state sales tax

[wyanwal]

Hi All,  I have just returned to selling on Ebay after a 15 year absence.  I did not stop making purchases just selling.  

I am confused about the charge of sales tax on my sales.  I live in Pennsylvania and do not pay sales tax on items I purchase through Ebay. But the items I have recently sold on Ebay have a sales tax charge for the buyer.

Do I, as a seller, have an option not to charge sales tax to the buyer?  If so, I have not been able to locate where to change this setting.

Thank you for any help.

Ben  

[fern*wood]

Sales tax is collected from the buyer based on where they live.  It is required and handled by ebay in most states.

[cool.jewels.by.jeff]

I live in Pa. and most definitely pay sales tax on every purchase made.

[dhbookds · Accepted solution]

I think you have reseller license in PA.........which exempts you from paying sales tax on the items you buy for resell.  However, you are still required to collect and remit tax WHEN you SELL those items.

However, on marketplaces like Ebay/Amazon, etc.......individual states now require that those marketplaces collect and remit sales tax to the buyer's state when items are sold.  Sellers have to do nothing to set up the tax, Ebay sets it up and remits it.    A couple of states have no sales tax...so on those sales, nothing is collected. 

[luckythewinner]

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@wyanwal wrote:

Do I, as a seller, have an option not to charge sales tax to the buyer?  If so, I have not been able to locate where to change this setting.

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If sales tax was optional, no one would pay sales tax 🙂

[monroe67]

"I have just returned to selling on Ebay after a 15 year absence."

I'm sure you'll find quite a number of things have changed in 15 years.  

Way back in June of 2018, only about 5.5 years ago, the Supreme Court decision in South Dakota v Wayfair, Inc., allowed states to start collecting sales taxes on sales transactions that were done "outside" the geographical/physical boundaries of the states, via online platforms.  Like Wayfair, Amazon, eBay, Etsy, and thousands (millions?) of other sites. 
The zip code in the delivery addresses of these purchases is what is used to determine the sales tax percentages.  

[thelongball]

Make sure to read the income tax laws also. If you missed the sales tax laws, I'm Hoping you read about   those changes also. 

[albertabrightalberta]

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@wyanwal wrote:

Do I, as a seller, have an option not to charge sales tax to the buyer? 

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No, you can't help your buyers evade the sales taxes they owe to their states. 

[krazzykats]

You will also pay eBay FV value fees on the sales tax. 

I'm in Oregon, and buyers are charged sales tax based on where they live, not where I am located.

[dbfolks166mt]

     If it's been 15 years as others mentioned a LOT has changed. If you were not setup in Managed Payments the last time you sold you will need to get that established. While you can still pay for things using PayPal they are no longer the financial processor for eBay. Adyen has taken over that role. 

https://www.ebay.com/help/selling/getting-paid/start-getting-paid-ebay?id=4795 

     Others already covered the sales tax pretty much and I believe all 45 states that have sales tax have now implemented ecommerce sales tax laws. Missouri was, I believe the last to do so, and that took effect on 1 January 2023. 

     EBay also now applies FVF's to the total amount of the purchase ((item price, shipping, sales tax) + $.30). Also the Federal, an in some cases state, 1099 issuance/reporting thresholds have changed and will, as best we currently know, take effect for the 2023 tax year. If the total gross transactions exceed $600 in 2023 you will receive a 1099 from eBay. This is not eBay unique so anyone using other third party processors for other financial processing like PayPal, Venmo, Google Pay......... will also receive 1099''s from those financial processors. 

https://www.ebay.com/help/selling/fees-credits-invoices/ebay-form-1099k?id=4794 

     EBay has established a new international processing/shipping program called EIS that replaced all previous services like the Global Shipping Program. The program has some GREAT seller protections but it also has some limitations.

https://www.ebay.com/help/selling/shipping-items/setting-shipping-options/ebay-international-shippin... 

     There are a number of other changes like Promoted Listings, autopay for OBO and auctions......... 

[soh.maryl]

Since the state sales tax is based on the delivery address of the buyer, perhaps those buyers have their purchases delivered to states that actually do have a state sales tax.  

[soh.maryl]

Awhile back, I believe PA had no state sales tax on clothing?

So now that's been changed by the State of Pennsylvania?

[wyanwal]

Thank you for offering your insight to my dilemma.  I think you are correct that I have my account setup as a reseller.  I had forgotten that I had done that years ago (probably 20+ years ago).   

[wyanwal]

Thanks to everyone for your input.  This forum worked just as I had hoped and I will continue to use the forum in the future.

thank you

[dbfolks166mt]

Awhile back, I believe PA had no state sales tax on clothing?

So now that's been changed by the State of Pennsylvania?

     This is one of the major problems with ecommerce sales tax collection. There are over 10,000 separate sales tax laws that cover things like county, city, parish and other additions to the state sales tax rates, Items that are tax exempt or have a lower sales tax rate, things that have no sales tax on certain state sales tax exempt days......................... 

     I would imagine eBay is constantly making changes and adjustments to the software, or downloading COTS software to adjust/adapt to those changes.