Question about the new state sales tax regulations.

[nc-daydreamer]

It seems the more I read about this, the less I understand.

Can someone please help me? I can imagine a lot of folks may need this answer.

If a group of items is sold as in a lot (say 100 buttons or ribbons or whatever) or is not being stated as a lot (just a set) - how would that work with the 200 items a year threshhold for tax collection?  Would it be counted as a 1 item sale since 1 price covers the whole listing, (leaving 199 sales to go) or would it count as 100 items, leaving 100 to go? And what if say the sale would include 500 buttons?  Just count as 1, or 500?

This whole mess is so confusing.  Thanks to all in advance for a reply.

[1786davycrockett]

You have not stated in which state you currently live.  Unless your individual state has decided to charge state sales tax on internet sales, there is NO need to do ANYTHING.  The recent US Supreme Court ruling applies in particular to South Dakota, plus the other (few) states which have decided to charge sales tax on internet sales.

It is up to EACH state INDIVIDUALLY to decide whether or not to charge sales tax on internet sales, and to decide the rules for charging such a tax.  And, if your state has NOT yet changed its INDIVIDUAL state law regarding internet sales, there is NO need to do ANYTHING.

[kcdcpa]

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@nc-daydreamer wrote:

It seems the more I read about this, the less I understand.

Can someone please help me? I can imagine a lot of folks may need this answer.

If a group of items is sold as in a lot (say 100 buttons or ribbons or whatever) or is not being stated as a lot (just a set) - how would that work with the 200 items a year threshhold for tax collection?  Would it be counted as a 1 item sale since 1 price covers the whole listing, (leaving 199 sales to go) or would it count as 100 items, leaving 100 to go? And what if say the sale would include 500 buttons?  Just count as 1, or 500?

This whole mess is so confusing.  Thanks to all in advance for a reply.

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Then STOP reading about it !

When the Tax Accountants at Ebay and the Tax Attorneys at Ebay figure out WHAT has to be done, and WHO is gonna DO it, trust me there will be a formal announcement to all sellers.

This topic has been discussed ad nauseam with nothing but speculation and opinion since the Supreme Court ruling.

And the short answer to your question is:

1 auction sale of a zillion items as 1 lot = 1 sale

1 fixed price sale of a zillion items as 1 lot = 1 sale

[mam98031]

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@nc-daydreamer wrote:

It seems the more I read about this, the less I understand.

Can someone please help me? I can imagine a lot of folks may need this answer.

If a group of items is sold as in a lot (say 100 buttons or ribbons or whatever) or is not being stated as a lot (just a set) - how would that work with the 200 items a year threshhold for tax collection?  Would it be counted as a 1 item sale since 1 price covers the whole listing, (leaving 199 sales to go) or would it count as 100 items, leaving 100 to go? And what if say the sale would include 500 buttons?  Just count as 1, or 500?

This whole mess is so confusing.  Thanks to all in advance for a reply.

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It would be ONE transaction, ONE sale.  You are over thinking it.

[nowthatsjustducky]

If anything comes of it, it will be the venues that handle the matter.  There should be nothing visible on the seller's end.

If you have your own website and you manage to do 200 listings in a year to a state that claims you have to collect sales tax, and you have no presence, business or otherwise in that state; you don't have to do anything either.

They have no way to force you to comply, and the Feds certainly aren't going to enforce state laws for them.  This is all hand wringing over nothing.

What is next, U.S. sellers worrying about Australia or any other country coming after them because they are not charging VAT or whatever other taxes they demand?

[twnpopcards]

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@nc-daydreamer wrote:

It seems the more I read about this, the less I understand.

Can someone please help me? I can imagine a lot of folks may need this answer.

If a group of items is sold as in a lot (say 100 buttons or ribbons or whatever) or is not being stated as a lot (just a set) - how would that work with the 200 items a year threshhold for tax collection?  Would it be counted as a 1 item sale since 1 price covers the whole listing, (leaving 199 sales to go) or would it count as 100 items, leaving 100 to go? And what if say the sale would include 500 buttons?  Just count as 1, or 500?

This whole mess is so confusing.  Thanks to all in advance for a reply.

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@nc-daydreamer

All the Supreme Court ruling did was push this back to the state level.  So now each state has to address this issue and pass whatever laws they are going to pass and then manage to notify all those that are effected.  I truthfully believe that Congress will address the issue long before it becomes the convoluted mess that is seems to be heading for by passing some type of national sales tax law that will make things much simpler for small sellers.  The reason I believe this will happen is that this will also cause those that are running a true business online and not paying Income Taxes on it to also have to report this income on their Income Tax return which will give the politicians even more money on the national level to play with.  If not for that i am not sure they would bother addressing it, but a couple of states have already begun pushing for this by requiring Paypal to issue a 1099 for sales of $600 or more in a year so I am sure that this has caught Congress eye and if not Ebay will make sure it does so that they do not have to file Sales Tax returns with over 10,000 districts in 50 states for the millions of US sellers that they would have to do this for when the become the Payment Intermediary.  

