FAQ: Sales Tax Collection & Remittance through LivePayments
LiveAuctioneers has compiled a list of the most frequently asked questions regarding our sales tax calculation, collection, and remittance services. Please review the below information and also refer to our internet sales tax article to view the complete list of states where LiveAuctioneers collects and remits sales tax.
What is Wayfair vs. South Dakota and how does it affect me?
The outcome of Wayfair vs. South Dakota eliminated the need for a remote seller to have a physical presence in order for a state to require sales tax collection. The new standard (economic nexus) allows states to require remote sellers to register and collect based on economic presence (measured by sales and/or transaction volume). LiveAuctioneers tax services simply make it easier to comply with this legislation.
Am I still obligated to remit sales tax if I am using LivePayments?
Sales that are not collected through LivePayments are not covered by our free tax services. You are responsible for calculating, collecting, and remitting the appropriate sales tax on all other sales. While we provide reports with bidder locations and sales tax breakdowns for all invoices paid via LivePayments, we are unable to provide the same information on invoices paid outside of our platform. Therefore, most auction houses find it easiest to collect invoices exclusively through LivePayments.
How does LiveAuctioneers account for tax exempt bidders?
Tax-exempt bidders can upload resale certificates or sales tax permits to their LiveAuctioneers account profiles. All provided information is stored on a secured server. Once a bidder’s tax-exempt status is verified, sales tax will be calculated accordingly and automatically reflected in their invoices. Purchases made in states that do not impose sales tax, and tax-exempt items will not be subject to tax. Tax exempt bidders can follow these steps.
How do I report and file taxes on items paid for via LiveAuctioneers?
We understand that each auction house reports and files taxes a little differently. You can find and download a csv file of your transactions by visiting your dashboard > Payments > Reporting.
For filing purposes please note:
- For filing purposes you are often asked to identify location of bidder, taxable income, sales tax collected, and taxable income for invoices paid outside of LivePayments (this will need to be manually calculated)
- Taxable income collected via LivePayments is generally reported as non taxable or exempt (verbiage varies depending on state)
- Some sellers may also be required to provide an additional form or notice regarding LiveAuctioneers sales tax collection. You can find state by state certificates and notices here.
Please note, these are just some common sales tax related questions the LiveAuctioneers team receives. Please always refer to your tax adviser and specific state tax laws, regulations, and rulings.
What tax document(s) should I expect from LiveAuctioneers? When & How will it be sent?
If you processed payments through LiveAuctioneers, your 1099 as well as other tax related documents will be sent by mail to the address registered to your LivePayments account by our processor, Worldpay. Your 1099 for the previous year should arrive no later than the middle of February. If it does not arrive or if you wish to obtain a digital version, please reach out to payments@liveauctioneers.com.
More information about what a 1099 is and how it is related to your tax filings is accessible here.