Posted by William Charles on July 1, 2019
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Published on July 1st, 2019 | by William Charles

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eBay Begins Collecting Sales Tax In 13 More States

Update 6/30/19: eBay will begin collecting sales tax in the following states on July 1st, 2019:

  • Alabama
  • Arkansas
  • Indiana
  • Kentucky
  • New Mexico
  • Oklahoma
  • Pennsylvania
  • Rhode Island
  • South Dakota
  • Virginia
  • West Virginia
  • Wyoming
  • Vermont

They will begin collecting sales tax on these states starting October 1st:

  • California
  • North Dakota
  • South Carolina
  • Texas
  • Utah

They already collect sales tax in these states:

  • Minnesota
  • Washington
  • Iowa
  • Connecticut
  • District of Columbia
  • Nebraska
  • New Jersey

For more information, head to the eBay tax page.

Original post: eBay has begun to collect sales tax in Washington & Minnesota as of January 1st, 2019. eBay will also begin collecting sales tax in these other states on the following dates:

  • Iowa, February 1, 2019
  • Connecticut, April 1, 2019
  • New Jersey, May 1, 2019
  • Alabama, July 1, 2019
  • Oklahoma, July 1, 2019
  • Pennsylvania, July 1, 2019

This stems from the supreme court ruling (South Dakota v. Wayfair) regarding internet sales tax. This means that states may now charge tax on purchases made from out-of-state sellers, even if they have no physical presence in that state. I’ll let readers argue the merits of this in the comments, this is really just a note to let people know about eBay collecting these taxes.

 



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Jason Smith
Jason Smith

I hope this gets thrown out by the courts; ebay is not the one doing the actual sale – the individual who sells on ebay is. Therefore, tax should only be charged if the indivual seller sells more than 200 items.

According to this logic, maybe require visa, mastercard, and american express to charge taxes also to anyone who accepts credit card payments.

atexit8
atexit8

Thrown by which “courts”?

This was decided by the Supreme Court of the United States.

Jason Smith
Jason Smith

The Supreme Court decision was on a very specific case of a seller who had more than 200 transactions – that is different than applying it to ebay as a whole as opposed to each individual seller on ebay.

Parkerthon
Parkerthon

I am wondering if this may just be the “solution” eBay is rolling out to comply quickly vs creating a whole new system for tracking sales volume by seller and state to ensure compliance for specific scenarios. I mean, in the end it would be very difficult and computationally quite costly to calculate estimated final costs with tax on the fly each time a person goes to see what something would cost them. They’d have to run a dynamic live data query each time someone viewed their cart.

Ghhh
Ghhh

No it wasn’t, Wayfair just took it to court, it was in regards to any sales. The decision wasn’t just leveled at Wayfair. It’s up to the govt to pass a law that would make it uniform for everyone. But the decision is not going away

Lisa
Lisa

So selling on eBay means the threshold applies to eBay as a whole instead of the individual sellers volumes?

SBR
SBR

That’s not how that works. eBay sellers don’t work for eBay and eBay does not keep all the profits from sales nor does eBay at any point actually own any of the inventory being sold. Even Amazon doesn’t charge sales tax on products that are sold by third party sellers on its platform.

Kari
Kari

It seems that Amazon is – as of July 1, 2019

Kent C
Kent C

Interesting point.

Snorlax
Snorlax

Some states are writing laws that require marketplaces to be liable for collecting and remitting sales tax for transactions they facilitate on behalf of the individual sellers.

Frank

Time to set up a mail forwarding company that officially “buys” the product in a no tax state and then ships it to it final destination for a 1-2% fee.

Paul
Paul

I believe there are a few companies doing that already

calwatch
calwatch

Much less than 1% too, depending on what is being purchased.

carl wilson
carl wilson

For what it’s worth, most states are requiring out of state sellers who complete 200 transactions in the states or $100,000 worth of transactions in the state to comply and remit sales tax to that state.

Check out sales tax institute online for specifics on each states policies.

Paul
Paul

I wonder if the sales tax would apply to new items only or also used items. I don’t think it’s right to tax used products which have already been taxed when sold as new!

Nick
Nick

It’s already done with cars when you register with the DMV

Celia
Celia

That’s my thought too. I understand new items but someone selling a used video game that’s already been taxed?

TJ
TJ

GameStop does it…

Celia
Celia

That’s a valid point I didn’t think if. Same I suppose for places like Disc Replay.

