Sales Tax Advertising Income & Affiliate Income

Reporting this as gross sales

[TammyJo]

How is this reported on a CA sales & use tax return?

1.Since this is a "non-tangible" sale, do I leave this out of the TOTAL (gross) SALES total since there is no where on the form to deduct these types of transactions?

2.Is it considered a sale when advertising is sold or affiliate commissions are received?

Thanks in advance

(Sorry if this question has been asked before, did a search and didn't find it anywhere)

[hunderdown]

Unless California takes a very different approach from that taken by other states, affiliate commissions and advertising income is income, either personal or business. But check with a tax attorney or CPA.

[TammyJo]

Thank you so much for your reply!

Yes, you are correct, it does get reported for income tax and claimed as part of the companies income.

I should probably have been more clear about what type of tax and referred to "taxable sales" for State Sales Tax reporting reasons.

I just don't know how to break it down on the form. I don't sell tangible items any longer, just receive commissions and income from advertising/affiliate. So I don't believe they are really a Sales Tax item, but not sure if I include them in my Gross Sales total and if so how do I take them out as non-taxable (they are gross income, but for this form I don't even know if they are considered "sales" per say)

Right now I'm trying to find a CPA, one that is versed in online income...it is a little difficult in my area...lots of old school thinking :) For now I was hoping to complete this form myself.

Help is greatly appreciated!

[skibum]

Most places just send out 1099s so for federal, state and local, I just report it as personal income and write off ad, hosting, utility, hardware and related expenses.

[chaitan]

Right now I'm trying to find a CPA, one that is versed in online income...it is a little difficult in my area...lots of old school thinking :) For now I was hoping to complete this form myself.

are you talking about the 8.75% sales tax?
no, affiliate income are not considered "sales", you won't collect 8.75% sales tax on behalf of anybody, but income. My CPA simply treat my adv/affiliate $$ as income, no matter I made it from oversea country, other state or local state.

[TammyJo]

Thanks Chaitain...that is the answer I was looking for!

I think I will put the total income as the Gross SalesI'm just looking for a misc section to deduct this amount so I don't have to pay state sales tax on advertising income.

Thanks again everyone for your help!