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.

[tobaccocardyahoo]

It is common for new Ebay sellers to think that Ebay is breaking one law or another, and assume they are better informed than thousands of other more experienced Ebay sellers.

I have yet to see a seller who has posted a novel and correct appraisal of the legality of Ebay procedures and policies.

[janet9988]

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@rexdroid wrote:

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?

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Just HOW would you know how big or small a seller is in the first place?

Do you ask every sell for their financial tax record?

[1786davycrockett]

@rexdroid 

Responding to your following comments:

"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."

Okay -- let's see if we can make this clearer:

First of all -- the state of Minnesota is legally not allowed to enforce its own laws beyond its own state borders.  Thus, Minnesota has NO power to block the collections of sales taxes in other states, that were accrued as the result of on-line sales by buyers in those states, who made purchases from a seller in Minnesota.

Secondly -- since all eBay sales are conducted with eBay as a third party market facilitator, the exemption stated in Minnesota statute 297A.67, subdivision 23 is voided, since the addition of eBay as a CONSTANT marketplace facilitator no longer makes those sales either "occasional" or "isolated."

And thirdly -- if you are sincerely concerned about the legal nature of Minnesota statute 297A.67, subdivision 23 as it applies to online sales administered by a market facilitator, according to the 2018 U. S. Supreme Court decision of South Dakota Vs, Wayfair Inc., perhaps you should be contacting either the Minnesota Secretary Of State or the Minnesota Attorney General.  Their addresses are as follows:

Steve Simon

Office of the Minnesota Secretary Of State

First National Bank Building

332 Minnesota Street, Suite N201

St. Paul, MN 55101

or

Keith Ellison

Office of the Minnesota Attorney General

445 Minnesota Street, Suite 1400

St. Paul, MN 55101

Either of them will surely provide you with the legal clarification of the Minnesota statute with which you are concerned, than any of us on the eBay community boards.

[soh.maryl]

Again, the state sales tax as collected by eBay is calculated based on the buyer's delivery address.

The address of the seller does not matter.  If the seller is in Minnesota and the buyer is in Ohio, the state sales tax is charged based on the buyer's address in Ohio.  If both the seller and buyer are in Minnesota, the state sales tax is charged based, again, on the buyer's location in the state of Minnesota.

Not sure why you appear to be having a difficult time accepting this.  Honestly, it IS the way it works. 

Not sure why you believe it's "very niche".  It applies to just about every sale on eBay other than those delivered to a buyer in a state that has no state sales tax, like Alaska, Delaware, Oregon and I forget the one or two others.  

[mudshark61369]

@rexdroid,

You are spending a lot of time arguing over this issue, when all we can do is quote policies, and the reasons why you may be charged a sales tax.  If you feel you are being charged a tax you should not be charged, I would suggest gathering up your information about the seller and buyer and take screen shots of the sold item or order details.  When you file your taxes you can try claiming a deduction, but it might be better if you contact your states treasury dept., using the info provided by @1786davycrockett  first. 

[soh.maryl]

My take on this was that the OP was posting as a seller, not as a buyer.

And I think I should give up responding.

[1786davycrockett · Accepted solution]

@rexdroid 

"But it would appear it does apply if both the buyer and the seller are both in Minnesota."

According to the Minnesota statute in question:  If YOU as (a resident of Minnesota) wish to sell an item to another individual, and this potential sale is NOT connected with a current business in which you are concerned, and it is an "isolated" and "occasional" sale (similar to a garage sale, or similar one-to-one sales), you may certainly proceed with such a sale, with no need to charge the buyer the appropriate Minnesota sales tax, no matter the state in which they may be living.

BUT -- by introducing a third-party market facilitator (such as eBay) into the equation, you have voided the Minnesota statute, since the on-line platform is neither "occasional" nor "isolated":  eBay has been an ongoing sales enterprise for well over 20 years, and you have chosen to use that market facilitator as your sales partner.

Next time, just try a garage sale.

[mudshark61369]

---

@1786davycrockett wrote:

@rexdroid 

"But it would appear it does apply if both the buyer and the seller are both in Minnesota."

According to the Minnesota statute in question:  If YOU as (a resident of Minnesota) wish to sell an item to another individual, and this potential sale is NOT connected with a current business in which you are concerned, and it is an "isolated" and "occasional" sale (similar to a garage sale, or similar one-to-one sales), you may certainly proceed with such a sale, with no need to charge the buyer the appropriate Minnesota sales tax, no matter the state in which they may be living.

BUT -- by introducing a third-party market facilitator (such as eBay) into the equation, you have voided the Minnesota statute, since the on-line platform is neither "occasional" nor "isolated":  eBay has been an ongoing sales enterprise for well over 20 years, and you have chosen to use that market facilitator as your sales partner.

Next time, just try a garage sale.

---

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@1786davycrockett,

Have you thought about going to work for a treasury dept. or ebay employee as a taxation specialist? 

Oh Wait,

I forgot that none of those entities are willing to hire those with IQs higher than that of the heads of those departments.  Unfortunately, most of them seem to only have scores in the lower end of the 85 - 115 average intelligence range. Which makes you over qualified.

Too bad common sense is not a qualifying factor as well.

[janet9988]

Can someone explain how Mudshark accepted a best answer for  the OP?

[1786davycrockett]

@janet9988 

Don't know -- wasn't me!

[rexdroid]

I don't agree with this being solved out and a best answer selected without me picking it. I went ahead and contacted Minnesota Attorney General. The answer I got was that since eBay would constitute marketplace facilitator it falls under the recent marketplace facilitator law so it no longer makes those sales either "occasional" or "isolated." Where they were in the past if both the buyer and seller where local. Also since posting my state decided to raise the sales tax an additional 1% so the combined rate has increase from 7.85% to 8.85% now. I think they are greedy at this point. Tax revenue is way up already as it is now that they collect every cent they get from online sales. You would think taxes would go down now with the surplus.

[soh.maryl]

What "surplus" would that be? Are you saying that the State of Missouri has a surplus in its state treasury? 

[1786davycrockett]

@soh.maryl 

Minnesota -- not Missouri.

And the additional 1% state sales tax is not a statewide tax -- it only applies to the 7 metropolitan counties which constitute the Twin Cities area -- and NOT all 87 counties in the state.

For clarification, here's what Minnesota Public Radio reported:

Consumers in the Twin Cities metro area can expect items to be a little pricier as a new sales tax increase goes into effect on Sunday.

Anoka, Carver, Dakota, Hennepin, Scott, Ramsey and Washington are the seven counties in the metropolitan area that will see a one percent tax increase. In other words, whenever you spend $100 there will be an extra $1 added onto the receipt. Groceries, clothing and prescription drugs will still remain exempt from sales taxes.

The tax hike was put into play this last legislative session when lawmakers approved local sales tax funds to support better transportation and affordable housing. Over the next four years, collections from the new sales tax are expected to reach $2 billion.

A quarter-cent of the sales tax increase is set to address housing, which is broken down into two sections. One is a new state rental assistance program that will provide up to 5,000 new rental vouchers statewide; 3,000 of those will be for low income renters in the metro area. The other part funds the production of new affordable homes through city and county aid.

[rexdroid]

For the State of Minnesota's treasury. We are running a 1.5B+ surplus right now estimated to rise to $2.4B. The state ended up sending out $260 checks to everyone this year that had incomes of $75k or less single and 150k or less married.

[rexdroid]

Almost 2/3 the States population is in only those 7 metropolitan counties. But at least good to know that it doesn't apply to 80 other counties. May encourage people to tour and visit these smaller less known counties as a vacation destination.