CA is a combination of original and destination based as to sales tax.

In CA, if you are based in that state and make a sale to another location in California, any city, county or state taxes will be based on the seller’s location (origin), while any district sales taxes will be based on the customer’s location (destination).

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Just following up with you to see if you have any other questions. If so, please let me know so I can continue to help you.

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Customer reply replied 8 months ago
my partner cannot collect sales tax into his account, because his business entity is non business entity.
as mentioned above, how can I register $75 in quickbooks? is the sales income or the commission? or other account ? should I report $75 as the sales revenue to IRS or local state government or city ?

In your original question, you mentioned that you received $75, but the sales price was $100, and your partner kept $25.

I will opt out so another expert can assist you.

Thank you.

Barbara
Barbara, Enrolled Agent
Category: Tax
Satisfied Customers: 6,387
Experience: 20+ years of experience in tax preparation; 30+ years of experience as a real estate/corporate paralegal.
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