eBay now charging sales tax to buyers!

#1

This was new to me, though since it’s being rolled out by state some of you may already be used to this. I live in Kentucky (Louisville) and I just was hit with 6% sales tax buying a $159 item. I thought it was just the seller charging it, so I paid and didn’t think much of it other than annoyance. I bought another $100+ item yesterday and again was charged tax when checking out. I ALMOST cancelled the order, but still bought it. Now after a quick google search I read that eBay is forcing sales tax on ALL STATES before the end of the year.

This will really hurt eBay sales for me. I only sell about 5-10 items a month, but now I don’t want to buy on eBay at all. I guess I’m going to have to figure out Facebook groups :slight_smile: though I really don’t want to!

#2

Not only hurt buyers but will make sellers go to alternative selling sites.

#3

My understanding is, any Selling Venue … eBay, Amazon, Etsy, etc, etc, are all following this Supreme Court ruling … Social Media groups and what not may be an alternative, I suppose, but I would tend to think Sellers go where the most potential customers go …

The “Sales Tax Free” Internet was a nice Golden Age that never could have lasted forever … :vulcan_salute:

#4

Maybe we see the usual inflated eBay prices come down, since one has to now calculate not only shipping costs but tax costs as well.

#5

I know this may sound a bit “out there” … however, I believe that with the continued escalation of shipping costs (I guess unless you’re Amazon or some other major on-line retailer that can cut their own deal) … along with the Sales Tax issue now, this current scenario may be the beginning of a re-birth of B&M …

Shipping costs, in particular, increase year in and year out … and it’s a compounding formula that, well, compounds on itself …

#6

Possibly or Grubhub expands beyond delivering food and starts picking up your weekly pulls from the comic shop to deliver for you… :slight_smile:

#7

I’ve been reading about this today since I was forced to learn about this law. Buyers from ALL states will have to deal with this soon, if you aren’t already.

I read on several Reddit threads that buyers are asking sellers to absorb the cost by lowering their selling prices.

I also dabble in vintage star wars on & off - and want to buy a Yak Face. I was ready to pull the trigger until I saw the sales tax on $350. Maybe we’ll get used to it, maybe not. It will really hurt those folks selling silver & gold on eBay.

For $10-20 comics, I don’t think it’s that big of a deal. But selling big ticket items is going to force folks to work off line - through forums, facebook groups, or face-to-face more.

#8

The already very competitive on-line arena generally leaves a fairly slim profit margin already … throw in Free Shipping, deduct the costs of selling on any actual Venue, possible returns, Cost of the Goods sold …

I don’t know just how much flex is left out there as far as absorbing the Sales Tax as well … :vulcan_salute:

#9

Anyone try switching to EBay UK to see if you still pay tax on a foreign website.

#10

Switching from E-Bay doesn’t guarantee avoiding the Sales Tax. As few as 200 transactions for many States will now force sellers to have to pay and the regulations vary from State to State so consider that when you’re trying to make a second transaction with a seller for a single cheap item. That one 50 cent add on comic may reduce the sellers chance to make sales to your State for someone who wanted $50 worth later in the year if they are getting near the threshold and not trying to go over and be forced to have to spend the next year dealing with your State and whatever other licenses and fee’s they force us to add on to stay legal, collect, file and pay. Many States are even trying to have it retroactively applied so the seller may end up responsible, even if they didn’t collect it for the first 199 sales.
https://www.salestaxinstitute.com/resources/economic-nexus-state-guide?utm_campaign=tips&utm_medium=May2019TipsDigest&utm_source=Infusionsoft

That list changes regularly as more States get laws passed or change their thresholds for qualification.

Sellers trying to dump large numbers of comics cheaply will also find they need to be careful and at least make sure E-bay or some other Nexus is handling that end for them.

As a consumer you can always try lobbying your States Representatives to have them do nothing or increase the limits so more small sellers stay under the thresholds but now that the snake is out of the bag I doubt it’ll ever get put back now.

There’s a whole lot of questions out there right now that have no direct answer or worse, 50 different answers from 50 different States. Here’s a few of the one’s off the top of my head.

If E-Bay is collecting it and you have 6 direct sales into those States outside of E-Bay, do you now have to file just those 6, all 206 or nothing because you had less than 200 outside of E-Bay?

Would E-Bay be willing to waive the last month or two of their one year contract fee’s if you need to shut down the last couple months of the year to avoid going over the limits for one or more States?

Can E-Bay come up with an option to block sales to some States you select if you’re in danger of going over the limits?

If the PayPal accounts showing an address in one State, the shipping destination is to another State and neither are the State you’re in who gets the credit for the transaction and paid the Sales Tax?

I’m already seeing setup fee’s for registering to pay some of the States the money they now say we HAVE to collect. How many more are going to be piled on and how long before each State starts wanting a separate business license and fee to go along with it?

