Charging Sales Tax for Clothes in a State where it is exempt NJ PA etc
If the purchase of all clothing and shoes are tax exempt inside New Jersey should Ebay be collecting state sales tax on those purchases? Should NJ buyers of clothing from sellers in NJ be exempt? should all buyers buying from sellers in NJ be exempt ? should no buyers buying from sellers in NJ be exempt? Thank you
One example of the many sales tax exemptions offered by states is an exemption for clothing. Eight states fully or partially exempt clothing in general. Clothing is fully exempt in Minnesota, New Jersey, Pennsylvania and Vermont. In three states, clothing up to a certain cap is exempt (in Massachusetts the cap is $175, in New York it’s $110, and in Rhode Island it’s $250). Connecticut will exempt clothing and footwear under $50 starting on June 1, 2015.
crogs571
·2 years agoI'm sorry, but if you can't properly charge sales tax regardless of category, you shouldn't charge it at all until you figure it out. Normal retail sites don't have this issue. Think I've encountered it once since it's been implemented across all my online shopping.
I've had a handful of issues on ebay and one just this morning. Got charged sales tax on a pair of shoes in men's clothing when my past two shoe purchases over the past week were not charged tax. In PA.
Then it's a half hour with chat trying to get it sorted. Has to go to their team and up to 60 days to get it resolved. Just not a pleasant buying experience overall.
This is not anywhere close to a new thing anymore, so it's fairly sad they can't get it right and shows they don't really give a crap to try and get it right. Fees go up, service continues to go down. As a buyer and a seller, ebay has become a strictly as needed site. I do 90% of my selling elsewhere. And I usually manage to find deals on what I want to buy elsewhere. I only turn to ebay when I have to at this point.
onefootflipper
·2 years agoIn many cases the individual state's tax laws make the tax on the internet purchases a different class of tax that doesn't have any of the exemptions they have in the sales tax from in-state purchases. It is often a "Use tax" and doesn't have any exceptions.
lvr-3929
·2 years agoFWIW, in New York while the state exempts $110 and below, individual counties apply a local sales tax. Say the county tax rate is 8%, on clothes you'd pay 4%.
monroe67
·2 years ago"If the purchase of all clothing and shoes are tax exempt inside New Jersey should Ebay be collecting state sales tax on those purchases? Should NJ buyers of clothing from sellers in NJ be exempt? should all buyers buying from sellers in NJ be exempt ? should no buyers buying from sellers in NJ be exempt? Thank you"
"Should NJ buyers of clothing from sellers in NJ be exempt?" Well -- on eBay or anywhere else, a NJ buyer of clothing from a NJ seller is not exempt from sales tax. The type of thing is exempt from sales tax, not the buyer. New Jersey has apparently decided its residents and citizens should wear clothes and, to encourage them to wear clothes, New Jersey does not apply sales taxes to the purchase of clothes.
The story behind this type of question here on the eBay Community Selling Board is that the item was listed
in an eBay category that is not specifically clothing.
You mention Minnesota. A couple years ago a Minnesota buyer complained bitterly here that he was charged sales tax on a shirt decorated with logos and words related to his favorite professional sports team. "It was a shirt !!" was his [paraphrased] argument. "Shirts are not taxed in Minnesota !! eBay is breaking Minnesota's tax laws !!"
A closer look at the eBay listing showed that the seller did not list that shirt in a Clothing (Apparel) category. Instead, the seller listed that shirt in a Sports Memorabilia category. Kind of like a game program or poster or pennant. Thus: sales tax was applied.
The solution for eBay buyers is to be aware of the eBay listing's category. If you really don't want the state of New Jersey to get a dollar or two when you buy clothing on eBay, be sure the clothing you buy is listed in a Clothing category.
soh.maryl
·2 years agoShould NJ buyers of clothing from NJ sellers of clothing be exempt?
The answer would be "yes" because that buyer's delivery address would be NJ.
And, of course, that item of clothing would have to have been listed under "Clothing", not "Sports
Memorabilia" .
Should ALL buyers of clothing from sellers in NJ be exempt? No. They would only be exempt if their state also did not have a sales tax on clothing.
house*of*paws
·2 years agoHi @partsman836
I don’t know whether the laws governing in-state purchases of clothing is the same as online purchases for all states.
eBay collects sales tax according to the Marketplace Facilitator Laws of the state the item is being shipped to.
If eBay is making a tax error regarding an individual state … then it needs to be told by an official from that state. [eBay will refund incorrectly collected tax.]
redmodelt
·2 years agoCould also come down to what category the item is listed in. Often there are posts esp ones dealing with coins or gold/silver bars where the wrong category was used, and sales tax was charge where it might not have been if the correct category was used.
