Internet tax death of ebay

[warren689]

WOW, Just WOW.  Used clothing being taxed. Items from China being taxed. Who on earth is going to buy used clothing or poor quality items from China that can't be returned when you have to pay $20 tax? I mean for real?   Why is used stuff being taxed when it was taxed the first time it was sold? What's next? Will Garage sales charge tax?  I can't believe our elected officials allowed this to happen. I can understand tax on large businesses but small time people selling used stuff out of their closet is crazy.

[anthology-of-treasures]

Salvation Army and Goodwill have no sales tax in my state.

[tanew-768]

ebay should have lobbied harder
__

No. Voters should have lobbied harder rather than sitting back and letting it happen.

[7606dennis]

Actually, states charging sales tax have always had a use tax on goods purchased outside the state and shipped in.  It was the difficulty in getting their residents to pay this tax that was a factor resulting in them seeking the Supreme Court's ruling on whether they could require out of state sellers to collect sales tax for them if they didn't have a physical nexus in the state.  The Supreme Court decided that it was constitutional for them to pass laws to do so.  It is the state's legislators that have passed those laws.

Of course, B&M businesses which were required to collect sales tax on their sales have long felt that it was harmful to them to have to collect the tax while online and mail-order businesses did not.  They too were a factor in the court's decision and the passing of the laws by the states that have passed them or are considering passing them.

Unfortunately, the tax laws are complicated and vary from state to state so as to put an undo burden on  many small sellers.  Thus the states decided to pass laws requiring the large facilitators of these small seller's sales to collect and remit the taxes for them.  Actually, a somewhat logical way to handle the situation. 

Alas!  Many buyers who have been failing to pay their use taxes are posting here about now having to pay what they were suppose to have been paying all along.

[beez5720]

Since the Internet Tax is not exclusively for ebay transactions, that puts every single seller in every US marketplace in the same boat, which actually moots the concern that it will kill (only) ebay sales. If that was a valid concern, every seller on every platform would just close up shop because people will stop buying online if they have to pay internet tax. Do you REALLY think that's likely to happen?

And it doesn't matter the item or the condition of the item, it's still a transaction.

If they exempted "used" products, what do you think everyone is going to do to circumvent that? LoL

[ag47silver-us]

Taxation is theft. For a pension system already bankrupt through corruption. eBay didn't have a choice because the government would literally swat team raid them if they refused to become tax collectors. The government has forced all of us to work for them, for free, under threat of violent attack. So some lazy government employee can sit and do nothing useful that no one asked for that no one needs.

[7606dennis]

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@ag47silver-us wrote:
Taxation is theft. For a pension system already bankrupt through corruption. eBay didn't have a choice because the government would literally swat team raid them if they refused to become tax collectors. The government has forced all of us to work for them, for free, under threat of violent attack. So some lazy government employee can sit and do nothing useful that no one asked for that no one needs.

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An interesting  take on the governments authority to levy taxes.  I'm not sure of the constitutional accuracy of your view though.  Alas!  The government, any government, needs funds to operate.  Levying taxes is how they get those funds.  I'm not sure how they would function without that authority.

[aawmiller]

My problem i see is Ebay collects the Taxes, but Paypal reflects the payment received to include the taxes. So at the end of the year if you receive a 1099 you will have income tax on sales tax money you never touched.

Just imagine how much money Ebay is collecting and collecting the interest on prior to the tax payment made to a state.

[mam98031]

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@skipbif_72 wrote:

you didn't mention (or notice probably) that even the shipping fee is being taxed. 

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@skipbif_72 

That is because it is taxable.  

[goldrushfinds]

beez5720 - Except for the fact that this new tax is likely to motivate more potential buyers to go to brick and mortar stores vs the internet, since now the playing field is even. This undoubtedly will have some measurable impact on overall sales.

[mam98031]

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@aawmiller wrote:

My problem i see is Ebay collects the Taxes, but Paypal reflects the payment received to include the taxes. So at the end of the year if you receive a 1099 you will have income tax on sales tax money you never touched.

Just imagine how much money Ebay is collecting and collecting the interest on prior to the tax payment made to a state.

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@aawmiller 

That isn't accurate.  The sellers do not get the money nor is it reflected on your PP account in any way.  The money the seller receives is for the product and shipping you charged the buyer, period.  I think you just need to look a bit more closely at your PP account.  You will realize there is NO ISSUE for the seller in this regard.  

The ONLY time the sales tax is reflected in the PP payment you see into your account would be if YOU were still responsible for collecting sales tax in your state.  Not all states have facilitator laws yet.  Looking at your listings, it appears you are in a state that does NOT yet have a law that requires Ebay to collect sales taxes.  

So YOU ARE still responsible for collecting and remitting the sales tax for your state.

[abfabvintage]

@computeraidllc 

Hey, not to be snarky, maybe a Freudian slip? but your statement "flee market" seems like what is going on in present day here lolol. Just trying to add some humor. LOLOL.

[beez5720]

"Taxation is theft"
Only if the population is not receiving anything in return. Have you ever driven on a paved road? How about an Interstate highway? Do you have trash collection in your area? How about a public park? Do you enjoy security while you drive down those paved roads or walk down your own street? Do you enjoy the lights that instruct others to stop so you can go and vice versa? Do you enjoy the streetlight on the corner so you can walk safely in the evening in your neighborhood? Do you appreciate the police officer who arrests a serial burglar in your area?

So I am curious, do you think people just volunteered the moneys to pay for those kinds of things out of the goodness of their hearts, or that the constructors of these things donated their time and materials just so the American public would have somewhere nice to go and a safe, easy way to get there?

[computeraidllc]

I was replying to the original poster. eBay is by no means a flee market. It is big business and isn't just used but new and many other things as well. The original poster seems to think eBay is a flee market which is really isn't.

[7606dennis]

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@aawmiller wrote:

My problem i see is Ebay collects the Taxes, but Paypal reflects the payment received to include the taxes. So at the end of the year if you receive a 1099 you will have income tax on sales tax money you never touched.

Just imagine how much money Ebay is collecting and collecting the interest on prior to the tax payment made to a state.

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I would suggest keeping your own books and not depending upon eBay or PayPal to totally account for your income and expenses.  That way if the 1099 shows the income from taxes collected, you can off set it by accounting for it as being paid out.  Although, I don't believe PayPal can actually show the taxes collect by eBay as being ever in your PayPal account.  I would suggest that you contact your accountant or tax professional and discuss the matter.

[beez5720]

@goldrushfinds
"...new tax is likely to motivate more potential buyers to go to brick and mortar stores vs the internet"

B&M stores ALSO charge sales tax... in almost every state.
So do you think people are going to want to pay for the gas to drive and take time out of their day to go to the B&M store to pay the same amount of money on the product with taxes as if they ordered online? Oh, but wait, they might save little on shipping costs if they live really close to the store that has the item they need that they will (get this) STILL pay the taxes on.