Taxes

[dhweav36]

When did the U.S. Congress authorize on line sellers to charge on line customers a TAX?  

[pburn]

Sales tax laws are promulgated at the state level, not the federal level, so the U.S. Congress had nothing to do with it; rather, that decision was made by the Supreme Court of the United States on June 21, 2018:

"On June 21, The United States Supreme Court ruled 5-4 in South Dakota v. Wayfair that states can mandate that businesses without a physical presence in a state with more than 200 transactions or $100,000 in-state sales collect and remit sales taxes on transactions in the state."

As a marketplace facilitator, eBay is required by the sales tax laws IN YOUR STATE to collect and remit the sales tax to the appropriate taxing authority in your state.

[7606dennis]

The United States Congress didn't.  What is being collected is state sales tax under market facilitator laws passed by numerous states since the US Supreme Court ruled tat it was constitutional to pass such laws.

Of course, almost all states that have sales tax laws on the books also have use tax statutes that required their residents having goods delivered to them within the state from merchants out the state for which sales tax has not been paid, to pay that tax directly to the state themselves.  It is a tax owed by the buyer.

[beez5720]

Summer of 2018, USSC gave the go-ahead.
It has been in the Seller Updates every quarter since then, as new states are being added just about every month.
It was in the news.

[femmefan1946]

Interesting that the approval came from a Supreme Court carefully crafted to promulgate  "conservative" interests. 

[omgitlightsup]

Sales tax is added by eBay, not sellers.  Sellers aren't even warned at the time of listing that this will happen.

I came back to selling recently after a long hiatus. I was surprised when one of my items sold to a buyer in the same state. I assumed I did something wrong, so I attempted to remove the tax.

Wanna hear something else funny? You can't! eBay will not allow you to discount an item for more than the amount of the tax. So if you want to discount an item post-sale, for any reason, your discount better not be more than the sales tax.

If you want to blame someone, blame the millions of high-volume drop shippers that have taken over eBay and turned it into alibaba or amazon. We weren't a target for state revenue when we were trading Atari cartridges and porcelain figures in the 90s.

[mudshark61369]

@omgitlightsup,

  "Sales tax is added by eBay, not sellers".

Yes eBay by law is a Marketplace Facilitator and has to collect the taxes, so do other sites who are Facilitators. 

  "I came back to selling recently after a long hiatus. I was surprised when one of my items sold to a buyer in the same state. I assumed I did something wrong, so I attempted to remove the tax".

You were attempting to remove a tax you are bound to collect. It is because of sellers who refused to collect and pay taxes on sales within their own states, that many states have joined in collecting the taxes on out of state internet sales.

  "If you want to blame someone, blame the millions of high-volume drop shippers that have taken over eBay and turned it into alibaba or amazon. We weren't a target for state revenue when we were trading Atari cartridges and porcelain figures in the 90s".

The first attempt to collect sales tax on internet sales was introduced in 1992, at the very beginning of internet sales. With the growth of internet sales, states felt (rightly) that they were not receiving the taxes they were entitled to collect and several lawsuits were filed in Federal District and with State Supreme courts. Some made it to the USSC but were bounced back to the lower courts. Anybody involved in online selling should have been paying attention. 

[mudshark61369]

@femmefan1946,

  "Interesting that the approval came from a Supreme Court carefully crafted to promulgate "conservative" interests".

As a Canadian citizen, before making such spurious comments, read the history behind the North Dakota v. Wayfair Inc. decision.  It came about as a result of many law suits, and state and federal tax proposals over the last 18 years or so.

Once you have read the history behind the decision, get a list of the states who are or will collect a sales tax on internet sales, and compare it to a Red - Blue map of the U.S.. The results may surprise you.

[sharingtheland]

Wanna hear something else funny? You can't! eBay will not allow you to discount an item for more than the amount of the tax. So if you want to discount an item post-sale, for any reason, your discount better not be more than the sales tax.

Hmmm, so, if you attempt to refund the exact amount of tax the buyer paid, that refund is denied?

If that is the case, the tax has been collected and remitted so what's it to ebay if you, seller, out of your own pocket give the buyer that discount?  

Also, if that is the case, that's verrry interesting (RIP Arte).  Ebay can program that but not the correct dates for postal holidays.

