Understanding Sales Tax Reports for Marketplace States

Let’s start with the good news! If you are in one of nearly 40 Marketplace States (see our taxability matrix), you don’t really have to understand the sales tax reports! That is because RunSignup has the obligation to calculate, collect, report and remit sales tax for all events and clubs in Marketplace States (although you still need to do some).

Transaction Report

There are two types of reports – on on the transaction level and one on the Summary level. The Sales Tax Transaction report show individual sales tax transactions. There is quite a bit of information in these that you don’t really need to understand, but we will explain in case someone asks you.

The ID is the sales tax transaction id. There can be more than one sales tax id per financial transaction (a customer makes a purchase with a credit card) (you can see the transaction id on the lower right above the orange button) in RunSignup. This happens typically when there are multiple parties involved in paying the sales tax. An example is if you ship an item to a non-Marketplace state and you collect tax and remit it in that state there would be a tax id for that part of the financial transaction and there would be the part collected by RunSignup in a separate tax id.

In Marketplace states, most of the time, you will only see one tax id per financial transaction.

The above transaction shows that $1.52 was collected for the state fo Washington, and is remitted by RunSignup. That means RunSignup has collected that $1.52 and will pay the proper tax.

On the far right, you will see that the $1.52 is actually split between multiple taxing authorities. In this case:

  • State of Washington – $0.98
  • King County – $0
  • Seattle – $0
  • Kirkland – $0.54

Note it is important to track the $0 amounts as those are exempt transactions (Washington does not charge tax on race registration or processing fees – only on tangible products like shirts) because all transactions must be reported.

Clicking the Line Items button shows the details:

In this case, the registration cost of $60 is exempt. It is reported to Washington, King County and the city of Kirkland, where the race is being held.

The “Other Generally Taxable Items” is how we automatically categorize any Add-on (you can set up a more specific code). This race sells a shirt, and the tax was calculated to meet the sales tax rules of both Washington ($0.98), King County ($0) and Kirkland ($0.54) on a $15 item.

The Processing Fee is not taxed in Washington (it is in 7 states that you can see in the taxability matrix), so that amount is exempt.

Summary Report

The Summary Report shows the summary of what is owed by whom to which local entities. This is basically the report that RunSignup (in Marketplace states) or you (in non-Marketplace states) will be giving to the state and potentially local entities on typically a monthly basis. Here is an example from a race in Washington that had 26 transactions since we turned sales tax on in that state yesterday:

For filing taxes, we must report both the exempt amount and the non-exempt amount. In Washington, only tangible items are taxable, so race fees and processing fees are not taxable. That is why there is so many $0 in the Sales Tax column.

For those events in non-Marketplace states, I am sure you will be wanting your state to pass a Marketplace law soon to remove this burden.

Leave a Reply

Leave a Reply

%d bloggers like this: