How can you create reports from your Etsy sales data that you can use for your quarterly sales tax filings? We'll show you how in this blog post.
Let's cover a little about what quarterly sales tax is first so you know exactly what you are looking for (if you are familiar with the way that sales tax works, feel free to skip the next couple of paragraphs).
As an Etsy seller, you are required to collect sales tax from customers that are based in the same state you are. This is known as your "nexus" - you can have more than one nexus if you have more than one presence (i.e. a warehouse in one state and a shop in another) however for many handmade sellers their one and only nexus will be their home. Once you understand where you have nexus, you'll need to ensure that you are registered to collect taxes in these states.
Finally, you'll need to make sure you’re now charging sales tax to your customers. This can be done by setting up some tax rules in Etsy for your shop - you'll choose each state in which you have nexus and then create a sales tax rate for each one. You can also create tax rates at the zip code level, if this is required for your state.
For more details on state sales taxes and how it applies to Etsy sellers, please see our blog post: State Taxes: A Handmade Sellers Guide
Once you have set up your state sales tax rates, your customers will be automatically charged sales tax on your behalf. When your next sales tax filing is due, you'll now have to calculate how much sales tax you have collected for each of your nexus states.
Unfortunately Etsy doesn't provide this information in a lovely easy to generate report. Although your Etsy Stats page gives you the sales total for a time period, but it’s not always correct and up to date. In particular, it doesn't include any shipping amounts, which is important if your state taxes require shipping to be included. To find your sales tax figures, you'll need instead to navigate to a slightly hidden away area of Etsy to generate a download file which you'll then be able to use to filter out your nexus state sales.
To do this, you'll want to follow these steps:
- Go to your Shop Manager area
- Once in your Shop Manager, navigate to Settings by clicking on the menu item
- Now find the menu item called Options in the list that appears
- This is essentially your Advanced Settings area of Etsy. From here, you'll want to click on the tab called Download Data
- Scroll down to the area called Orders and select Orders from the dropdown menu called What type of CSV would you like to download?
For your quarterly sales tax return, you'll need to download each of the months within the financial quarter as seperate files. Alternatively, you can download all year to date sales by leaving the month dropdown blank - in this case, you'll need to remember to to filter out all other months apart from the ones you need.
Click the Download CSV button. This will start the generation and download process to your computer. This file is called a CSV as it is essentially a text file that has been formatted with commas between each field (the acronym CSV is short for "comma seperated values"). The great thing about these files is that they can be instantly opened in any spreadsheet program such as Excel, Numbers, Open Office or even Google Sheets.
Open your file in your spreadsheet. From here, you'll want to find the column called "Ship State" (M) and filter it to only show the nexus states you need to report on.
Now locate the “Sales Tax” (W). This column will show you how much in sales tax you collected from your customers on Etsy. You'll want to sum this column to calculate your total tax for each state.
Looking for an easier way? Craftybase Inventory + Bookkeeping is designed for handmade sellers just like you and features automatic, daily importing from Etsy. Using our software, you'll be able to generate your total state tax amounts at the touch of a button. Free 14 day trial available »
Overwhelmed at the thought of getting your record-keeping in order for tax time?This free eBook will guide you through what taxes you are liable for, when they are due and how to calculate them.
Topics covered include:
- Do I have to file if I’m just a hobby business?
- Common business structures
- Annual Income Tax
- Quarterly Estimated Taxes
- Sales Taxes
- State Income Taxes
- Bookkeeping Software
Download our free eBook now »