eBay Sales Tax

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As of 7/1 this year, eBay has started collecting sales tax on purchases in my state and a handful of others. I believe WA and CA state buyers have already been dealing with this for some time.

Admittedly, there's no point in resisting because the taxman always wins, but it makes no sense that I should be paying for sales tax on certain items like small collectibles and such.

For example, I occasionally like to find outdated banknotes from other countries to purchase, and the sellers are usually INDIVIDUALS. Seems to be a person-to-person transaction...

Oh well.. I guess I'm just complaining.
frown.gif
 
been having this for a while in Wa. palmetto shared my purchase of a parts kit in 2018 and the state came looking for its cut also. i kinda don't really care now as amazon and most others tack on the tax these day. i just look at the total price and decide from there
 
In WA, anything sold through ebay, regardless of what country it comes from, gets WA sales tax added on to the sale. If you pay by PayPal a separate transation goes directly to the WA state's sale tax PayPal account.

At some point all states will be doing this. When did a state not take advantage of collecting tax money? They always get more money hungry with time.
 
I worked on a bunch of retail and ecommerce sites that used external "sales and use" tax. Much of my info is a bit out of date, but sales and use tax in the USA is a shambles of different, contradictory and hard to understand laws. Most bigger users do not even bother to maintain their own sales tax software- rather they buy a tax package (Vertex and Taxware are the big players) and do the call-out to the tax engine with line items, location etc., and let them figure it out. Updates happen a minimum of every 30 days, sometimes more frequently if a jurisdiction has a urgent update. Unlike payroll withholding which gets fixed or averaged out over the year, companies might get penalized by underreporting and underpaying sales tax. This is one area where I sympathize with retailers because managing sales tax collection is a headache, a burden and costly.
 
I've started buying on eBay more because of no sales tax. Eventually, I'll get a credit card through my LLC in Montana and be free of online sales tax.
 
Originally Posted by Gasbuggy
I've started buying on eBay more because of no sales tax. Eventually, I'll get a credit card through my LLC in Montana and be free of online sales tax.


Are you going to go there to pick it up?
Don't they charge based on where you SHIP TO?
 
... Hate to sound like the eternal pessimist but, I wonder how much of the collected sales tax actually goes to the States that require it to be collected. Seems like an accounting nightmare.

Yes, I know... I can make Murphy look like an optimist...

Ray
 
Originally Posted by RayCJ

... Hate to sound like the eternal pessimist but, I wonder how much of the collected sales tax actually goes to the States that require it to be collected. Seems like an accounting nightmare.

Yes, I know... I can make Murphy look like an optimist...

Ray

I would say all that is legally required since they are subject to audit. They may allow a small administrative cut to offset the collection.
 
Taxed to death......States have changed their laws in order to legally collect taxes. The rules always change! I digress......
 
Originally Posted by Gasbuggy
I've started buying on eBay more because of no sales tax. Eventually, I'll get a credit card through my LLC in Montana and be free of online sales tax.


Montana ... that rings some bells ... Is this state supposed to be a sales tax haven?

A number of years ago, I recall looking at some use tax cases, and I'm thinking Montana came up as the state where people were registered big ticket items ( I think it was RV's or airplanes ) to avoid the use tax in their legitimate state of residence.

It didn't work out well for the folks trying to avoid the tax.
 
Originally Posted by RayCJ

... Hate to sound like the eternal pessimist but, I wonder how much of the collected sales tax actually goes to the States that require it to be collected. Seems like an accounting nightmare.

Yes, I know... I can make Murphy look like an optimist...

Ray


In my state, when I retail goods, I get to retain 2% of the tax take, IF I make a timely remittance of the tax, to compensate for the trouble of doing the state's work.

All of it, less what the state allows as a collection fee, must go to the state. If there is a deficiency, somebody will have to pay it to the state. Ultimately, that liability is on the retailer, although they may have an indemnity contract with the company doing the nuts and bolts of the transaction.
 
Originally Posted by Reddy45
As of 7/1 this year, eBay has started collecting sales tax on purchases in my state and a handful of others. ...


AR as well, if it makes you feel any better ...
 
Originally Posted by Char Baby
I have noticed since ~2006, that more & more websites are changing your state sales tax for online orders.


Generally, the rule of thumb is, if there is a physical presence or you have an employee that lives in a particular state, you will have to collect sales tax in that state.

Some states will require it regardless.