What I won’t like is if they follow the Amazon way where they charge the local sales tax of the purchaser. Sales tax for me is as high as 10%. I live on the border of two counties where if I drive north, I pay 10%, if I drive south I pay 8%. Almost every store is available both directions, with sound being just a few minutes further. While it’s only 2% some might say, when purchasing large ticket items, I definitely take that into consideration. Further, some companies only charge state tax when you buy online and that’s 7%.

One thing I liked about eBay was the lack of sale tax and buying from what I hoped was a small business.

Ann
Ann

You could rent a mailbox in the south county if it becomes an issue for you.

Electroman
Electroman

Taxing agencies don’t give a hoot about whether or not something “has already been taxed”, because the laws don’t. Selling something is a “taxable event”, full stop.

Wilson
Wilson

the money you pay with was also already taxed, tax is theft so there is no reason that it must be fair

scripta
scripta

The sales tax is a tax on the sale of an item. It doesn’t care about the condition of an item. The state wants a cut of the transaction. If it only applied to new items, nothing would ever be sold as new.

StarAdmiral
StarAdmiral

Wouldn’t that be a good thing? They teach Reduce, Reuse, Recycle in school for a reason.

Pete
Pete

If you sell a car 1000 times. Taxes get paid 1000 times. Not fair at all

Steve
Steve

Government services aren’t free, and the Internet shouldn’t be used by out-of-state sellers to gain a competitive advantage over local businesses who are paying their fair share of the cost of essential public services. Be a responsible citizen, please.

Steven
Steven

I used to sell a fair amount on ebay, usually 150k/yr and I agree that all sellers should be taxed but it is too big of a burden for smaller sellers because they would need to know the tax rate of every state and every county. There should be a flat tax rate across the whole country and everyone taxed at that rate.

Beefer
Beefer

Not only that, you need a sales tax license in every state and county that a buyer is in. Literally impossible to operate.

Peter
Peter

No they don’t. Ebay will figure it out and add it to the checkout. The sellers won’t even notice it. The only sellers truely hurt are those who use their own website and don’t have the infrastructure to collect and remit. The result will be big payment platforms will take a greater market share (not only amazon/ebay but things like amex checkout, masterpass checkout). it will not make sense for most sites to simply have a merchant account and run their own checkout.

Ann
Ann

Masterpass doesn’t currently have anything to do with collecting sales tax… I just used it last night… it just provides the card info to the site you’re buying from in a more secure way than entering it directly in the store’s site. Figuring out how much to charge, including sales tax, is still handled by the store’s site.

Steven
Steven

Ebay doesn’t have to do that though. It’s not their responsibility.

Pamela Gayster
Pamela Gayster

Well here we are on July 8th, and I definitely notice it. It has blown up my bank statement, with separation of item and tax, making it a mess trying to balance my check book, when I have bought numerous items at once. We get 1 total when we buy, and suddenly a different number is in the bank statement. I’ll pay tax, but it should note it in the final sale amount, so it’s 1 line item in my check book. This sucks.

Lisa
Lisa

Most states have 100k$/200k 100/200 transaction threshold before sales tax is required. So selling on eBay meaning the threshold applies to eBay as a whole instead of the individual seller’s volumes?

Steven
Steven

Usually it’s based on each individual seller, not ebay as a whole. They are treated as separate businesses. Not sure how this new thing is going to play out though.

Jamale
Jamale

The taxation white knight has arrived

Wilson
Wilson

so is the tax rate going to go down now that they are collecting more of it? Nope, “responsible citizens” will just have less money, and won’t be able to afford to shop at local businesses

Meme
Meme

Andddd who’s stopping local business instate from selling online. There is no unfair advantage. They are welcome to sale online and can do so, if they choose to. Let’s call this exactly what it is, a money grab and chance for states to get more money to swindle, still and throw away, as per the norm.

guest
guest

your government “services” are useless. their only service is to make other people’s lives difficult

Snorlax
Snorlax

Move to Somalia if you feel that way.

Brandon
Brandon

The question is who pays the tax? Does the seller pay that cost with the seller and PayPal fees? Or does it get added to the buyer at checkout? If the buyer is paying the cost, I think it is just as fair as other places that have to charge tax on used items.

Steven
Steven

How it worked before was the buyer pays the tax and it gets passed onto the seller who will then pay the state every quarter or year depending on how much they sell and the state. Now it looks like eBay is taking the burden of collecting sales tax for certain states and forwarding it onto the states for the seller.

