Does eBay collect and remit the required local and state sales taxes for Colorado?

[canesi]

Before I set up my business, I'm researching the tax requirements. I'm confused about state and local sales taxes.  I have economic nexus in Colorado so for any sales I make to Colorado addresses, the buyer must pay Colorado sales tax and if local taxes apply (for home rule cities, etc.), those must be collected and remitted also.  Is this correct?  Does eBay collect and remit the CO state AND local taxes for me?  Example: Carbondale, CO, is a home rule city. They have their own local sales tax. If I were to sell and ship an item to a Carbondale address would eBay collect and remit both the state and local tax for me?   If eBay collects and remits, do I have any responsibilities in that process?  Thank you!  

[thevintagesilvershop]

I'm in CO and am making the assumption that Ebay collects and submits ALL sales taxes required (even that weird home rule one).  Best to go to the DOR website and read a bit and/or call them:

https://www.colorado.gov/revenue

If Ebay, for whatever reason, is NOT collecting all taxes, then the DOR needs to take it up with Ebay.  Ebay is the Marketplace Facilitator, Ebay needs to do what DOR wants or has prescribed.  DOR has not contacted me to tell me that even though Ebay is collecting sales taxes, they are not collecting XXX and therefore I must collect XXX.

That's my story and I'm sticking to it.  Since I only have 10 - 15 CO sales a year, I'm not too worried about this.  I've collected all taxes up until 10/1/19 and will submit those as required with my annual report and note the ones Ebay collected for me. 

[de*be]

@jhelffrichw
I'm in Texas and spoke to a representative in the Comptrollers office. I don't think she is up to speed. While I was on hold I had a sale here in TX and the sales tax didn't appear on the payment notice from PP which was always reported before this sale.

I then talked to an ebay CS rep. She told me ebay collects 8% sales tax for TX. Well where I live I have to charge only 6.25%. My buyer confirmed that he was charged 8%.

Have no clue how the 12.5% you were charged was figured.

[mam98031]

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@de*be wrote:
@jhelffrichw
I'm in Texas and spoke to a representative in the Comptrollers office. I don't think she is up to speed. While I was on hold I had a sale here in TX and the sales tax didn't appear on the payment notice from PP which was always reported before this sale.

I then talked to an ebay CS rep. She told me ebay collects 8% sales tax for TX. Well where I live I have to charge only 6.25%. My buyer confirmed that he was charged 8%.

Have no clue how the 12.5% you were charged was figured.

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@de*be 

That is where having your account addresses containing your full zip code will help.  If a buyer only has their 5 digit zip code in their address set up, then they will be charged the flat rate for sales tax that your state has determined for Ebay to charge.  But if they want to be more accurate to their location, they need to get that 4 digit tail number added to their delivery address.  That will enable the software to pinpoint where they are in the state and the exact rate that is to be charged to them.

[de*be]

Thank you. I added my zip extension to my address earlier today.

[ste-9405]

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@de*be wrote:
Well where I live I have to charge only 6.25%.

My buyer confirmed that he was charged 8%.

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The buyer is not charged where you live, @de*be. The buyer is charged according to the delivery address, which is usually, but not always, where they live. So that shipping address must be in an 8% area.

But if you buy something delivered up your hill, THEN eBay will charge you that 6.25% where you live.

[thevintagesilvershop]

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@ste-9405 wrote:

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@de*be wrote:
Well where I live I have to charge only 6.25%.

My buyer confirmed that he was charged 8%.

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The buyer is not charged where you live, @de*be. The buyer is charged according to the delivery address, which is usually, but not always, where they live. So that shipping address must be in an 8% area.

But if you buy something delivered up your hill, THEN eBay will charge you that 6.25% where you live.

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It varies from state to state whether the tax is charged destination based or origin based.  Texas is origin based as follows from Tax Jar:

"Texas is an origin-based sales tax state. So if you live in Texas, collecting sales tax is fairly easy. Collect sales tax at the tax rate where your business is located. Example: You live and run your business in Plano, TX, in the 75023 zip code."

I think you gave de*be wrong info. Everyone should check with their state's DOR as to whether to charge destination based or based on your origin.  Most states are destination-based, 11 states are origin-based including Texas.

[mansons2005]

And many states are BOTH origin and destination based, depending on the location of the seller, and as with Illinois (in January 2021?), the rates and exemptions can vary widely. Out of state sales (destination) will be charged 6.25% (?), in state sales (origin) will be charged based on the rate where the buyer has the item delivered. With the exception of farm machinery, there are NO exemptions for destination based sales, while regular exemptions (skimpy as they are) will apply to origin based sales.
Yeah - it took me a while to comprehend all of that as well...............................

[mam98031]

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@mansons2005 wrote:
And many states are BOTH origin and destination based, depending on the location of the seller, and as with Illinois (in January 2021?), the rates and exemptions can vary widely. Out of state sales (destination) will be charged 6.25% (?), in state sales (origin) will be charged based on the rate where the buyer has the item delivered. With the exception of farm machinery, there are NO exemptions for destination based sales, while regular exemptions (skimpy as they are) will apply to origin based sales.
Yeah - it took me a while to comprehend all of that as well...............................

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What?  Explain that a bit more please or provide a link and I'll read up on the subject.

There is NO state that can charge a Sales Tax on something that is shipping OUT of state.  That would make it an export tax and it is unconstitutional.