Are you going to be able to handle audits from your home or will they have the power to force you to travel to their State for the audits?

#11

Seems like most states collecting sales taxes have thresholds of 100k or more for the most part. So the way I read it, if I was operating out of Texas and I sold to every state, I would have to reach the threshold in each state to file sales taxes. I wouldn’t be too worried though if I was a small business, if I were selling 100k to all states, that’s an easy 5 million in revenue… I’m sure I can afford a good accountant to handle all the sales tax stuff… :slight_smile:

As for eBay collecting sales tax, sounds like they’re already doing the work for you. I haven’t looked into it myself on how it’s handled through their web services.

#12

Got to read the fine print… some of those still have dollar amount thresholds with them. Seems some are $100K and 200 transactions. Paypal does this now for income on individuals. I can sell 1 item for $20,001.00 in a given year but since I didn’t go over the 200 transactions, they don’t report it via 1099 to the IRS, unless they’ve changed recently.

#13

Check the wording again. There’s a whole bunch that include the word

“OR”

with a transaction count. That’s the ones you have to watch out for as a smaller seller and I’ve seen a couple States come back and switch to the word “AND” or just remove the transaction count entirely. I’m thrilled California went back and removed the 200 transaction part because they not only want us to collect and file, we would have to collect and file different amounts for each district within the state and pay those individually the way the first wording came out.

Lobby your Representatives to take out the transactions or switch the wording to “AND” instead of “OR”.

Here’s the list of “OR” States which I haven’t updated in a few months so it may not be completely accurate even now.

Michigan – $100,000 OR 200 transactions – 10/1/2018
Minnesota – $100,000 OR 200 transactions – 10/1/2018
Nebraska – $100,000 OR 200 transactions – 1/1/2019
Nevada – $100,000 OR 200 transactions – 11/1/2018
New Jersey – $100,000 OR 200 transactions – 10/1/2018
North Carolina – $100,000 OR 200 transactions – 10/1/2018
North Dakota – $100,000 OR 200 transactions – 10/1/2018
Rhode Island – $100,000 OR 200 transactions – 7/31/2018
South Dakota – $100,000 OR 200 transactions – 5/1/2016
Utah – $100,000 OR 200 transactions – 1/1/2019
Vermont – $100,000 OR 200 transactions – 7/1/2018
Virginia - $100,000 OR 200 transactions - 7/1/2019
Washington – $100,000 OR 200 transactions – 10/1/2018
West Virginia – $100,000 OR 200 transactions – 1/1/2019
Wisconsin – $100,000 OR 200 transactions – 10/1/2018
Wyoming – $100,000 OR 200 transactions – 7/1/2017

California and New York were part of the “OR” list originally which almost had me wanting to close down online shipping entirely. New Jersey is my biggest concern right now since it’s a heavy order from State and I have to keep an eye on Florida closely to see what they finally decide and whether it’s going to be applied retroactively or not as the Gov is trying to push for.

#14

Yes, eBay and the other venues are pretty much doing the heavy lifting for Sellers as far as collection and payment of Sales Tax … there is a difference between Sales Tax and a 1099-K report … a big difference … personally, I’m not particularly worried about either …

I reported my On-Line income well before 1099-K became the rule … it’s just good Business …

#15

That’s why I said what I said… some are only “and” and not just “or”. Jebus Christ, must you nitpick everything?

Most of these thresholds cater to larger businesses, not small or individuals. I sell on eBay but I hardly ever hit the 200 transactions nor do I make 100k a year in total, let alone an individual state.

#16

The reason they count transactions is because if you’re selling more than a handful, you’re likely making a living off selling stuff.

But in the end, hire an accountant to make sure all your tax related stuff is accounted for.

#17

QuickBooks and Turbo Tax for Business and an hour or two a week, goes a long way … :vulcan_salute:

#18

That’s one of the reasons I’m moving more listings to E-Bay from other venues. At the same time though many States are not yet being handled by E-Bay so we need to be aware of which are and aren’t. Until they do it’s all on you. As you mentioned good accountants and software solutions are a must!!! You also need to make sure they’re updated to reflect the current regulations which are changing weekly it seems. 200 transactions may not even come out to $1000 in sales if you’re selling lots of cheap. That’s an average of less than 4 sales a week for some States. I’ve had nights were I’ve exceeded 4 sales to a single State. :dizzy_face:

#19

Here is another thing to think about. Which states have paper and paper types exempt from tax? Here in Massachusetts - comics, magazines and newspapers are exempt from sales tax. So even if they started enforcing that tax rule, would eBay know not to collect taxes on that type of exemption or would they just charge across the board?

#20

I would hope eBay is spending the money on good accountants to account for all laws. Well, we can all hope right?

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