Home Selling in San Diego>Question Details

Debbie Golden, Real Estate Pro in Albuquerque, NM

Do Realtors pay sales tax on their commissions in CA? And do they charge the Sellesr or Buyers that amount?

Asked by Debbie Golden, Albuquerque, NM Mon Jun 4, 2012

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16
Hi Debbie,

California and Taxes are good mates down here. To answer your question, the answer is no, nor the seller or buyer pays this.......but believe me, as a broker in San Diego we are getting killed by taxes.

I believe that last year alone the realtors taxes in CA paid for the entire Solyndra solar project......lol Just kidding :-)
1 vote Thank Flag Link Fri Jun 8, 2012
Thanks everyone, no more answers necessary !
0 votes Thank Flag Link Fri Jun 8, 2012
LOL! Conrad, I don't think that's a joke. I think you're spot on.
0 votes Thank Flag Link Fri Jun 8, 2012
Why do you think there's such a human flight from New York to Florida? It's all about almost 10% state taxes. California's not far away. My advice for what it's work? Start a RE career in Florida. LOL!
0 votes Thank Flag Link Wed Jun 6, 2012
Realtors are independent business people. Commission income is gross income to Realtors. That income is fully taxable by both the IRS and the State of California. Realtors, like most business people, have business expenses that are subtracted from gross income. Everyone’s personal tax situation is different.

Sellers pay commission. They do not pay a Realtor’s taxes.
0 votes Thank Flag Link Tue Jun 5, 2012
Hi Debbie,

As with all taxes, most states operate differently. In California we pay state and Federal Income taxes, however, we are familiar with states that charge a sales tax on Real Estate and service income.

All the best to you,

Mark & Kari Shea
Shea Real Estate
Home Sales Specialists; New and Resale Homes
Property Valuation Specialists
Land Sales, Acquisitions & Consulting
Serving Greater San Diego
0 votes Thank Flag Link Tue Jun 5, 2012
Everyone, I'm a Realtor, that is why my photo is here. I was just asking about sales tax because in NM
where I have my own real estate company, the Seller pays 7% sales tax on the commission that is paid to the Realtors and the Realtors have to pay it to the state. Just wondering if you have anything like that in CA.? I see that you do not, but Sellers do pay $1.10 of per $1000 of some closing fee. That's all I needed to know - thanks.
0 votes Thank Flag Link Mon Jun 4, 2012
Hi Debbie,

We definitely pay income tax on our commissions, but the commission is paid to your broker, who in turn gives you your cut. Sales tax is a whole other tax, and brokers don't charge or pay that, unless they're selling merchandise or some other thing that you'd add a sales tax to. Agents get a 1099 at the end of the year instead of a W-2. You get your commission from your broker or directly from escrow.

Regards,

Cory La Scala
0 votes Thank Flag Link Mon Jun 4, 2012
Hi Debbie,
Realtors are typically 1099 self-employed and we tax income taxes on our yearly earnings.
The typical scenario is the Listing Agent Charges the Seller a 6% fee for Selling the property and
the Listing Agent splits the fee with the Selling Agent- aka Buyers Agent/Cooperating Broker.
Good Luck,

David R. Indermill
Dre#01232827
Re/Max Hall Of Fame
Re/Max Associates La Jolla
Cell: 858-414-5478
0 votes Thank Flag Link Mon Jun 4, 2012
No, Realtors do not pay sales tax and neither do buyer. Realtors pay income tax on their commissions and buyers have property taxes. That was a new question!
0 votes Thank Flag Link Mon Jun 4, 2012
No one that I know pays sales tax on income. We do pay income tax on our earnings like everyone else.
0 votes Thank Flag Link Mon Jun 4, 2012
Realtors pay income tax like everyone else but commissions but buyers and sellers split the commission. It all depends if you are buying or selling so depending I can give you a better answer if you let me know which one are you, selling or buying
George Samuels, Realtor
ReMax United
703-585-0273
760-747-4700
georgesamuels@hotmail.com
0 votes Thank Flag Link Mon Jun 4, 2012
Sales Tax? Not sure I understand your question correctly but no and no. And why are you asking the question this way, are you buying or selling or just wondering.???

Realtors are self employed, their commissions received and earned is their declared and reported gross income, no closing / no sale no income!

Realtors pay their own income taxes based on their states......

EdithSellsHomes@gmail.com
@Properties North Shore, 30 Green Bay Rd. Winnetka Il. 60093
Edith always works in the very BEST interest of her clients Buyers, Sellers and Investors alike,
covering the city of Chicago, all N and NW suburbs and the fine homes of the North Shore.
Edith always goes the x-tra Mile with a Smile for all her clients.
Feel Free to visit my website
Have a wonderful Day :)
0 votes Thank Flag Link Mon Jun 4, 2012
No sales tax, but we do pay CA. income tax. I'm not sure your what you asking on your 2nd question. But the Seller pays the seller's agent and the buyer's agent's commmission. Hopefully that answer's your questions. Any other questions feel free to call me 619 948-1094 thanks Raul.
0 votes Thank Flag Link Mon Jun 4, 2012
Debbie,

We are self employed. Our commission is our gross income and is reported to us in the form of a 1099-Misc. from the Brokerage. We don't pay sales tax on commission in the State of California nor do we charge or pass on any tax to the buyer or seller.

Kind Regards,

Marcie Sands
760-644-1562
Simply The Best Real Estate Co., Inc.
0 votes Thank Flag Link Mon Jun 4, 2012
Hi Debbie,
No, we do not pay sales tax, we pay income taxes. I cant speak for other Realtor's but I do not charge buyers or sellers any taxes. In fact, buyers in most instances do not pay ANYTHING to their agents! As a selling agent (the buyer's agent) I do not charge a thing! The listing agent is who "charges" their sellers a fee for their commission and it is the listing agent who pays the buyer's agents commission. Hope this answers your question!
0 votes Thank Flag Link Mon Jun 4, 2012
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