The question would be: are those caps annual or per sale? If annual, how would they track them?
How eBay charges sales tax would also depend on what information each state gave eBay.
Did you receive a message asking why sales tax was charged?
If so, maybe post the eBay number of the item and someone might be able to see what was going on.
nobody*s_perfect
·2 years agoSales tax is based on the buyer's location. The seller's location doesn't matter.
As noted in one of the other posts, eBay bases their collections on the item's category; they can't possibly determine the status of every separate listing. So if you list a clothing item in a clothing category then your buyer in NJ won't pay sales tax. But if you list it under Sports or Collectibles, then eBay will ask your buyer to pay sales tax on that item.
luckythewinner
·2 years agoSales tax is determined by where the item is being shipped, not by where the seller is located.
partsman836
OP2 years agoAre you saying that buyers in NJ (PA etc) do not pay sales tax on all clothing and shoes purchases on Ebay?
kensgiftshop
·2 years agoIf buyer lives in a state that doesn't tax those items, they shouldn't pay sales tax.
It also depends on the category the item is listed under.
luckythewinner
·2 years agoI did not mean to suggest anything about what eBay actually does.
I was simply explaining in general how sales tax works.
partsman836
OP2 years agoI do appreciate your help and not trying to be a jerk and put words into your mouth. I'm trying to find out who Ebay charges and or exempts from sales tax. There are currently four states (NJ PA MN VT) that do not charge sales tax for the purchase of all clothing.
What I am hearing is that most often (as long as the seller chose the proper category) ebay DOES NOT charge sales tax on clothing purchases for ALL residents of NJ PA MN & VT.
is that correct? and thank you all very much
nobody*s_perfect
·2 years agoYes
monica-sells
·2 years agohighlighted for reference
...Yes
(a football jersey, for example, is clothing, but it would most likely be in a taxable category)
soh.maryl
·2 years agoAnd it should be noted that there are also several states that do not charge state sales tax on anything, like Delaware and Oregon, for instance. That's why a lot of freight forwarders are located in those states because international buyers using those freight forwarders do not pay any state sales tax on their purchases.
fleepsko
·2 years agoLast April I purchased a hat on eBay. Both myself & the seller reside in Pa. I called eBay to get a refund. This also happened two prior times and I was refunded. I was told it could take up to 60 days and waited until July ad heard nothing. I then used chat and the rep said he would mark it priority buy again I was told it could take up to 60 days for a refund. It's been around six months and nothing. It's obvious eBay doesn't care and they just give you the run around and hope you'll forget about it. The amount is a little over a dollar and I've been waiting 10 months. From what I'm reading this could be a class action suit waiting to happen as it seems everyone that lives in Pa. that buys clothing is illegally being charged sales tax.
theteamsetguy
·2 years ago@partsman836 ,
Just curious eBay does all of the collection and remittance to the proper taxing authorities it shouldn't matter who is exempt or not. As a seller you have no responsibility to collect and remit the taxes so I could care less.
selsa84
·2 years agoInteresting, I was just charged 7 % sales tax on a purchase and I am in Georgia( which is 4%) and Tennessee(where the sellers is at is 7 %).
lacemaker3
·2 years ago@selsa84,
According to the location on your listings, you are in Monroe, Georgia. The minimum combined state and local tax rate there is 7%.
slippinjimmy
·2 years agoHow is it even possible that a person (eBay seller or not) doesn't know what the Sales Tax rate is where they live? My mind is boggled and I do wonder what other obvious things such persons do not know.
lacemaker3
·2 years agoWhy would anyone *NEED* to know the percentage sales tax rate they pay for in-person purchases locally? You just pay what the cashier asks for, or at self-checkout you stick your card in the machine and it charges what it charges to your account. Or you insert bills (and/or coins) until the self-checkout is satisfied.
With that said ... yes, I do know what percentage I am charged locally, and how much I would pay at stores in other cities and counties, adjacent to my own location.
Maybe the person was not aware that eBay also collects the local, county, city and municipality taxes as well as the state taxes.
A lot of people on here are not aware that, even though there is no state sales tax in Alaska, municipalities there are allowed to charge sales tax, and eBay does collect the sales tax for those cities and municipalities in Alaska that do charge sales tax.
selsa84
·2 years agoI don't live here. I live in Az.
selsa84
·2 years agoYep. You're correct
mtgraves7984
·2 years ago@selsa84
In Tennessee, our state sales tax is 7% and each county adds another percentage. My county adds 2 1/4%, so 9 1/4% for me.