Tax Responsible
Hello sellers! This blog post is directed to you!
As you might have noticed by now, a certain change was deployed to the platform last Friday pertaining to taxes.
Tax details never make for an exciting read, but this is important stuff so bear with me.
This is the gist of it:
As a platform that deals with transactions between sellers & customers and also issues payouts, we are legally required to provide some information to the IRS (US government) for tax purposes. This is the information that we are now required to request from you.
At the end of the year, we must present all of that information along with the sale numbers for all of our sellers. You will also need this information to properly complete your own tax (at least if you are in the US). Our accounting team will provide you with all the documents needed to properly prepare your taxes each year.
Basically, the IRS wants to know where the money comes from, and where it goes.
The new forms you will find on your store settings page are directly taken from the IRS and represent the official forms you must complete to reduce or eliminate any backup withholding that might apply on sales from your store.
Backup withholding (for US residents) or NRA withholding (for international sellers) refers to a tax that is taken from sales made by or to us residents. Depending where you are selling from and what kind of entity you are selling as, this will apply differently to you.
For US residents, as long as you fill in the form, this tax disappears. Simple.
For international sellers, please contact your tax adviser for directions on how to fill in the form properly. In many cases, for countries with special treaties with the US, the withholding on sales made to US residents can be reduced or eliminated.
Withholding does not apply on non-US sales if you are an international seller.
For US sellers, backup withholding is at a rate of 28%, and 30% for international sellers.
Cubebrush will collect this tax and remit it quarterly (or weekly based on volume) to the IRS.
This is the simple version, for more on the subject please visit the IRS's website here and here.
What do I need to do?
Simply fill in the form, or click to skip it, but act on it!
This Friday October 30th, we will disable all stores that have not done either. You will of course be able to re-enable your store, but understand that skipping the form or leaving it incomplete will result in the full backup withholding tax being held on future orders.
We are legally required to do this!
After the form has been updated, it's back to business as usual. We'll send you the proper documents at the end of each year and… that's it!
This is sensitive information, is it secured?
Yes. We know full well how important it is to store this data securely especially with the few attacks on big tech platforms recently. The sensitive information entered on those forms is fully encrypted and stored on secure servers.
Once the information entered and saved, the form disappears for privacy and the appropriate withholding rate is displayed.
If you have any questions beyond this, don't hesitate to contact us at [email protected] and we will be happy to help as much as we can. You can also read more on taxes in our help center. For any kind of tax advice, consult with your tax adviser!
Fill-in your forms, don't give your hard-earned money away to the IRS!
-Marc & the Cubebrush team
