Illegally getting charge a sales tax for non-business seller.

[rexdroid]

My state requires that a business collect sales tax and an individual pay a use tax if a business does not charge a sales tax. Which will only show up on onsite merchants websites when buying from an out of state merchant that does less then $15k a year of sales in to Minnesota. My state exempts sellers from collecting a sales tax if they are not a business and the online equivalent of a garage sale. Individuals buying from someone that is not a business do not pay the sales tax. Minnesota Statutes, section 297A.67, subdivision 23, exempts isolated and occasional sales of tangible personal property or a service made by a person who is not engaged in selling such property or service in the normal course of business from the sales or use tax. Despite this eBay has been illegally collecting sales tax for these kinds of transactions.

[rexdroid]

eBay is a marketplace facilitator in many states, which means that eBay is required to collect and remit sales tax on behalf of its sellers for all sales that are shipped to those states. However, this requirement does not apply to isolated or occasional sales made by persons who are not engaged in selling such property or service in the normal course of business. So I am illegally getting charged sales tax in my state. I know every state is different but mine as an exemption.

[fab_finds4u]

NO, eBay doesn't collect sales tax on behalf of sellers. Sellers owe no sales tax.

Buyers owe the sales tax. There are no exemptions for a buyer that makes a purchase from an occasional seller.

[soh.maryl]

You appear to be extremely knowledgeable about state sales tax for your state; however, state sales tax is calculated on the basis of the buyer's delivery location, not the shipper's location.  I cannot determine from your message whether or not you, as a seller, are aware of that.

In summary, a buyer on eBay, and on other Marketplace Facilitators, pays the seller the item price, the shipping cost and the state sales tax, if applicable.  eBay remits the sales tax to the Treasury Department of the state where the buyer has his package delivered.  eBay calculates its final value fee which the seller pays based on the total paid by the buyer to the seller, including state sales tax.  

Just curious:  As a resident of the State of Minnesota, do you not pay state sales tax when you shop at WalMart? (I use that example because I think every state has at least one.)

[myangelandmyprincess]

Minnesota doesn't have an exception like you state in fact such an exception wouldn't make sense considering  the marketplace facilitator laws are so that sales tax are collecting for sellers who don't meet the threshold to collect themselves.  The only exception Minnesota has is actually basically the opposite of what you stated which is if the seller shows their own tax id to the facilitator (eBay) or if they agree to collect and remit on their own.  Which would mean you'd still be paying it. 

[1786davycrockett]

@soh.maryl 

The OP's argument is rather unique, as well as unusual.  The OP is basing his argument on this Minnesota statute:

"Subd. 23. Occasional sales. Isolated and occasional sales in Minnesota not made in the normal course of business of selling that kind of property or service are exempt. The storage, use, or consumption of property or services acquired as a result of such a sale is exempt. This exemption does not apply to sales of tangible personal property primarily used in a trade or business."

So, basically, the OP is arguing that, since he sells VERY infrequently (and, indeed,  his site currently shows only ONE item for sale), that his sales (if any) are only "occasional," and therefore his buyers from ANY state are exempt from paying ANY sales tax (the equivalent of an "on-line garage sale").

The OP  seems to be arguing on the behalf of the OP's potential buyers, and NOT for the OP himself.  

However, considering the potential petty amount of sales tax involved (less than $10.00, if the OP's lone item were to be sold to someone in California), it is unlikely that the OP's case will be attractive to any law firm.

And, to my knowledge, eBay currently has no seller designation for "occasional" sales -- either you are a seller, or not:  there is no "in-between" classification.

[eburtonlab]

So, basically, the OP is arguing that, since he sells VERY infrequently (and, indeed, his site currently shows only ONE item for sale), that his sales (if any) are only "occasional," and therefore his buyers from ANY state are exempt from paying ANY sales tax (the equivalent of an "on-line garage sale").

Minnesota state lawmakers can impose rules and obligations on Minnesota residents and businesses, but cannot legally alter the existing obligations residents of other states have to pay sales tax required by their respective states. Nor do the "remote seller" rules described apply to sellers that use online marketplaces which are subject to different rules and limits.

Qualifying remote sellers may not be obligated to collect Minnesota sales tax directly, but eBay is still obligated to collect sales tax from buyers in states that have "Marketplace provider" laws, and Minnesota is one of those states.

https://www.revenue.state.mn.us/sales-tax-marketplace-providers

[buyselljack2016]

@rexdroid 

the marketplace facilitator laws supersede/supplement/override/or do not apply to isolated sales/purchase laws.

If I had my own website my sales would likely not meet the requirements for me to collect/remit sales tax to any state other than my own. Buyers would be on their own to pay their "use taxes" as applicable in their location.

Bring on eBay buying/selling, and all that goes out the window as different laws apply.

[1786davycrockett]

@eburtonlab 

"Minnesota state lawmakers can impose rules and obligations on Minnesota residents and businesses, but cannot legally alter the existing obligations residents of other states have to pay sales tax required by their respective states. Nor do the "remote seller" rules described apply to sellers that use online marketplaces which are subject to different rules and limits."

Don't get me wrong -- I totally agree with you regarding eBay's legal liability (as a marketplace facilitator) to collect the state sales tax from eBay sales, to remit to the proper individual state authorities.  That was settled in 2018, by the U. S. Supreme Court.

I'm just remarking on the creative interpretation by the OP of an obscure Minnesota statute, and the OP's  theoretical argument to assist the OP's potential buyer(s) from being required to shell out less than $10.00 in state sales tax.  

