Sales Tx
I know that Ebay calculates sales tax due for sales made but are the funds collected by Ebay disbursed to the seller so that the seller can pay the sales tax that may apply to a sale in their state?
13 comments
I know that Ebay calculates sales tax due for sales made but are the funds collected by Ebay disbursed to the seller so that the seller can pay the sales tax that may apply to a sale in their state?
dbfolks166mt
·2 years agoNo, and I am grateful for that. If they were disbursed to the seller it wouldn't be just your state that your would have to worry about keeping track of but all 45 states that have ecommerce sales tax laws in place.
kalyoth
·2 years agoJust a followup - the sales tax collected only satisfies the buyers tax obligations. The seller still faces potential income tax liability - that would be determined & resolved via income taxes filed in 2025.
monroe67
·2 years ago"I know that Ebay calculates sales tax due for sales made . . ."
Yes, that's correct.
". . .but are the funds collected by Ebay disbursed to the seller so that the seller can pay the sales tax that may apply to a sale in their state?"
No, the sales tax funds are not disbursed to the seller.
Sales taxes are calculated at the rate in effect at the zip code of the item's delivery address. The buyer pays those sales taxes and eBay collects them. The sales tax funds are then paid by eBay to the state treasury of the states where the items are delivered.
The reason is that, because eBay is a Marketplace Facilitator, eBay has the responsibility to calculate, collect, and send sales tax money to the states where the items are delivered. It is eBay's job to make sure the sales taxes are calculated properly and that the funds go to the state of the buyer's/delivery address
Even if you, as an eBay seller, happen to sell something to a buyer who lives in the same state as you, eBay will calculate the sales tax at the buyer's zip code, eBay will collect those sales taxes, and eBay will send those sales taxes to your buyer's state treasury, which in that case happens to be the same state as yours.
Simply phrased, as an eBay seller you don't have to do anything concerning sales taxes.
kensgiftshop
·2 years agoThe sales tax they collect is for the buyers state, not where the seller is.
Ebay handles all the sales tax, so you don't have to worry about it.
kalyoth
·2 years agoThe seller never takes possession. They are collected & disbursed based upon agreement & legal practice for each authority they are collected for. As such, you have no liability for the taxes collected nor responsibility to report it.
toysaver
·2 years agoYou don't have to do anything. It's not just your state, it's based on the buyer's location. EBay collects the sales tax for every state that has sales tax and remits it. If you purchase an article from me in WI you'll pay sales tax to your state, not mine.
wastingtime101
·2 years agoNot necessarily accurate. Some sellers need to fill out a form saying eBay collected and remitted the sales tax for sales in their state. Those sellers may need the Marketplace Facilitator Certificate for their state that eBay posted on this page: https://www.ebay.com/help/selling/fees-credits-invoices/taxes-import-charges?id=4121#section3
Sellers should consult their accountant to determine whether or not they need to fill out the appropriate forms each year.
luckythewinner
·2 years agoSales tax is based on the Buyer's location and is collected by eBay and paid directly to the buyer's state.
This is due to all virtually states passing a "Marketplace Facilitator" law in the wake of the SOUTH DAKOTA v. WAYFAIR, INC ruling by the Supreme Court in 2018.
Here is a site that explains those laws.
https://www.taxjar.com/sales-tax/2020-10-marketplace-facilitator
caldreamer
·2 years agoNo, EBAY distributes the sales tax to the various states.
rosszonebricks
·2 years agoIn addition to the above, any sales tax collected by eBay is also NOT included on the 1099k form you may receive, so is not even a line item you need to adjust for on your income taxes.
wastingtime101
·2 years agoeBay remits the funds direct to the buyer's state.
Edit to correct typo.
monroe67
·2 years ago"eBay remits the funds direct to the seller's state." False.
eBay remits sales tax funds direct[ly] to the buyer's state -- generally.
eBay calculates sales taxes based on the USA zip code to which the item will be delivered.
eBay remits the sales tax funds to the state to which the item was delivered.
Generally, of course, this means that the sales tax funds go to the buyer's state because, again, generally, the items are delivered to buyers' homes or offices.
However, that's not always the case. I, in California, might occasionally purchase items to be sent to friends or family in the states of Washington or Missouri or Iowa. My local California sales tax rate is just below 8%, but my home town in Iowa has a sales tax rate of around 6%. If I buy something and have it sent to my Iowa cousin, I would pay that 6% sales tax rate, and Des Moines would get the funds, as they should.
kensgiftshop
·2 years agoYou mean buyers state.