Sales tax . . . the problem has begun

[k-mansparts]

SCOTUS  has ruled 

the problems will be enormous 

[sharingtheland]

FVF's will be increased to cover the cost of eBay's overhead in handling the new tax ruling.

Oh yeah, fer sure, this ^^^

[livadia]

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@penguins_dont_fly wrote:

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@electrola_man wrote:

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@nowthatsjustducky wrote:

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@electrola_man wrote:

I sure hope it doesn't come down to every seller filing 50 Sales Tax returns instead of one.

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If you are going by state only, it would be less than 50.  Oregon has no sales tax (except on Cannabis; but even then, it is pretty cheap here and prices already take that tax into account, and that can't be sold via mail order due to the interstate commerce thing.)

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I just realized that it is more complicated, though.  Even within each state, various counties have extra tax.  Some cities have extra tax.  For example, if you set up at flea market in some cities, there is a city tax and county tax to keep track of in addition to the state tax.  I'm only beginning to see what a mess this is.  I hope something gets worked out here, and that there is a long phase-in time.

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It isn't just States, Cities and Counties, there are "District"  taxes in effect for a lot of places ....

Pensacola Beach FL:

Florida State Sales Tax 6%

Escambia County Sales Tax 1.5%

Santa Rosa Island Authority 2% (5% on alcohol)

Each of those is due to a separate tax authority. The SRIA is not a city tax, it covers all of Santa Rosa Island ... which has multiple cities/municipalities in 3 separate Counties (Escambia, Santa Rosa and Okaloosa), each with their own Sales Tax Rate.

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If eBay would get its act together like Etsy has done when dealing with sales made to WA/PA buyers, all the sales taxes that apply (state/local/etc) are just automatically calculated and tacked on to the invoice the buyer receives.   Buyer pays the invoice, seller has to do nothing.  Etsy deducts the tax portion from the seller's sale proceeds, remits it to the proper authorities on the seller's behalf, and sends the seller an accounting of who did what to whom so the seller has a record. 

[livadia]

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@penguins_dont_fly wrote:

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@livadia wrote:

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@fuestor0 wrote:

If eBay creates a system to collect it, or automatically have it applied across the board, without the seller having to report it, i am ok with that.I am not ok with having to do it all myself. 

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@fuestor0

That's the way Etsy does it.  (Buyer pays sales taxes on the purchase, Etsy collects and remits it to the respective collection authority. )  Seller does nothing/pays nothing/remits nothing. Works a treat.

Etsy started doing this back in January (I think) when some states' Internet Sales Tax laws went into effect.   No word yet from Etsy if the current practice will change but I don't know why it would.

eBay just ignored the whole thing, hoping it would go away, I guess. .  Will be interesting to see what they do now.

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Etsy just raised their fees from 3.5% (not including shipping) to 5% (including shipping) ... apparently to cover the costs of this (and their new promised advertising campaign) effective in July.

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@penguins_dont_fly, my comment about "No word yet from Etsy if the current practice will change but I don't know why it would" was referring to I doubted Etsy would make changes in the way they have been handling the collection/remittance of sales taxes due for WA/PA sales as the current system seems to work quite well.

And yes, Etsy did just announce a hike in their FVFs, though there was no mention in their announcement that had anything to do with the added burden of collecting/remitting sales taxes to those two states.   However, it just goes to reason taking on this task has had to cost them, which in my mind very likely did play some part in the need to raise their FVFs whether that's been publicly stated or not.

[sandyc3223]

Ebay sellers should get the same deal that Amazon does on shipping. They not only can provide free shipping but get a $125 kick back for each package. Since we keep paying higher and higher prices for shipping and now adding taxes this is another huge disavantage.  I'm afraid ebay will tell us to figure it in our cost same as shipping. They could lower fee's to help us stay competive and not lose sellers but doubtful.

[lakotak]

Etsy is already processing the sales tax on sales to customers in Pennsylvania and Washington State.

[goodluckselling]

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@vintagecraze50 wrote:

The internet sales tax thing was bound to happen as people shop more online than ever before and would not be surprised if internet sales far surpass brick and mortar sales in the years to come.

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Internet sales is only about 10% of all commerce as of last year.

Good Luck Selling!

[the*dog*ate*my*tablecloth]

The number of rates isn’t the most difficult problem. The problem is the arcane rules surrounding which items qualify for which rates. I browsed the amicus brief from Etsy to SCOTUS about their WA implementation and they referred to taxes on candy bars. I think it was snickers vs KitKats maybe? They have different tax rates because one contains flour.

i think the varying tax rates could be easily handled with a rate table by zip code. Weird rules will be much more difficult to automate.

[junkintrunkvintage]

Still onerous though.

[the*dog*ate*my*tablecloth]

It’s not my problem, it’s going to be EBay’s problem. They only have to set up the tax tables once and there are something like 15k rates. I bet some organization has already done the work and will sell an official tax table to anyone who needs it.

[goodluckselling]

I think when congress works on this we will see a lot of talk about aflat rate for all Internet purchases.  It is not going to be easy for them to create and pass a law that is fair to the entire nation.  Compromises will be made in order to do this and I believe one of the biggest ones will be a flat rate. 

I also think we might see language that talks about the collected tax (flat rate amount) be submitted to your own state versus each state from each user.  This would allow each state to create state laws that might give exclusions to different types of sellers albeit small, hobby, mom and pop, to classified one time sellers, etc.  Laws that might encourage startup small businesses who have employees, business to move to a specific state because of state laws as it relates to this subject.

Interestingly the ruling is about states collecting revenue for Internet commerce.  Collecting across state line is just one form of Internet commerce taxing and it seems daunting at a minimum to make it work so my suggestion of flat rate taxing and in state submissions seems on the surface to be an easier path to each state receiving revenue from Internet commerce. 

eBay would be wise to do this for its buyers and sellers and without extra cost to them.  In fact advertise it as a benefit to buying and selling on this marketplace. How are the millions of small business that have stand alone websites going to handle this?  They do not have a marketplace to do this for them and my guess is many will return here to take advantage of this as a feature eBay offers its users.

It has been suggested that the states will bring in between 12 Billion to 33 billion depending on the state. It we just average it out to 20 Billion per state in generated Internet taxes that equals one trillion dollars collected in total.

This is really big business!

Good Luck Selling!

[sandyc3223]

Before you give up selling wait to hear the specifics.

I'm guessing there will be exceptions. For example tax laws not applying to anyone

selling under $1000 a year.

[paulie_58]

Well my take on this is. Whatever applicable state law is in your state applies. You collect those sales taxes. They go into your bank account. Then you file by April and pay what you owe. Small sellers can usually only count on one hand what sales tax is collected for sales in the same state. 

Remember taxes are meant to discourage certain behaviors like property ownership and profit. Stay strong.

[paulie_58]

US law isnt applicable in other countries so there wont be a flat rate for all internet purchases. 

Especially (for example) when Chinese sellers wont be required pay said tax, pay less shipping, and cost less to run their business in general.  

It does nothing but hurt USA sellers. 

[the*dog*ate*my*tablecloth]

I use Shopifyfor my website and I expect they will be subject to the same rules as eBay and Etsy because they follow the facilitator guidelines.

most small sellers do not sell over 10k to any one state so they may be totally exempt if they build their own websites.

[payton544]

Thank you for the simple explanation, instead of the mass hysteria. My husband said the same thing yesterday, read the ruling.