Sales tax

[larrymajordev]

Is anyone else shocked by the sudden collection of sales taxes on purchases now from any state? Is this someone’s idea of a tax cut?

[dburtis2]

First, I agree that sales tax is here to stay, and it will continue to increase over the years (and eBay is not the culprit here).

My concern is that the "invoice for yourself" from eBay does not show the sales tax they collect on behalf of the states (fortunately, PayPal does show the sales tax collected by eBay).  When I sell something to a buyer in my state (NM), I am required to report (and pay) the sales tax for the City, County, and NM state.  eBay only collects the "state" tax, so they buyer has underpaid by the difference between the sales tax I have to pay the state, and the sales tax collected by eBay.

Furthermore, if eBay does ever stop using PayPal, I won't know how much tax is collected by them (not to mention the 2.9% on that tax collected for processing fee).  eBay needs to understand the sales tax issue for sellers, especially for "in-state" sales.  They apparently do not understand the seller's requirements to report sales to their own state.  Not all of us have avoided reporting sales to our states in the past, and certainly in the future.

Don Burtis (dburtis2)

[eldavies]

It's quite clear in my state of Hawaii that you must be a BUSINESS to pay excise tax and that what is called "casual sales" are NOT SUBJECT TO TAX. 

Yet eBay is collecting tax from individual person to person sales of small used items. I believe this is illegal. 

§237-2 “Business”, “engaging” in business, defined. As used in this chapter:
“Business” includes all activities (personal, professional, or corporate) engaged in or caused to be engaged in withthe object of gain or economic benefit either direct or indirect, but does not include casual sales

http://files.hawaii.gov/tax/legal/hrs/hrs_237.pdf

[bonjourami]

Do you even understand the Marketplace Facilitator laws? Google is your friend.

A measure moving through the Hawaii State Capitol would require businesses that don't have a physical presence in the islands, but do more than $100,000 in sales to collect the GE tax. 

Lawmakers are targeting online retailers which do an estimated $375 million worth of business in Hawaii every year as a way to generate more tax revenue.

"The state is in desperate need of revenue to provide services resident rely on," said Sen. Donovan Dela Cruz.

Charging tax would also put on-line businesses under the same requirements as Hawaii's stores and shops.

[nobody*s_perfect]

eBay is a marketplace facilitator and is required to collect sales tax on items sent to Hawaii.

https://www.capitol.hawaii.gov/session2019/bills/HB113_.HTM

https://community.ebay.com/t5/Announcements/UPDATE-Ongoing-Changes-in-How-Internet-Sales-Tax-May-Imp...

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

[soh.maryl]

I believe you might've absorbed some misinformation about the state sales tax that eBay is now required to collect for 39 states.

This tax is collected from the buyer by eBay and is based on the shipping address of that buyer.  Why would a seller need to "mark up their item 10% to cover their taxes"?  The seller does not pay the state sales tax, the buyer does. 

And just in case you missed this point:  This is now a law in 39 states and will be enforced by other online marketplace facilitators, not just eBay.

So wherever you migrate to, best of luck. 

[jkch425]

I am shocked by the fact that when eBay charges sales tax to the buyer, they run the money through the sellers PayPal and the seller now has to pay PayPal fees on those sales tax

[sunnysouth1]

PayPal charges a fee on the total amount they collect from the buyer.

PayPal is a payment processing service so they will charge a fee on all monies collected.

[29786]

This is a deal killer for me, I will be buying very little on ebay any more...

[29786]

This is the end of internet sales...

[29786]

I agree...

[fjrman1]

Doubt this will be the end of internet sales but for sites like eBay buyers will be taking into account the total cost for a purchase and if it makes sense to purchase on eBay or to buy elsewhere-such as a local store.

[1944agv]

Sales tax + shipping cost = Less buyers on Ebay now.

[mansons2005]

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@fjrman1 wrote:

Doubt this will be the end of internet sales but for sites like eBay buyers will be taking into account the total cost for a purchase and if it makes sense to purchase on eBay or to buy elsewhere-such as a local store.

---

According to this theory, the advent of sales tax will "suddenly" make buyers consider the "total cost" of a purchase - somehow implying that until this newly enacted practice buyers just ran willy-nilly through eBay smashing the Buy It Now button, with no thought given to the cost of the purchase.

Actually, there a any number of reasons, many not directly connected to cost, that go into a buyer's decision to make a purchase - and while the added collection of taxes will undoubtedly become one of those considerations, I find it difficult to believe that is will have any long term affect of e-commerce.  I pay sales tax on every purchase I make - and knowing that I will has always been part of my decision to make ANY purchase, including a gallon jug of milk.

[bonjourami]

Everything in life goes up, it is what it is. And certainly paying a few dollars in taxes wont stop me from the convenience and selection of shopping online.

[econspiracydesign]

If ebay is calculating and adding on the tax amount, collecting it for the state, and paying it to the state, why on earth should it be going through MY paypal account first?  ebay should have its own paypal account to route the taxes through.  the big winner in this new tax collection scheme is Paypal, who now get to scalp an extra fee off the top of every transaction.  Ebay of course dodges paying the paypal fees by forcing the seller to pay them instead even though they took the money from the buyer and sent it to the state.   it sounds like it should be illegal but of course the law is written for corporations.

Finding new ways to extract profits from and pass costs onto the sellers has always been ebay's core business for as long as i have been on the platform.  Death by a thousand cuts...

And correct me if i am wrong, but it appears the only things our government accomplished in the last few years was implementing this internet sales tax, and massive tax cuts for the 1%.  With all the political drama going on you would think our political system was ineffective, but here you can see it is actually functioning exactly as intended.