New Sales Tax will be a BIG issue...........

[activemerchandie]

for me atleast.  Folks that say this won't be a big issue and everyone is making a big deal out of nothing I think they're wrong.    I'm not a huge seller, but I sell enough to know that it WILL be an issue for me, since over the years I bought a lot of items on Ebay to resell for a small profit.   If this goes into effect, an item from out of state that would currently cost me $100, but after this passes it will be anywhere from $113.00 to $103.00 with an average around $107.   I know this doesn't sound like much, but after paying Ebay their 10% and Paypal 3.5% the profit margins are low and now I will have to tack on another variable tax rate amount to my products cost.

Also, I know that if this passes I won't be buying as many items, since my wages haven't increased and this will just be another amount that will be taken away from my discretionary income.  I think this will hurt online sales to what extent I don't know.

Anyways, I hope it turns out for the best, but I don't think it will and most small sellers will be the ones hurt the most.  This is about helping the multiple billionare type companies while causing the small mom and pop online sellers to close up shop.

[emerald40]

I do purchase some high end jewelry.  And yes, it will make me think twice at what I puurchase to budget in that additional sales tax.

[oceanviewengineer2015]

Well, many online buyers will absorb the shipping or a slightly higher cost (hidden shipping fee) for the trade off of no tax.

They simply won’t do that now unless it is a necessity. 

They will drive the ten minutes to B&M and buy what they can touch and feel for less and not have to deal with the return shipping if there is an issue.

[gew6463]

I'm glad you started a new thread, because the last one is so long & convoluted that my head is spinning (what it means, and what it doesn't mean).  I am just trying to figure out whether the amount mentioned as $100,000 or 200 sales is for each state or as a whole (as in 200 items sold in a single state OR 200 items sold all states total). Would you believe reading the tax law itself did not clarify it for me one bit? 

I too buy to resell. So that would make a big difference in the bottom line. I am hoping the 'powers that be' at Ebay will clarify soon what this could/does mean. It could get very confusing with all the different tax codes. More work than it will probably be worth.

[waterbed_bigfoot]

@gew6463

This is what I know so far after reading about this today.  

South Dakota $100,000 or 200 sales

Colorado 

How do these laws work? Unfortunately, the mechanics vary by state. Colorado in particular has one of the more robust notice and reporting laws. Beginning July 1, 2017, remote sellers that have over $100,000 of sales to Colorado customers and do not collect sales tax must:

1. Notify their Colorado customers of the customers’ obligation to pay Colorado use tax. This notice must be provided to each customer at the time of purchase (typically on the invoice) and must contain specific language. There is a $5 penalty per transaction where notice was not given with a maximum annual penalty of $25,000.
2. Beginning January 31, 2018, remote sellers that do not collect sales tax must provide an annual summary by January 31 each year of spending to Colorado customers that spend more than $500 with the retailer. There is a penalty of $10 per failure to give this notice with a maximum annual penalty of $50,000.
3. Beginning March 1, 2018, if a seller has more than $100,000 of gross annual sales in Colorado, the remote retailer must provide the Colorado Department of Revenue (CDR) with a report that includes the customer’s name, address, and total purchases by March 1 each year. If the noncollecting retailer fails to provide the proper notice, it will be penalized $10 times the number of Colorado purchasers that should have been included in the report with a maximum annual penalty of $50,000. 1

Based on these provisions, companies could pay up to $125,000 in penalties in a single year even though they have no physical presence in Colorado.

Pennsylvania  A remote seller that makes taxable sales totaling $10,000 or more to Pennsylvania customers in the previous calendar year must elect one of two options by March 1, 2018:

Collect sales tax or comply with use tax reporting this one is similar to Colorado;

1. Post a notice on the sales forum that states:

Pennsylvania sales or use tax may be due in connection with the purchase and delivery of tangible personal property to Pennsylvania individuals and businesses.

The purchaser is required to file a use tax return if tax is due in connection with the purchase and delivery in the Commonwealth.

This notice is required pursuant to the provisions of the Tax Reform Code of 1971. 72 P.S. § 7213.2.

