mam98031 • Volunteer Community Member • Buyer/Seller since 1999
@gporpc wrote:I live in a no sales tax state, Oregon items are sold from here and shipped from here. I must have missed the eMail but it seems since November eBay has been charging sales tax to buyers. I guess its on the up and up. Conversely when I but from a seller in a sales tax state I am rightfully not charged sales tax...
Sales tax has NEVER been based on the origination of the product sold.
I think it is easier to wrap you head around this if we actually call this USE tax. Which is what it is. See if this helps.
What Is Use Tax?
Use tax is a sales tax on purchases made outside one's state of residence for taxable items that will be used, stored or consumed in one's state of residence and on which no tax was collected in the state of purchase. If the purchase would have been taxed if it was made in the purchaser’s state of residence, then use tax is due.
@gporpc wrote:RE:
Sales tax has NEVER been based on the origination of the product sold.
It did until last year, I had never had buyers charged sales tax in nearly 20 years of selling on Ebay
No it didn't. You just happen to be in one of the few states that have Income tax and no sales tax.
Use Tax laws have been in place in states with sales tax for many years. They just didn't have a way to enforce it until the Supreme Court overturn the Wayfair case. So we were technically suppose to be doing this all along, but there just wasn't a way for the states to do this until now. The laws started changing in 2018 when the courts overturned Wayfair. That is why you are seeing what you are seeing happening.
Now still states, even with the overturn of Wayfair / Quill, had an issue on how to collect these taxes from internet sellers on sites like this one. A great number of the sellers would be under their minimum threshold and therefore would not be collecting and remitting taxes to the various states.
So some brilliant person came up with a MarketPlace Facilitator Law [MFL]. This type of law no longer considers the individual sellers that make up any given marketplace site like Ebay, Amazon, Etsy, etc. But instead considers them all collectively under the Marketplace. So it is the sales of the Marketplace as a whole that is consider. Which is why even the smallest of sellers will see any of their customers that are located in any of the 38 states that currently have a MFL will be charged sales tax.
@gporpc wrote:So is it new that the Paypal payment shows what the buyer paid including sales tax and just the amount paid is showing as a PP deposit?
This has only been since November of 2019 as I recall
Yes it is new change, as you stated. Ebay sent out emails to everyone and put it on the announcement board as well. So for those that check their emails and actually read the ones that come from Ebay, they weren't surprised.
I don't like having to pay the PP fee on the sales tax better than anyone one else does. But this isn't going to change no matter how much we complain about it. Ebay isn't going to go back to how they were processing the sales tax before. They had too many complaints from confused buyers and funding institutions over all the little charges. They were separate transactions from whatever was being purchased on Ebay because it wasn't being ran through PP. So there were so many tiny little charges that buyers didn't understand and financial institutions didn't like.