And the additional reality that eBay's team of financial lawyers are definitely not going to break out in a sweat regarding esoteric and eccentric Minnesota state statutes, that (as pointed out) have absolutely NO legal liability against other states.

If the OP wishes to push this matter higher, the OP may have some difficulty in finding legal representation.

[monroe67]

"My state requires that a business collect sales tax and an individual pay a use tax if a business does not charge a sales tax. Which will only show up on onsite merchants websites when buying from an out of state merchant that does less then $15k a year of sales in to Minnesota. My state exempts sellers from collecting a sales tax if they are not a business and the online equivalent of a garage sale. Individuals buying from someone that is not a business do not pay the sales tax. Minnesota Statutes, section 297A.67, subdivision 23, exempts isolated and occasional sales of tangible personal property or a service made by a person who is not engaged in selling such property or service in the normal course of business from the sales or use tax. Despite this eBay has been illegally collecting sales tax for these kinds of transactions."

I am sincerely impressed with your apparent knowledge of Minnesota's tax laws, at least one section and all its subdivisions.  

You may know that sales taxes, when collected by eBay, are charged at the percentage in effect at the delivery address.  Those sales taxes are paid by the buyer.   

For transactions that take place completely on/within eBay, the distinction of whether a seller is a "business" or not is immaterial.  That distinction does not exist, in sale transactions that take place on eBay.  Even in Minnesota.  

When the item is taxable at the the delivery address, the buyer will pay sales taxes.  (Which could lead into a discussion of Item Category, though I do not wish to poke that  hornet's nest.)  

The sales taxation for any U.S.-based eBay seller's transactions which occur completely on/through/with eBay

                                       is eBay's job. 
As a marketplace facilitator, eBay is considered the "retailer" who has the burden of collecting sales taxes.  
As a seller on eBay, none of us have to bother our pretty or handsome little heads with any worries about sales taxes which are paid by our buyers.  

All of this came about as a result of the 2018 U.S. Supreme Court case of South Dakota v. Wayfair.  

eBay is not acting illegally when they collect sales taxes for transactions done on their platform.   

[1786davycrockett]

@monroe67 

Note as well the EXACT wording from the Minnesota statute upon which the OP is basing his argument:

"Isolated and occasional sales in Minnesota not made in the normal course of business of selling that kind of property or service are exempt. "

BUT. . .if an eBay buyer is making their purchase from California (or Massachusetts, or any of the other United States and territories which may charge a sales tax), has the "isolated and occasional sale" actually been made "in Minnesota"?

I suspect not.  I suspect that most eBay buyers would consider themselves to be residing in whatever taxable (or nontaxable) location they may physically find themselves, at the time of that particular purchase -- and the vast majority will agree that that location will NOT be "in Minnesota."

While the OP may be offering items for sale FROM Minnesota, a sale is not a sale until there is a buyer -- and that buyer may not necessarily be a Minnesota resident.

The OP may have been legally tripped up by his own argument; or, as Shakespeare phrased it "hoist with his own petard."

[janet9988]

https://www.ebay.com/help/buying/paying-items/paying-tax-ebay-purchases?id=4771&st=3&pos=2&query=Pay...

https://www.revenue.state.mn.us/sales-tax-marketplace-providers

[rexdroid]

I am talking about a situation where the buyer is in Minnesota and the seller is in Minnesota. Since it's based on the buyer for the sales tax. And I am wondering if it would also apply if the buyer is in Minnesota and the Seller is in California. Since I bought something from a seller that only makes isolated or occasional sales and is therefore not a business. They seem to be charging me Minnesota Sales tax anyways but would do they not fall under Minnesota Statutes, section 297A.67, subdivision 23. Remote sellers are generally don't remit sales tax if they are below

• 200 retail sales shipped to Minnesota
• Less than $100,000 in retail sales shipped to Minnesota

However I understand if you sell on eBay it's a marketplace facilitator and that they don't look at what the seller sold to that state. But they look at the whole platform. And all the sellers aggregated on here exceed the threshold. Would the marketplace facilitator rule also supersede the occasional seller who is not a business as well? Or is this so obscure and novel of an issue that there is no definitive legal answer on this. And it likely is such a small group that it effects that no one has hired a lawyer or looked into it?

[rexdroid]

After re-reading it seems to be very niche. It likely would not apply to someone in Minnesota buying something from a seller outside of Minnesota. And for sure does not apply to buyers outside of Minnesota buying stuff from a Minnesota seller.

But it would appear it does apply if both the buyer and the seller are both in Minnesota. Is eBay aware of this I have not tested it yet as I would have to either buy something from a Minnesota seller as a Minnesota buyer. Or a Minnesota buyer would have to buy something from me a Minnesota seller. And the seller would have to be an occasional seller to fall under the obscure exemption.

[eburtonlab]

Would the marketplace facilitator rule also supersede the occasional seller who is not a business as well?

If someone sells on eBay, eBay's status as a marketplace facilitator determines whether sales tax is collected (if the buyer's state requires it), even if the seller is an infrequent seller.

That is whole point of the marketplace facilitator laws implemented by the states since the Wayfair supreme court ruling -- to require eBay and other marketplaces to collect sales tax that would otherwise not be feasible to be collected from numerous occasional sellers by making the marketplaces do the collecting. It is much easier for states to impose those requirements on eBay and a handful of other online marketplaces rather than going after the individual sellers, and the laws were written specifically for that purpose.