1. Provide a written notice on all invoices, order forms, sales receipts or similar documents, whether in paper or electronic form, to each purchaser at the time of each sale that states:

Pennsylvania sales tax was not collected on this sale. Therefore, you may be required to remit use tax directly to the Commonwealth on your purchase if the items are subject to Pennsylvania sales tax. Please visit this link to learn more about your use tax obligations under Pennsylvania law.

No statement that sales or use tax is not imposed on a transaction may be made by a remote seller, unless the transaction is exempt from sales and use tax, pursuant to Article II of the Tax Reform Code or other applicable Commonwealth law.

1. Provide an annual report to the purchaser that states:

A remote seller making an election to comply with the notice and reporting requirements must submit an annual report by January 31 of each year to the purchaser that includes the following.

[Name of remote seller] did not collect sales tax in connection with your transactions. You may be required to remit use tax to the Pennsylvania Department of Revenue. Following is a list by date, type and purchase price of each product, purchased or leased by the purchaser from this remoter seller, and delivered to a location within this Commonwealth.

[Insert list]

Please visit to learn more about your use tax obligations under Pennsylvania law.

[Name of remote seller] is required to submit an annual report to the Department of Revenue that includes the name of the purchaser and total dollar amount of the purchases from this remote seller.

This report shall be mailed by first class mail, in an envelope prominently marked with words indicating that important tax information is enclosed, to the purchaser’s billing address, if known, or if unknown, to the purchaser’s shipping address. If the purchaser’s billing and shipping address are unknown, the report shall be sent electronically to the purchaser’s last known email address with a subject heading indicating that important tax information is being provided.

1. Provide an annual report to the Pennsylvania Department of Revenue

A remote seller making an election to comply with the notice and reporting requirements must submit an annual report by January 31 of each year to the Department of Revenue that includes the following:

• The purchaser’s name, billing address, delivery address and, if different, the purchaser’s last known mailing address.
• The total dollar amount of purchases from this remote seller.

A report required under this section shall be submitted by an officer of the remote seller and shall include a statement made under penalty of perjury by the officer that the remote seller made reasonable efforts to comply with the notice and reporting requirements of this part.

Each failure to comply with the notice and reporting requirements can result in a penalty of $20,000 per violation, per year, or 20 percent of total Pennsylvania sales during the previous 12 months, whichever is less.

Kentucky

Non-collecting retailers (i.e. retailers with no sales tax nexus in Kentucky who have more than $100,000 in gross sales in Kentucky are required to either register for a Kentucky Sales tax license and begin collecting sales tax, or inform buyers that they have the obligation to pay Kentucky use tax

Louisiana

Non-collecting retailers (i.e. retailers with no sales tax Nexus in Louisiana who gross $50,000 or more per year in sales to Louisiana buyers are required to either register for a Sales Tax Permit and begin collecting sales tax, or comply with Louisiana’s notice and report law.

[waterbed_bigfoot]

@gew6463

And here are some more

Oklahoma

All non-collecting retailers (i.e. sellers with no sales tax nexus in Oklahoma, who make more than $10,000 in aggregate sales in Oklahoma in the previous 12 calendar months, are required to either register for an Oklahoma Sales tax permit and begin collecting Oklahoma sales tax, or, under H.B. 1019, to do the following:

• post a conspicuous tax notice on their websites/forums. The notice should state that sales or use tax may be due pursuant to 68 O.S. §1393 and that the Oklahoma purchaser is required to file a return if tax is due
• provide a written notice to each purchaser at the time of sale stating that sales or use tax is not being collected, that the purchaser may be required to remit sales or use tax directly to the Oklahoma Tax Commission. The notice should also give instructions on how to obtain more information about this from the Oklahoma Tax Commission
• provide a written report to purchasers every year by January 31 telling them they are required to pay use tax on purchases made in the preceding calendar year. The Oklahoma Tax Commission will provide forms for this document.
• provide a written report to the Oklahoma Tax Commission every year reporting on the activities of sellers who did not pay sales tax and thus are required to pay use tax. The Oklahoma Tax Commission will provide forms for this document.

Penalties:

Penalties for sellers who do not comply are: 

• $20,000
• 20% of total Oklahoma sales in the previous 12 months

The penalty is assessed separately for each violation but can only be assessed once per calendar year. For five years after this penalty provision takes effect, the OTC can abate or reduce the penalty or interest due to hardship or good cause.

This law went into effect in April 2018. 

