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Taxes on Ebay
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56 posts in this topic

Taxes are getting collected on ebay soon.

 

State | Effective Date
Minnesota | January 1, 2019
Washington | January 1, 2019
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

 

https://www.ebay.com/help/selling/fees-credits-invoices/taxes-import-charges?id=4121

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Makes no sense for eBay to collect

my understanding of the decision is that unless you make sales totaling a certain amount - for example 100k throughout the year - sales tax is not triggered. 

So is eBay collecting sales tax even if  an eBay seller make a few hundred or few thousand dollars in sales only to that state

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It would seem that eBay is taking care of the whole thing. As long as I don't have to do anything and it's all automated through eBay, as a seller, I couldn't care less. I'll be less forgiving when I have to pay sales tax on everything I buy through eBay though once CA gets around to forcing their hand. 

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44 minutes ago, LordRahl said:

It would seem that eBay is taking care of the whole thing. As long as I don't have to do anything and it's all automated through eBay, as a seller, I couldn't care less. I'll be less forgiving when I have to pay sales tax on everything I buy through eBay though once CA gets around to forcing their hand. 

So they automatically applied sales tax to the book you sold? What state?

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7 hours ago, LordRahl said:

It would seem that eBay is taking care of the whole thing. As long as I don't have to do anything and it's all automated through eBay, as a seller, I couldn't care less. I'll be less forgiving when I have to pay sales tax on everything I buy through eBay though once CA gets around to forcing their hand. 

I would agree that if E-Bay collects and distributed the tax then I don’t really care.  It makes it a little harder to make sales but if everyone eventually has to pay sales tax then it will work out.

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I don't believe eBay will automatically collect it and disseminate the taxes. From what I read in the posted link and experienced when testing it out a few years ago, you need to set up a tax table. This will automatically charge the buyer the appropriate sales tax for their state, but it is then up to the seller to report and pay taxes.

I read through most of the regulations in the states above and there does appear to be an exemption if you gross less than 10K in sales in the state. 

I'm not a tax professional, so my understanding may be a little off, but I wanted to provide some additional info.

Edited by awakeintheashes
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42 minutes ago, awakeintheashes said:

I don't believe eBay will automatically collect it and disseminate the taxes. From what I read in the posted link and experienced when testing it out a few years ago, you need to set up a tax table. This will automatically charge the buyer the appropriate sales tax for their state, but it is then up to the seller to report and pay taxes.

I read through most of the regulations in the states above and there does appear to be an exemption if you gross less than 10K in sales in the state. 

I'm not a tax professional, so my understanding may be a little off, but I wanted to provide some additional info.

eBay will collect and remit sales tax for the impacted states.  The seller need not do anything different from their current routine.  Sellers are still responsible for collecting & remitting tax for sales within their own state.

taxes-import-charges?id=4121

Sales Tax eBay.JPG

Edited by Kreton
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1 hour ago, awakeintheashes said:

I don't believe eBay will automatically collect it and disseminate the taxes. From what I read in the posted link and experienced when testing it out a few years ago, you need to set up a tax table. This will automatically charge the buyer the appropriate sales tax for their state, but it is then up to the seller to report and pay taxes.

I read through most of the regulations in the states above and there does appear to be an exemption if you gross less than 10K in sales in the state. 

I'm not a tax professional, so my understanding may be a little off, but I wanted to provide some additional info.

And that's the problem. The Supreme Court ruling and everyone agreed, "small business won't be affected." But what is "small business"? $10,000 in gross sales is nothing. That's what a smallish seller might get in a weekend at a decent convention. You can sell a handful of books and gross $10,000. It's a literal drop in the bucket. According to the Small Business Administration, you're a "small business" if you have gross receipts at or below a certain threshold, depending on the industry, and at or below a certain number of employees. The minimum for all industries is $750,000 and 100 employees. You have less than that, in any industry, you're a small business.

For argument's sake, if you did $500,000 in gross sales, you could theoretically have done $10,000 of business in each and every state. And you're almost certainly going to pass thresholds in at least some of the states, if they even have them. 

Does that mean Washington state isn't going to try to come after their sales tax for those in other states who make sales to their residents...? I highly doubt it. "Our records show that you had $7,834 in sales to the residents of Washington for the year 2019, and you owe the state $653 in sales tax. Pay up." Repeat for all other states that collect sales tax. But eBay says they'll take care of all of that for you...?

It's a disaster waiting to happen.

Edited by RockMyAmadeus
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32 minutes ago, Kreton said:

eBay will collect and remit sales tax for the impacted states.  The seller need not do anything different from their current routine.  Sellers are still responsible for collecting & remitting tax for sales within their own state.