[s.kms_25]

If you want to blame someone, blame the millions of high-volume drop shippers that have taken over eBay and turned it into alibaba or amazon. We weren't a target for state revenue when we were trading Atari cartridges and porcelain figures in the 90s.
__


No, blame the millions of buyers who failed to remit use/sales tax, and the millions of sellers who were supposed to collect sales tax to remit to their state and didn't bother to do so.

[s.kms_25]

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@mudshark61369 wrote:

@femmefan1946,

  "Interesting that the approval came from a Supreme Court carefully crafted to promulgate "conservative" interests".

As a Canadian citizen, before making such spurious comments, read the history behind the North Dakota v. Wayfair Inc. decision.  It came about as a result of many law suits, and state and federal tax proposals over the last 18 years or so.

Once you have read the history behind the decision, get a list of the states who are or will collect a sales tax on internet sales, and compare it to a Red - Blue map of the U.S.. The results may surprise you.

---

South Dakota vs Wayfair

https://en.m.wikipedia.org/wiki/South_Dakota_v._Wayfair,_Inc.

[3eyedfishcatcher]

You do know the no tax on internet purchases was never meant to be permanent. It was initiated to help develop and grow online businesses. It is at least 10 to 15 years out dates and states, counties, and cities are not getting the sales taxes they should be receiving causing major deficits in their budgets. 

[omgitlightsup]

I’m bound to collect the tax but I’m not bound by any law to raise the price I charge a customer in order to pay that tax. My motivation is to not surprise buyers like OP with yet more fees on top of shipping and the already ridiculous premiums charged by eBay/PayPal. 

You will frequently find merchants advertising the “we pay the tax” angle and there is nothing wrong with that as long as the tax gets paid... and the tax is paid. eBay collects it directly out of what the buyer pays at checkout. 

Please don’t get too far ahead of yourself trying to guess what my motives are. I’m sure you have plenty to do running your own business. 

[southern*sweet*tea]

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@s.kms_25 wrote:
If you want to blame someone, blame the millions of high-volume drop shippers that have taken over eBay and turned it into alibaba or amazon. We weren't a target for state revenue when we were trading Atari cartridges and porcelain figures in the 90s.
__


No, blame the millions of buyers who failed to remit use/sales tax, and the millions of sellers who were supposed to collect sales tax to remit to their state and didn't bother to do so.

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^^^THIS^^^

[omgitlightsup]

This is a narrow-minded point of view, probably common among relatively new users who came here to cash in on the cottage industry of online auctioning.

But if you were here in the 90s, you might be able to see it from the point of view of people who sell in small volumes and who weren't abusing any tax laws back then, and still aren't; by selling odd lots here and there for a few hundred dollars a year, and buying the occasional secondhand collectible.

In the USA, most of it over the last century at least, garage sales and flea markets are not subject to sales tax. It's capital gains tax. If you don't keep a regular storefront you aren't a merchant according to the IRS.

This is why some people disagree with the policy that everything sold here needs to have state sales tax on it. We could pay capital gains just as easily as sales tax, and many of us do. The difference is that with capital gains you only have to pay on your profit. So if you auction off your used baby clothes and make a third what you paid for them new, you still have a tax advantage.

Many sellers here are not merchants by trade, we're not competing with stores, and we feel like sales tax on something we already paid sales tax for is unfair. Drop shippers and resellers do not pay sales tax on wholesale goods. 

And yeah, you'll find that in the past few years, many states have responded to the skyrocketing volume of eBay sales by writing new laws to get in on the action, but note that the vast majority of dollars moved here are not going to people cleaning out their garage or selling a departed loved one's collectibles, but to businesses moving truckloads of stuff a month. The states likely would not have paid much attention to writing legislature to collect a few pennies per capita in yearly tax revenue.

And even with all of this, it's still not a technical impossibility for eBay to put sales tax in force for only sellers who hit a volume limit, or give users a choice to file capital gains at the end of the year instead of trying to reconcile sales tax with no sales business... and still comply with the law. But eBay has never favored the small guys, because the small guys don't bring in the dollars like the drop shippers and corporate members. We just get plowed over as usual.

Something to think about, before you get all self righteous and point fingers at other people who seem unreasonably put-off by the notion of sales tax on eBay for each and every seller/item.