Rhode Island

Non-collecting retailers (i.e. retailers with no Rhode Island Sales tax nexus who make more than $100,000 in Rhode Island sales or more than 200 transactions to buyers in Rhode Island are required to either register to collect Rhode Island Sales Tax or comply with Rhode Island’s notice and report requirements.  

To summarize:

If the non-collecting retailer elects to not to register and choose to comply with notice and report requirements, they must:

• Post the Website Notice on your website
• Notify the customer at the time of purchase (Checkout Notice);
• Notify the customer within 48 hours of purchase (48-Hour Notice);
• Send customer with $100+ in annual purchases the Annual Notice by January 31st; and
• Provide by February 15th each year the Annual Attestation that the notice requirements were fulfilled.

Tennessee

According to a 2012 law, non-collecting retailers (i.e. retailers with no sales tax Nexus in Tennessee  are required to inform buyers that they may owe Tennessee use tax. However, there is no penalty for non-compliance.

This law went into effect March 26, 2012.

Vermont

Non-collecting vendors in Vermont (i.e. vendors with no sales tax nexus in Vermont are required to either register for a Vermont Sales Tax license., or comply with Vermont’s use tax notice and report law. Vendors who made more than $100,000 in retail sales in Vermont have more notice and report responsibilities. 

[waterbed_bigfoot]

@gew6463

and the rest of Vermont and Washington;

The following are Vermont’s requirements:

• All non-collecting vendors –  Provide a transactional notice with every Vermont reportable purchase not exempt from sales and use tax.
• Every non-collecting vendor for every Vermont purchaser who made $500.00 or more in total purchases in the previous calendar year – Send notification to all Vermont purchasers with $500.00 or more total, showing the total amount paid by the purchaser for Vermont purchases made in the previous calendar year.
• Non-collecting vendors who made $100,000.00 or more in sales into Vermont in the previous year – Transmit an annual customer information report to the Department of Taxes on or before January 31 of each year for every purchaser required to receive an annual purchase summary.

Penalties:

• The penalty for a failure to provide a transactional notice for a Vermont purchase is $5.00 for each such failure, unless the non-collecting vendor shows reasonable cause for the failure.
• The penalty for a failure to send the annual purchase summary is $10.00 for each such failure, unless the noncollecting vendor shows reasonable cause for the failure.
• The penalty for a failure to transmit an annual customer information report to the Vermont Department of Taxes is $10.00 for each failure, unless the non-collecting vendor shows reasonable cause for the failure.

.Washington

Starting January 1, 2018 non-collecting retailers (i.e. sellers with no sales tax nexus in Washington are required to either register to collect Washington sales tax or comply with Washington’s notice and report law.

In summary:

Non-collecting retailers who choose not to register for a Washington sales tax permit are required to do the following:

• Platform notice – post a conspicuous notice on the marketplace (website, platform, catalog, etc.) that informs Washington purchasers that use tax is due
• Invoice/receipt notice – send the buyer a notice at the time of sale reminding them of use tax obligations
• Annual report to purchasers – Seller must provide buyers with information about their purchases and use tax obligations by February 28 of the following year. This includes once again a statement that use tax is due, and information for the buyer on how to submit use tax to the state.
• Annual report to the Washington Department of Revenue – The seller must also send an annual report to the Washington Department of Revenue by February 28 of each year including the purchaser’s name, billing address and mailing address, the shipping address for products sold and the total dollar amount of all purchases by the purchaser.

A sample “Annual Report to Purchasers” from the Washington Department of Revenue website

You can read specific Use Tax Notice and Report Requirements for Washington here.

Penalties:

The state may assess a penalty of up to $20,000 that fails to provide notice to consumers. (The Washington DOR website does not make this penalty clear, so you can read the full Washington notice and report law here.)

You can read more about Washington’s notice and reporting requirements for online sellers here.

This law went into effect January 1, 2018.

This law went into effect July 1, 2017.

[gew6463]

Thank you so much; this is a big help. I already collect for Washington residents (since I live here), but have never even thought of having to collect for any others. This clarifies some details at least. Thanks again.

[waterbed_bigfoot]

@gew6463you are welcome this is going to get bigger than us.  Most of it so far won't apply to small sellers the one I'm most worried about so far is Washington.  I use Tax Jar to look up things and hopefully they will have more soon.  Some are hoping and I am too that small sellers will be exempted from this.  We shall see.