So the question becomes "does that collection and remittance have ANY impact on sellers in ANY way?"

If the answer is "no"...fine.

But what if the answer is yes? Who bears the ultimate responsibility for reporting and paying sales tax? Who will the states go after if they don't get their sales tax? eBay or the seller? (Answer: the seller.) What if eBay screws it up, as they are prone to do? The fact that sellers now need to keep this in the back of their minds at all is an additional burden. 

"eBay is just a venue"....remember when that quaint old idea was still in force...?

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I took it as you can set the price that you want to sell at, also set up when doing the listing the state's and how much "tax" is appropriate, when a buyer hits your original BIN price then eBay according to how you set up your listing will the charge them the appropriate tax at check out.

Then you get this tax money as well as purchase price in PayPal, and eBay will invoice you the selling fees AND the tax fees for your period statement. Then you would pay it, and eBay would distribute the amounts to the appropriate states, however ebay is invoiced or however states will demand payment from ebay....

I just don't want to have to remember states and "their tax rate" every time I list, I mean there are 50 states, hopefully as all states will end up charging sales tax I hope eBay makes it automatic without manually filling it out when you list..... that's absurd O.o

 

Edited by ADAMANTIUM
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Looks like Facebook groups are the wave of the future.  

 

This is what they will never get, the more they tax the people, the more the people will find ways to go about their business to avoid the tax. 

 

I say this as I know of someone that may or may not be moving furniture into a neighbor's garage so they can redo their living room and put up new drywall without having the village interfere and tax them for it.  In my area you cannot put up new drywall or fix the pipes in your own bathroom without alerting the town and paying a permit fee.  It used to be that they would require permits and taxation if you were installing an additional bathroom or something like that but some code enforcement agents are taking it to the extreme lately.

Edited by Buzzetta
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OH I SEE, I don't have to know all 50 states tax rate.... except for buying as that is "what they will charge me the buyer". As the seller's tax rate will be properly displayed along with the BIN price....

Say Minnesota, that seller has their tax rate, if I want to purchase a $500 item... it will be $500 and will display the seller is from Minnesota and it's tax rate.

I'm in Texas, mine is 8.25% or 0.0825, so all I have to do is know Texas tax rate and charge it on top of my BIN or Best Offer with any buyer ie not just those in Texas...

When ebay invoice's their 10% for seller fee's, they'll also invoice me for sales tax...."my state (Texas) tax rate", and I pay ebay, who will in turn pay Texas the sales tax...

I think that I have this right now doh!

Is there still a threshold for "income tax" on ebay? was that ever a thing? lol or are you to pay income taxes no matter what?

I think that my "income" from ebay last year, before fee's, was under $500....of course I would be more concerned is I had to start charging sales tax, as my understanding of all this is that sales tax would make it more of a "reported" income requiring income tax on every sale....

As it stands now I've always thought of ebay as like a garage sale, if it was under a certain amount then no reporting was necessary. But sales tax changes that?

Edited by ADAMANTIUM
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I've always avoided buying from mycomicshop.com because of in state sales tax...

I would say this changes things...

BUT

Some states have cheaper sales tax than others, and if ANY of what I think is true (shrug) then people will buy from cheaper states more....

And what's to stop cheaper states from seeing all this potential income from other states and raising their cheap sales tax.... lol :ohnoez:

It's a madhouse I tells ya (:

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3 minutes ago, ADAMANTIUM said:

I've always avoided buying from mycomicshop.com because of in state sales tax...

I would say this changes things...

BUT

Some states have cheaper sales tax than others, and if ANY of what I think is true (shrug) then people will buy from cheaper states more....

And what's to stop cheaper states from seeing all this potential income from other states and raising their cheap sales tax.... lol :ohnoez:

It's a madhouse I tells ya (:

Sales tax works based on the buyer's residence...not the seller's. If I buy something outside of CA...unless I buy it for the purpose of reselling it...I am required, by law, to report that and pay MY state and local sales tax to CA.

And, believe it or not, there ARE states who don't want to raise their sales tax, regardless of the money boon(doggle) that other states have contrived.

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12 minutes ago, RockMyAmadeus said:

Sales tax works based on the buyer's residence...not the seller's. If I buy something outside of CA...unless I buy it for the purpose of reselling it...I am required, by law, to report that and pay MY state and local sales tax to CA.

And, believe it or not, there ARE states who don't want to raise their sales tax, regardless of the money boon(doggle) that other states have contrived.

Thanks! I am aware of some of CA tax rules, and this is what I originally thought so I wonder if ebay will somehow be able to make it automatic? I still think, as a seller, manually entering sales tax is ridonkulous..... I mean ??? 

Edited by ADAMANTIUM
I mean? Not--- I'm mean? lol
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