We hired remote employees in a few states and had to start collecting sales tax in that state almost immediately after.
 
Originally Posted by rubberchicken
I worked on a bunch of retail and ecommerce sites that used external "sales and use" tax. Much of my info is a bit out of date, but sales and use tax in the USA is a shambles of different, contradictory and hard to understand laws. Most bigger users do not even bother to maintain their own sales tax software- rather they buy a tax package (Vertex and Taxware are the big players) and do the call-out to the tax engine with line items, location etc., and let them figure it out. Updates happen a minimum of every 30 days, sometimes more frequently if a jurisdiction has a urgent update. Unlike payroll withholding which gets fixed or averaged out over the year, companies might get penalized by underreporting and underpaying sales tax. This is one area where I sympathize with retailers because managing sales tax collection is a headache, a burden and costly.


I can't remember name of startup but they built the backend service to handle the tax collection, payments, amounts for companies and states down to city level. The company value exploded when internet sales tax went thru. If you own an ecommerce site happy integrating that service. Rolling your own is possible however you likely need a paid service to subscribe to for live updates of what rates are.
 
Nearly all states have a use tax. At tax time all law abiding citizens are supposed to count up all the on-line, out of state purchases they made and list that on their tax forms.

Everybody is doing that, correct? LOL

https://www.investopedia.com/terms/u/use-tax.asp

"Retailers are usually not required to collect sales tax * on purchases made by consumers in states where the retailer does not have a physical presence (called "nexus") such as a sales office, warehouse or sales representative, so the onus falls on the consumer to calculate and remit the tax to his or her state government."

* - this is changing, as we speak
 
Last edited:
Originally Posted by doitmyself
Nearly all states have a use tax. At tax time all law abiding citizens are supposed to count up all the on-line, out of state purchases they made and list that on their tax forms.

Everybody is doing that, correct? LOL

https://www.investopedia.com/terms/u/use-tax.asp

"Retailers are usually not required to collect sales tax * on purchases made by consumers in states where the retailer does not have a physical presence (called "nexus") such as a sales office, warehouse or sales representative, so the onus falls on the consumer to calculate and remit the tax to his or her state government."

* - this is changing, as we speak


Indeed.
 
Originally Posted by rubberchicken
I worked on a bunch of retail and ecommerce sites that used external "sales and use" tax. Much of my info is a bit out of date, but sales and use tax in the USA is a shambles of different, contradictory and hard to understand laws. Most bigger users do not even bother to maintain their own sales tax software- rather they buy a tax package (Vertex and Taxware are the big players) and do the call-out to the tax engine with line items, location etc., and let them figure it out. Updates happen a minimum of every 30 days, sometimes more frequently if a jurisdiction has a urgent update. Unlike payroll withholding which gets fixed or averaged out over the year, companies might get penalized by underreporting and underpaying sales tax. This is one area where I sympathize with retailers because managing sales tax collection is a headache, a burden and costly.


For a short time I handled sales tax for my wife's company and it was a huge PITA with all the different counties just in my own state. The worst having to line item the tax out for each county because some counties had an additional line item for things such as public transportation or schools, or whatever. UGH.
 
Last edited:
Originally Posted by rubberchicken
I worked on a bunch of retail and ecommerce sites that used external "sales and use" tax. Much of my info is a bit out of date, but sales and use tax in the USA is a shambles of different, contradictory and hard to understand laws. Most bigger users do not even bother to maintain their own sales tax software- rather they buy a tax package (Vertex and Taxware are the big players) and do the call-out to the tax engine with line items, location etc., and let them figure it out. Updates happen a minimum of every 30 days, sometimes more frequently if a jurisdiction has a urgent update. Unlike payroll withholding which gets fixed or averaged out over the year, companies might get penalized by underreporting and underpaying sales tax. This is one area where I sympathize with retailers because managing sales tax collection is a headache, a burden and costly.



Had to deal with a lot of sales tax issues in my previous position. It seemed to really rear it's ugly head when we were dealing with cities that had different municipal tax codes for different zip codes, or even "tax free" zones inside of certain zip codes. Of course, we would end up with the wrong zip code recorded for a customer which would lead to tax being collected wrong.

Or situations where one CDP or Village is in two different towns and counties. Those were always fun ones to try to resolve. Time to bring up google maps and figure out exactly where the customer is and exactly what the tax should be!
 
SD passed that law last year I believe. Even paying tax on my summit racing orders..... bummer!
 
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