[pjcdn2005]

It’s possible that sellers may not have to deal with this and that eBay will collect..or..that small sellers won’t be required to collect..or there will be some standardization between states.....  There are lots of possibilities so I wouldn’t get too bogged down on the details at this point.  

Ebay has commented on the news in a number of threads on this board. See post 12 in the following thread.

https://community.ebay.com/t5/Selling/Now-we-pay-Paypal-fees-on-the-sales-tax-portion/m-p/28636138#M...

[carlmarxx]

---

@waterbed_bigfoot wrote:

@gew6463you are welcome this is going to get bigger than us.  Most of it so far won't apply to small sellers the one I'm most worried about so far is Washington.  I use Tax Jar to look up things and hopefully they will have more soon.  Some are hoping and I am too that small sellers will be exempted from this.  We shall see.

---

Just watch and see Ebay will  drop their  control market  plateform  And Claim just A Venue  !  They may do same as etsy .  But will not spend  money  to do same As Amazon.

[pingpong517]

seems to me....that you pay sales tax if you go to a store, right?...so why wouldn't you on line?...

and for those who shop on-line....they like the easy click and shipped to the door aspect..sales tax or not...right?   and yes , you could look then drive over to the store...and pay the sales tax...ummm...so what is really the difference to shoppers.... we shop online because it is easy and don't have to deal with driving, other people, etc.... sales tax....that part of life.

for sellers....the gravy train is ending...saw it coming, expected it to come , seems fair enough....and BTW...a buyer is suppose to claim it on their state income tax form(purchases out of state) __of corse not all states and there are many different rules...BUT just saying, did you not expect this?

The whole notion that it's putting mom and pop stores , etc out of business or making it tougher...well progress, and the internet started all that long ago....don't remember a grocery store poping up ..and everyone saying there goes the little stores?...and milk isn't delivered to the door anymore....well unless you shop on lone with a grocery store, and have it brought to you....full circle progress.

amazone has been collecting state taxes on many (think i heard 70%) of items over the years....so it can be done...and i also heard for small sellers...they may not have to--- there will be some sort of criteria for number or $ sales....like paypal and the 1099 form...you have to meet the requirement to have it done...otherwise you're on YOUR honor ...and claiming YOUR sales on tax form...

we will all survive, we adapt and change or die off....as it is in business and nature. 

[necessaryindulgencejewelry]

It has always been the customers' responsibility to pay use tax in their own state when they purchase merchandise from another state. The problem is that the state governments consider it too burdensome for them to go after tax dodgers, poor babies, so now we have to do it. 

Big retailers have enormous bookkeeping and law departments to keep up with the tens of thousands of tax jurisdictions in this country, which small sellers do not. Not only do states have different sales tax structures and rates, but so do individual counties and individual towns within each state, and any of them can change without notice. My state has the various sales tax rates posted, but they have a disclaimer that every rate can change at any time, and if it does and you get it wrong when you send in the money, YOU are going to be punished for it, and they don't have to bear any of the responsibility. Now imagine that for 45 different states. If you really like the thought of getting audited by 45 different state internal revenue departments, then you're a lot different from most of us.

[tarbucky]

Colorado's new law going in to effect on December 1, 2018, is so scary I'm turning Colorado off on my website and I don't know what we'll do with ebay and Amazon.  We have to charge tax according to where the package is delivered.  That is hundreds of jurisdictions.  Plus, many are called home rule cities or towns, so each of those require a separate tax filing.  and I'M IN COLORADO!  What will we do??? Definitely turn Colorado off on the website.  Maybe Hire TaxJar for the other two?  Have you seen any more info on this anywhere?  I can find nothing.  I could care less about people buying on ebay for resale on Amazon and losing three dollars.  I am a legitimate business who will lose sales and besides that, how do you charge tax after the fact, file hundreds of forms every month (NO WAY).  Would love some insight from other people.

[the*dog*ate*my*tablecloth]

Do you sell over $100K to Colorado a year? I'm thinking if you do it would be worth hiring an outside company to collect tax for you. Are you selling using software like Shopify? They may be required to collect in some States as Marketplace Facilitators.