[thevintagesilvershop]

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@mam98031 wrote:

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@mansons2005 wrote:
And many states are BOTH origin and destination based, depending on the location of the seller, and as with Illinois (in January 2021?), the rates and exemptions can vary widely. Out of state sales (destination) will be charged 6.25% (?), in state sales (origin) will be charged based on the rate where the buyer has the item delivered. With the exception of farm machinery, there are NO exemptions for destination based sales, while regular exemptions (skimpy as they are) will apply to origin based sales.
Yeah - it took me a while to comprehend all of that as well...............................

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What?  Explain that a bit more please or provide a link and I'll read up on the subject.

There is NO state that can charge a Sales Tax on something that is shipping OUT of state.  That would make it an export tax and it is unconstitutional.

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I agree, need more explanation.  Mansons explanation doesn't make sense to me.  A state tax charged is either origin or destination based.  Not BOTH. 

[mam98031]

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@thevintagesilvershop wrote:

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@mam98031 wrote:

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@mansons2005 wrote:
And many states are BOTH origin and destination based, depending on the location of the seller, and as with Illinois (in January 2021?), the rates and exemptions can vary widely. Out of state sales (destination) will be charged 6.25% (?), in state sales (origin) will be charged based on the rate where the buyer has the item delivered. With the exception of farm machinery, there are NO exemptions for destination based sales, while regular exemptions (skimpy as they are) will apply to origin based sales.
Yeah - it took me a while to comprehend all of that as well...............................

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What?  Explain that a bit more please or provide a link and I'll read up on the subject.

There is NO state that can charge a Sales Tax on something that is shipping OUT of state.  That would make it an export tax and it is unconstitutional.

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I agree, need more explanation.  Mansons explanation doesn't make sense to me.  A state tax charged is either origin or destination based.  Not BOTH. 

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I know what you are saying, but just so others are clear.  That means a state sales tax, any state's sales tax, HAS TO BE based on the address in which the item is either delivered to or possession of it takes place.

So like when you go to the store and buy something.  You are taking possession of it there and therefore if it is a taxable item, you are charged sales tax.

On the internet someone in NY may ship to something and you take delivery at your home in Texas.  Sales tax is owed for the state of Texas, where you took delivery of the item.

[thevintagesilvershop]

I'm talking about in-state sales ONLY.

Some states require you, the seller, to charge sales tax where you ship the item to WITHIN your state (this is destination based).  Other states require you, the seller, to charge sales tax based on the seller's location and it doesn't matter where the buyer lives (this is origin based).

I've lived in both kinds of states.  These methods are different and based on the state laws.  Destination based is MUCH harder to manage.

This is a good article to read:

https://www.avalara.com/us/en/learn/whitepapers/origin-vs-destination-sales-tax.html

[mansons2005]

Let me see if I can simplify - not simple with a complex law! If the seller is located in Illinois and the item is being delivered to Illinois (origin based) the usual tax applies. Now, if a seller is located in another state, there is a "destination" (Illinois is the destination) tax - in this case the Marketplace Facilitator tax. Both will be collected by eBay in the future (origin based has "always" been in place but collected by the seller).

As I mentioned, it took me a few re-reads to get this down myself...........................

[thevintagesilvershop]

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@mansons2005 wrote:
Let me see if I can simplify - not simple with a complex law! If the seller is located in Illinois and the item is being delivered to Illinois (origin based) the usual tax applies. Now, if a seller is located in another state, there is a "destination" (Illinois is the destination) tax - in this case the Marketplace Facilitator tax. Both will be collected by eBay in the future (origin based has "always" been in place but collected by the seller).

As I mentioned, it took me a few re-reads to get this down myself...........................

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That makes it clearer as to what you were trying to say. 

But, leave the Marketplace facilitator out of it.  Pretend I don't sell on Ebay.  If I live in TEXAS and sell via mail to a customer in TEXAS since TEXAS is a origin based state, I charge the buyer based on my (the seller's) location.  If I live in MINNESOTA and sell to a customer in MINNESOTA via mail order since MINNESOTA is a destination based state, I charge the buyer based on the BUYER'S location.

I, personally, don't care how the Marketplace Facilitator charges.  That's their problem and the state they are collecting for problem. 

[mam98031]

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@mansons2005 wrote:
Let me see if I can simplify - not simple with a complex law! If the seller is located in Illinois and the item is being delivered to Illinois (origin based) the usual tax applies. Now, if a seller is located in another state, there is a "destination" (Illinois is the destination) tax - in this case the Marketplace Facilitator tax. Both will be collected by eBay in the future (origin based has "always" been in place but collected by the seller).

As I mentioned, it took me a few re-reads to get this down myself...........................

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I think you are over complicating this.  Sales tax is charged by the state that the item is either purchased in or delivered in [take possession].  

"...Now, if a seller is located in another state, there is a "destination" (Illinois is the destination) tax"  This is a big NO.  There is NO destination tax charged by the state that an item originates in.  That would be an export tax and that isn't constitutional.  

1.  Shipping from Illinois to Illinois there will be a sales tax for the state of Illinois.  2.  Shipping from Illinois to Washington, there will be a sales tax for Washington.  Illinois does not collect any taxes in statement #2.

[mansons2005]

But if Illinois is the DESTINATION (ie an item being shipped into Illinois from another state) the state of Illinois charges tax (Marketplace Facilitator Tax). That is the law's definition of Destination. They are totally unconcerned with the destination of items being shipped OUT of Illinois.
So - they define Origin as from Illinois to Illinois, and they define Destination as from outside Illinois to Illinois.