jonathanbrightlight Volunteer Community Mentor
mam98031 • Volunteer Community Member • Buyer/Seller since 1999
Sales taxes in some places have a minimum threshold before a seller would have to remit them. Those thresholds had, I believe, been lowered in many of those places before the marketplace facilitator laws were passed, and probably would have continued to be lowered, but that's probably the main reason many sellers wouldn't have to remit taxes in some jurisdictions.
@simply-the-best-for-you wrote:
@pikabo-icu wrote:Yep @dhbookds Nailed it..
There are dozens of states that all charge differing amounts of sales tax.
eBay calculates & remits payment to them all, for us.
The tiny amount we pay in fees on the tax is well worth it.
@pikabo-icu Dozens of states, haha, I wish, we have something like 6000 different rates & jurisdictions just within my state. Yeah, it's one of the most complex in the US. But totally agree, WELL worth paying a tiny fee for them to manage it all!
See this is something I actually disagree on. Let me expand on that a little.
Before Ebay was our money processor, for about 18+ months, they did not charge us FVFs on sales tax. Marketplace Facilitator Laws [MFLs] started getting implemented in January of 2019. The State of Washington being the first state to pass theirs and get it implemented. As the months went on, more and more states joined the party.
During that time, Ebay gets a discount from these states for collecting, processing and remitting sales tax to the appropriate states BY THE STATES. A small discount adds up quickly at the amounts Ebay would be remitting.
Part of the SCOTUS ruling was that no undue financial burden could be placed on any business. The states could not require Ebay [or the other Marketplaces] to foot the bill to create, maintain and implement the software needed to comply with the MFLs. States had to, at the very least help to cover the costs over time.
Ebay still gets discounts for the states, so the fees they charge us beyond the Money Processing fees of about 3% is pure profit for Ebay as their costs are otherwise covered.
Then in August of 2020 Ebay decided to go to a Simplified Fee and rolled the Money Processing fee in with Selling fees. So we are NOT just paying Money processing fees on sales tax anymore, which is always what we paid when PayPal was our money processor. Now we pay selling fees on it too.
Ebay is the ONLY Marketplace that I'm aware of that does this. The other sites I sell I do not do this.
Usually the question I get when I explain this is what percentage does Ebay get from the states. To be honest IDK. The states have basic discounts they give to bigger businesses which is all that I know of made public. But even these regular discounts would be a good chunk of change.
Marketplaces likely get a better discount.
@soh.maryl wrote:Interestingly, my state, Ohio, has been collecting state sales tax for quite a few years. Am almost 92 years old. I recall state sales taxes being in place when I was quite young, maybe preschool age. There was probably an uproar about it in the beginning, have no idea. But, realistically, it takes money to operate any entity, a country, a state, a county -- where else would it be logical to collect those funds other than the citizens who use the various services and facilities of the state or county or city?
Not on Internet sales as it wasn't legal to do so. That didn't happen until the SCOTUS decision in 2018. And the first state to create and implement their MFL was the state of Washington, which started January of 2019.
@soh.maryl wrote:Am interested in your statement that there are people who "wouldn't be required to remit sales tax to most of these jurisdictions". Who are these people and why would they not be required to pay state sales tax? And, frankly, how can I get to be one of them?
Likely because there would be minimums. Just as a number lets say 10,000 of sales into a given County and/or state. Most small sellers would not meet the minimum threshold a state may require. So most small sellers would not be required to collect and remit sales tax to any state but the one they are are doing business in IF they ship to those inside the state and that state has a sales tax.
This was the original problem for states. They knew that most sellers on Ebay would not have to collect and remit sales taxes because it would be too much of a burden on them which the SCOTUS ruling prohibited. Thus the MFLs were born and they went after the Marketplaces.
@simply-the-best-for-you wrote:
@luckythewinner wrote:Has a sales tax ever been put to a vote by the citizens?
The USA is a representative democracy, not a direct democracy.
So generally speaking, the citizens vote for legislators and the legislators vote on laws.
Citizens only vote directly on ballot measures, which can be created by petition or by the legislature. I doubt many citizens groups have created ballot measures to put a sales tax on themselves.
We do. We have ballot measures over sales tax & other taxes ALL THE TIME. A few of them even pass but only if they are very, very specific on where the funds go & I mean VERY specific, like one for road improvement was down to which roads & intersections. It was shocking moving to this state b/c in all my old states, gov't just handled that, that's what we paid them for. In CO the ballots are ridiculously long with almost every question being something that lawmakers in most states determine themselves.
ETA: Interestingly, I am apparently in the same state as OP, the one with almost 6000 or so jurisdictions for sales tax. I am so happy to have eBay do it, you can't imagine. It was a nightmare doing it myself just for my own state. So much so that if I'd had the ability, I would have blocked people from my state from buying!
You are correct. It just depends of the laws of each state. Some require a vote of the people on certain things and others do not.
Just FYI. I believe it was me that posted the chart.
And here is the one for states that require sales tax on shipping.
@mam98031 wrote:
@simply-the-best-for-you wrote:
@pikabo-icu wrote:Yep @dhbookds Nailed it..
There are dozens of states that all charge differing amounts of sales tax.
eBay calculates & remits payment to them all, for us.
The tiny amount we pay in fees on the tax is well worth it.
@pikabo-icu Dozens of states, haha, I wish, we have something like 6000 different rates & jurisdictions just within my state. Yeah, it's one of the most complex in the US. But totally agree, WELL worth paying a tiny fee for them to manage it all!
See this is something I actually disagree on. Let me expand on that a little.
Before Ebay was our money processor, for about 18+ months, they did not charge us FVFs on sales tax. Marketplace Facilitator Laws [MFLs] started getting implemented in January of 2019. The State of Washington being the first state to pass theirs and get it implemented. As the months went on, more and more states joined the party.
During that time, Ebay gets a discount from these states for collecting, processing and remitting sales tax to the appropriate states BY THE STATES. A small discount adds up quickly at the amounts Ebay would be remitting.
Part of the SCOTUS ruling was that no undue financial burden could be placed on any business. The states could not require Ebay [or the other Marketplaces] to foot the bill to create, maintain and implement the software needed to comply with the MFLs. States had to, at the very least help to cover the costs over time.
Ebay still gets discounts for the states, so the fees they charge us beyond the Money Processing fees of about 3% is pure profit for Ebay as their costs are otherwise covered.
Then in August of 2020 Ebay decided to go to a Simplified Fee and rolled the Money Processing fee in with Selling fees. So we are NOT just paying Money processing fees on sales tax anymore, which is always what we paid when PayPal was our money processor. Now we pay selling fees on it too.
Ebay is the ONLY Marketplace that I'm aware of that does this. The other sites I sell I do not do this.
Usually the question I get when I explain this is what percentage does Ebay get from the states. To be honest IDK. The states have basic discounts they give to bigger businesses which is all that I know of made public. But even these regular discounts would be a good chunk of change.
Marketplaces likely get a better discount.
I wasn't aware to that level of detail as far as the SCOTUS ruling, etc. But TBH, that's way beyond the level of my interest. Anything that keeps me from having to fill out my state's forms is worth it to me. Well, I actually STILL have to fill out the form, but I get to put 0's in all of it.
