California just increased their Internet Sales Tax Threshold

[cascarole]

California just increased their internet sales tax threshold from  to 500,000. The new law requires collection and remittance of sales taxes ONLY if the seller does $500,000 or more in business with the state of California.

I'm a small seller, but a 500K threshold to a state as big as California is a pretty significant number. Will ebay adjust it accordingly or still charge the tax to customers of small sellers? 

[forgottenape]

ebay only takes tax where they are required to do so as a facilitator. california doesnt impose facilitator tax yet your required to remit on your own

[nobody*s_perfect]

I believe that California is one of the states that apply the threshold to "Marketplace facilitators", in which case the threshold applies to eBay itself, not to individual eBay sellers.

https://community.ebay.com/t5/Announcements/UPDATE-Ongoing-Changes-in-How-Internet-Sales-Tax-May-Imp...

https://www.pillsburylaw.com/en/news-and-insights/california-enacts-marketplace-facilitator-legislat...

https://www.salestaxinstitute.com/resources/state-notices-resources-for-remote-sellers

[dtexley3]

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never mind, you edited your post to add the links to the announcement that CA had changed... hehehehe.

[the*dog*ate*my*tablecloth]

The EBay help page does not list CA as aState they are collecting for

https://www.ebay.com/help/selling/fees-credits-invoices/taxes-import-charges?id=4121

[dtexley3]

clipped from the pillsburylaw article:

"The new Marketplace Facilitator Act (the Act) carefully distinguishes between marketplace facilitators and marketplace sellers and their respective sales or use tax obligations. Beginning October 1, 2019, marketplace facilitators are statutorily the seller or retailer in a sales transaction they facilitate for a marketplace seller."

So we should see eBay begin to collect for CA sales on Oct 1st of this year.

@the*dog*ate*my*tablecloth 

[the*dog*ate*my*tablecloth]

Thank you!

[dtexley3]

You are welcome!  My first thought was that eBay was already behind the 8 ball because the article first stated "effective April 1, but not retro-active".  Had to read quite a bit further to see the Oct 1 for MF part.

[cascarole]

Thank you! I saw the April 1st date as well! 

[autopiacarcare]

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@dtexley3 wrote:

So we should see eBay begin to collect for CA sales on Oct 1st of this year.

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Assuming eBay gets their *stuff* together.   Washington DC Marketplace Facilitator law went into affect April 1 and there is still no mention of it anywhere on eBay and they are not collecting it.

[escuintla]

For a minute I got scared! 

What a relief!

Now, let's get back to selling, just $497,000 to reach that goal. Am I going to make it?

Yeah, I didn't think so! 

[cascarole]

Follow up to my own question:

The ruling states that marketplace facilitators have to collect taxes on behalf of these retailers, but only if they have at least $500,000 of annual sales in California. 

The sentence is worded strangely,T I am assuming that THEY refers to the retailer.  Am I reading it correctly?

If that is the case, they are collecting for everyone, but are they remitting to the state for everyone? If they collect $1,000,000 from customers in California (to use a round number) and none of the retailers reached the $500,000 threshold, are they refunding the customers? Sorry if I sound confused but I am confused!

[the*dog*ate*my*tablecloth]

Marketplace facilitator laws are generally determined by the sales facilitated by the facilitator. Not by individual seller. Regardless it’s ebays problem.

[autopiacarcare]

To quote from the article @dtexley3 shared -

"Beginning October 1, 2019, marketplace facilitators are statutorily the seller or retailer in a sales transaction they facilitate for a marketplace seller."

My reading on that would be that under this law, eBay will be considered the seller/retailer, so the threshold would apply to the total for all sales through eBay to California, not to each individual seller account.