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Sales tax nexus and eBay's Global Shipping Program
If I understand eBay's global shipping program properly, the global shipping program creates a sales tax nexus and forces the collection of sales taxes where such a nexus need not exist. Except for the few states that have no sales tax, collection of sales taxes from out-of-state sellers usually relies on one and/or two criteria - whether there is a physical presence of the seller in the state and/or whether a revenue threshold for the seller from the state has been exceeded. Very small businesses or solo entrepreneurs might not meet either criterion. This is also true for foreign sellers. State sales taxes are next to impossible for state tax authorities to levy on foreign sellers even with a tax treaty. They'd have to pursue small and mid-sized sellers in their home jurisdiction with little leverage at a high cost. it's just not worth it. But eBay's global shipping program, as I understand it, creates that business and economic nexus. Thus, eBay both facilitates and forces the collection of state sales taxes which might not otherwise be collected. To the extent that foreign sellers are strong-armed into the global shipping program in exchange for access to the US market, we Americans are all paying for that with sales taxes. I get the benefit to eBay in that helping collect taxes greases the skids so to speak with state politicians and the IRS. But I fail to see how forced tax collection, including situations where taxes need not have been collected in the first place, benefits members. Does anyone else have a problem with this?
house*of*paws
Mentor3 years agoHi @baldngrey
It is the state you are having the item shipped to that requires eBay … as well as other ‘Marketplace Facilitators’ … to collect tax.
[The US Supreme Court has already ruled on the constitutionality of the tax … which has nothing to do with how large the seller is OR where they are located OR the shipping program they use.]
baldngrey
OP3 years agoWith respect, I'd say you're both missing the point. I'm not challenging the constitutionality of the tax or the law. A direct transaction with small out-of-state sellers, especially foreign sellers, may not meet the thresholds necessary for that seller to be required to collect taxes on behalf of a state. To the extent that the global shipping program creates the nexus that requires eBay to collect those state taxes on behalf of the small sellers, buyers are charged a tax they would not otherwise pay. To the extent that eBay requires foreign sellers to use the global shipping program and not ship directly, the global shipping program forces a tax upon members that they would not otherwise pay. I asked foreign sellers with a direct web presence whether or not they had to collect US state sales taxes on direct sales. The answer was an unambiguous no. But eBay does collect those taxes. So the result of the process which eBay is using is the collection of a tax I would not pay were I to buy directly from some foreign sellers. I really don't care what the process is called or in what part of the process the tax is collected. If I buy through eBay, I pay a tax. If I buy direct, I don't. It's that simple.
shipscript
·3 years agoeBay is complying with state laws that were confirmed by the US Supreme court on June 21, 2018. For eBay, this is actually about complying with law, not about greasing palms or skids. You may recall that eBay fought this tax ruling. As the ruling states, eBay is the nexus (internet nexus now trumps physical presence) and is a marketplace facilitator (like all the other platforms that must follow the same rules).
While small sellers have been given concessions regarding the onerous reporting and collection requirements, buyers have never been exempt from sales tax on items purchased from out of state or out of country. Most states point to where, on the state income tax return, a person must declare the value of purchases where sales tax was not collected, but is still owed.
To pursue this course of action, the best place to start would be at your state legislative level. They are the ones who passed the laws.
baldngrey
OP3 years agoBut it’s exactly “small sellers†about whom I am speaking. Your framing makes it seems as if small sellers are an aberration. They’re not! Many/most of the items I purchase are from small sellers who were granted exemptions. They never had to collect tax in the first place. But the global shipping program does collect that tax now. Why should I agree to that let alone want eBay to abet that process?
Philosophically, I find the entire framing problematic. “Small sellers were granted an exemption†makes it seem as if the states have a natural right to expand taxes and take them from citizens and small sellers are “granted†an exemption as if they did not have a natural right to what they had earned by their own labor. That turns natural rights upside down.
Yes this is a matter for the Legislature but there is no reason why eBay should structure the shipping program to expand the nexus rather than limit it in the meantime. That is certainly within eBay’s control.
shipscript
·3 years agoThis is not within eBay's control. eBay is the nexus — the Marketplace Facilitator (has nothing to do with the shipping program). eBay can not decide that some small sellers are not actually being "facilitated" when selling on the platform.
baldngrey
OP3 years agoYou know shipscript you have a very interesting presence on eBay. Of 71 items listed, it looks like only 10 are actually for sale. I may have counted wrong but it's not many. The rest are marked "test", "not for sale" or "do not bid". That's pretty strange. And among the items that are for sale, most pictures don't match the listing if there are any pictures at all. It doesn't look, to my eyes anyway, that they are really intended to be sold. Hmmmmm.
If I were conspiratorially minded, which I am not as a rule, I'd say this looks like a false flag account to disguise eBay personnel participating in the forum as members. Maybe I have been watching too many spy movies lately. 😉
shipscript
·3 years ago@baldngrey
LOL, you've been watching too many movies lately. If you read my tagline, you will find that I've been helping sellers on the forums for 20 years and have developed a number of tools to fill some of the gaps in eBay's tools. It would truly be awesome if eBay would actually pay me, but no, I'm not an employee, I'm just a volunteer here in the community. And I run my own international electronics business of 45 years (what is left of it after all the market catastrophes), so don't really want to be anyone's "employee" or mouthpiece, or follow rules I don't like.
The Listings on this account are for test purposes. They help me keep my tools current. And I'll often put up a test listing when we need to test something here on the forums.
...Gotta go, power is failing here....
baldngrey
OP3 years agoThat's good to know. Seems odd to have all those tools and spend time, money and effort to develop more tools but not really have a lot of product to sell. Well, that's fine. Doesn't have to make sense to me. Good luck with it.