New state sales tax ruling

[vssoutlet]

A ruling has just come down from the Supreme Court that states are entitled to collect sales tax on internet sales. Amazon already collects and remits on behalf of it’s 3rd party vendors. For small sellers, collecting and remitting to potentially thousands of municipalities would be impossible. Since eBay is trying to be like amazon in most other respects, will they provide a collection and remittance solution to keep its sellers in business?

[vssoutlet]

The stuff I’ve read is about gross sales. Let’s say you’re in the precious metals business. One million in gross sales might translate to $20,000 in actual income. Sales aren’t a very useful figure. They don’t reflect what a business keeps. One of the states behind the surpreme court suit proposed a rule that said if a business sells over 100,000 dollars OR 200 items into their state, that business is liable for collecting and remitting sales tax. 200 items, really? If I sell t shirts at $10 a piece, I should be taking on another tax jurisdiction? If so, I want eBay to allow sellers to exclude certain states from buying from us. Unfortunately, that punishes the buyers in that state, as well as sellers. I would define a small business as at least $5,000,000 in net PROFIT and exclude them from collecting sales tax outside of states in which they have a nexus.

[somanypostcards]

I took a few hours yesterday to do a rough estimate of my transactions by state in  2018.  I already have 200 transactions in California, about 75 in New York, and 50 in North Carolina and Florida.  I'm a micro-business, a sole proprietor with no employees.  It looks like I can live with this threshold for a while, though 200 transactions is obviously a very low bar.  I've never done the math on my average transaction amount, but I'd be surprised if it's over $4 or $5, meaning $800-$1000 in sales in 12 months within a state having this threshold would require me to collect sales taxes.  What can really trip a seller up is if they do not collect sales tax but fail to comply with a state's remote seller notice and reporting laws.  Ten days ago I didn't even know these existed, and the penalties are exorbitant, much higher than penalties imposed by failing to collect sales taxes.

[my_special_tea]

I pretty much agree with you. I trade bitcoin and sell on eBay. Both of those are 200 sales or trades, and $20,000. So my best guess would be that is possibly where they will draw the line again.

[my_special_tea]

I live in Montana so at this point we have no sales tax, however it does not mean that I would not have to collect and pay the sales tax that another state requires.

[my_special_tea]

You really think you will sort it out in April! You have to be out of your mind. Some states require monthly payments, others quarterly, while othes have to pay only 1 time per year. Its really not let me collect and I will pay it in the end.

[the*dog*ate*my*tablecloth]

It’s only 200 and 20k before they have to send you a 1099. You still have to file taxes even below that level. 

[p7050]

Just doing some checking on the sales tax info and have been checking on some states and most of them say you have to 10,000 or 200 transactions in sales to pay pay sales tax because you don’t have a nexus that state I live in KY so I don’t have to collect tax until I meet the above amount the previous year. Here is something I read on some of the states for the 2019 budget they say if you have a web site and people click on it to buy items from your site in the state you will have nexus in that state so that means you would have to collect tax no matter what. So time to decide what I am going to do. Might just sell my items at my local flea market and pay to my state which I do anyway.

[the*dog*ate*my*tablecloth]

The cookie nexus rule has been challenged in MA so I’m not sure how any of this is going to work out. I use Shopify for my website so I’m not sure if they will trigger the facilitator rule.

[p7050]

How do you like Shopify I just started using it also just started using amazon no sales yet will do more on it this week eBay has been kind of slow

[p7050]

I don’t make about 5 or 6 thousand a year so might not have to worry about any of it just my state which I do pay

[buyselljack2016]

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@nowthatsjustducky wrote:

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the*dog*ate*my*tablecloth wrote:

Many of them are freaking out because they think they will be responsible to collect but that’s doubtful. 

I do do think it will affect sales since buyers are not bottomless money pits

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One thing I can see this being a big boon for is those who also sell from their own web sites.  If I were to do that here in Oregon, and then I started getting direct sales from buyers in those states, I would be fully within my rights to refuse to comply with their demands.  And they have no way to enforce such demands either.

I will never charge anyone sales tax ever.  I have no business presence in any other state, and have no obligation to pay any other state's laws any tribute or respect other than Oregon.  So yeah, this will be a huge boon to those of us who may sell directly from states with no sales tax.  I could definitely forsee many shoppers in states like WA and PA specifically seeking out individual web sites as their first go to for whatever they are looking for, before even considering any of the big online venues.

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Maybe I am all confused with all the reading of different threads about this, but didn't the Supreme Court ruling just change that?

Isn't this what it is all about? Giving each state the right to, if they so desire, to collect interstate sales taxes.

[djkmoran]

Worth reading especially as to software, audits and litigation: 

BRIEF OF AMICI CURIAE eBAY INC., ET AL

https://www.supremecourt.gov/DocketPDF/17/17-494/42340/20180404142927649_17.494.bsac.eBay.pdf

[the*dog*ate*my*tablecloth]

Shopify is great especially if you sell in a niche. I have the largest selection and have sat at the top of google for nearly two decades. That’s without any paid promotion like AdWords.

You can use your website to hold items for sale and run listings on eBay. Once you sell here you can include your website information in the order. I wouldn’t list items in both places at once though.

if you run a general purpose site it is very hard to gain a following so I would continue using eBay as well.

[dccandy]

Here is where Minnesota stands on it right now and it sounds like they expect you (Ebay) to start remitting sales tax Oct. 1st.  Please advise.  Thank you.

p.s.  I alread collect and remit sales tax for Minnesota but according to this they would expect Ebay to start doing so.

http://www.revenue.state.mn.us/businesses/sut/Pages/Marketplace-Providers.aspx

[somanypcs]

I don't believe eBay has to collect the Minnesota sales tax according to info in the link you provided:

"A Marketplace Provider must collect and remit Minnesota sales tax on all taxable sales into Minnesota made by a remote seller through the marketplace unless any of the following are true:

• The remote seller makes taxable retail sales into Minnesota through the marketplace of less than $10,000 in a 12-month period ending on the most recently completed calendar quarter.
• The remote seller elects to register and collect Minnesota sales tax directly and does not enter into an agreement with the Marketplace Provider for the marketplace to collect and remit Minnesota sales tax on behalf of the remote seller.
• The Marketplace Provider does not maintain a place of business in Minnesota."

Note the 3rd bullet.  Since eBay does not maintain a place of business in Minnesota they do not have to collect and remit the sales tax for their sellers.