Staradmiral
Staradmiral

Unfortunately the tax will end up being payed by the seller. People expect a discount on ebay. Why buy from ebay if they also charge tax when you could instead get it from walmart or amazon who have better service and return policies. Ultimately ebay sellers will be forced to lower prices to make up for the tax to stay competitive against big giants.

John
John

What if the buyer intends to resale the item?

Peter
Peter

Amazon is doing this too for third party vendors. When I log into my seller account I have the below notice:

Tax collection for orders shipped to Iowa and Alabama State – Effective January 1, 2019
Based on changes to Iowa and Alabama State tax law, Amazon will begin calculating, collecting, and remitting sales and use tax for all orders shipped to customers in Iowa and Alabama on January 1, 2019.

Lisa
Lisa

Sounds like the sales volume threshold is ignored.

Jerry
Jerry

I used to work in KY Department of Revenue. I can tell you that people on Amazon and eBay absolutely hate us. Our sales tax statute states if you sell more than 3 things in a year then you are required to file sales tax return regardless you have physical presence or not. To make it even worse, you are required to file a business return if your company is a LLC or corporation. Even though income tax is likely exempt under Public Law 86-272 but the minimum limited liability entity tax (some state calls franchise tax) is not exempt and filing is required.

Every state is different, even i work in tax area but I have no clue what Ohio tax is. This new ruling is really putting an end for small seller on eBay and Amazon. image you have to research the tax laws for all different state that you sold to…lol

Kenneth Li
Kenneth Li

this just give me another reason to sell short ebay. i just WAITING for it to drop then short it !

scripta
scripta

The above comment brought to you by someone who doesn’t understand what shorting is. LOL.

MickeyMouse
MickeyMouse

I do have some issues with this…

1) Say I live in a state that does not charge sales tax on certain items (food, clothing etc.) and I have a buyer from my state (or another state that also does not charge sales tax on the same item) buying one of these items from me is eBay going to know not to charge sales tax on that item?

2) Is there automatically no sales tax collected if you ship to Oregon since they don’t do sales tax?

Burton
Burton

I’d venture to say eBay’s compliance team has spent millions and millions and countless hours over the past six months figuring this out and creating a formula for each state and each possible combination. I’d be shocked if they managed to screw it up as by doing it automatically they are essentially taking responsibility for its accuracy and the average ebayer will not have the ability or desire to recalculate themselves.

MickeyMouse
MickeyMouse

Weird, because I live in a state where there’s no sales tax on clothing by law, but I purchased from a seller in another state (CA) through eBay and was charged sales tax on a clothing item.

Joshua
Joshua

I live in NY State where certain municipalities do not charge sales tax for clothing under $110. Ebay correctly did not charge me tax for my clothing purchase under $110. However, ebay made a mistake on another tax area. I called them 10 days ago about this point. Hopefully, they will correct this point

egglayingmammal
egglayingmammal

This just leaves the market wide open for alternative sites that don’t collect sales tax. The ruling says that *can* collect it, not that they *have* to. And since eBay and Amazon are such large companies, they have an incentive to scratch the government’s back by increasing the tax burden on customers so that the government can scratch their proverbial backs with tax breaks. But they don’t have to be the only game in town. It’s time for other business to step in and start getting more inventive to meet the new market demand created by these changes.

Shawn
Shawn

Probably a stupid question but does this mean any transaction from a buyer in these states or a seller in these states will get taxed?

Ed K
Ed K

I don’t care anymore. I’ll just not sell to U.S. buyers no matter where they live. I’ve found certain countries are much better to sell to anyhow and have had more fraud cases involving U.S. buyers than anywhere else I sell to. My list of countries I won’t sell to just keeps growing, but once you’ve been established long enough you develop a more direct sale approach which leaves sites like Amazon and eBay out of the picture. I don’t need them to get buyers on some items.

J. Grant
J. Grant

The start to the beginning of the end for eBay, given sales taxes and USPS stopping subsidizing chinese post?

Jack
Jack

It serves them right . Ebay has gotten too greedy, shipping prices are out of hand and now sales tax and sales tax on shipping. talk about adding insult to injury. My buying days are over.

Ed K
Ed K

Note to self: place “United States” in my do not sell to list. Wish we could select which states we’ll sell to instead of just by country.

Kevin
Kevin

I live in Iowa, so taxes would begin on 2/1. I buy a fair amount of gold on eBay. Hopefully, they will be smart enough to not try to collect taxes on that since Iowa doesn’t charge taxes on bullion.

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