At this point in time unless you should be collecting Sales Tax in your state of residence and are not, I would not worry about it.  Ebay and the States will make sure you are aware when the time comes as Ebay does not want to have to deal with it and the States do not want to continue losing out on the additional revenues that they need to continue paying for the assistant to the assistant of the assistant to the State Senators Assistant.  In other words they always have their hands out for more money no matter how much you give them.

[myboardid]

First, you are confusing sales tax and income tax.

You have had good answers above about sales tax, which will be handled by states individually. 

Your example about the number of sales refers to the 1099 that the payment processing companies are now required to send out (Paypal Now, eBay when they change over to Ayden).  That has to do with income tax, NOT sales tax.   It also refers to the number of payments you receive, not the number of items are paid for within that payment. 

Regarding the income tax - you owe tax on your profit, no matter how small it may be.  You are only reported if you have 200 sales and $20,000 gross income from them, but you still owe tax if you are making a profit on those sales, even if they are lower than those numbers. 

[the*dog*ate*my*tablecloth]

It doesn't matter where the OP resides. The internet use tax is based on where the buyer lives.

Regardless there's nothing to be done yet unless you sell a LOT to a State where you don't live. Most Ebay sellers will never meet the thresholds of most States.

[mam98031]

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@myboardid wrote:

First, you are confusing sales tax and income tax.

You have had good answers above about sales tax, which will be handled by states individually. 

Your example about the number of sales refers to the 1099 that the payment processing companies are now required to send out (Paypal Now, eBay when they change over to Ayden).  That has to do with income tax, NOT sales tax.   It also refers to the number of payments you receive, not the number of items are paid for within that payment. 

Regarding the income tax - you owe tax on your profit, no matter how small it may be.  You are only reported if you have 200 sales and $20,000 gross income from them, but you still owe tax if you are making a profit on those sales, even if they are lower than those numbers. 

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Some states that are requiring sales tax to be paid when we ship into their states have exceptions for small businesses.  They are not all the same but there is at least one that has the 200 sales or a certain amount of sales.  So I don't think the OP is confusing the two issues of Sales tax and Income tax.  

Certainly not a simple subject.  At this point most of us don't have to worry about it here on Ebay.  But things will change as Ebay becomes the payment processor to be sure.  But that of course is a 3+ year implementation by Ebay.  So it is not imminent.

[mam98031]

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@the*dog*ate*my*tablecloth wrote:

It doesn't matter where the OP resides. The internet use tax is based on where the buyer lives.

Regardless there's nothing to be done yet unless you sell a LOT to a State where you don't live. Most Ebay sellers will never meet the thresholds of most States.

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"Use tax"????  Did you mean Sales Tax?

[the*dog*ate*my*tablecloth]

It’s technically use tax since it is owed by the buyer according to where they live. The change is because although States have had use taxes on the books for years, most buyers never paid them voluntarily.

[mam98031]

Good point, but I think it confuses the issue as it is being called Sales tax.

[nc-daydreamer]

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@1786davycrockett wrote:

You have not stated in which state you currently live.   NC = North Carolina

Unless your individual state has decided to charge state sales tax on internet sales, there is NO need to do ANYTHING.  The recent US Supreme Court ruling applies in particular to South Dakota, plus the other (few) states which have decided to charge sales tax on internet sales. Yes, our state has passed this nonsence - but I am unsure when it starts; September I think.

It is up to EACH state INDIVIDUALLY to decide whether or not to charge sales tax on internet sales, and to decide the rules for charging such a tax.  And, if your state has NOT yet changed its INDIVIDUAL state law regarding internet sales, there is NO need to do ANYTHING.  All of this is good to  know - I thank you for the reply. 🙂

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[nc-daydreamer]

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@kcdcpa wrote:

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@nc-daydreamer wrote:

It seems the more I read about this, the less I understand.

Can someone please help me? I can imagine a lot of folks may need this answer.

If a group of items is sold as in a lot (say 100 buttons or ribbons or whatever) or is not being stated as a lot (just a set) - how would that work with the 200 items a year threshhold for tax collection?  Would it be counted as a 1 item sale since 1 price covers the whole listing, (leaving 199 sales to go) or would it count as 100 items, leaving 100 to go? And what if say the sale would include 500 buttons?  Just count as 1, or 500?

This whole mess is so confusing.  Thanks to all in advance for a reply.

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Then STOP reading about it !  I can't help it - I am a "worry-wart" - lol.

When the Tax Accountants at Ebay and the Tax Attorneys at Ebay figure out WHAT has to be done, and WHO is gonna DO it, trust me there will be a formal announcement to all sellers.  This seems logical, but with this platform - they often do a poor job of telling things in advance, then a good job of making punishments retroactive without warning.  I'm afraid my faith in logic is dwindling fast.

This topic has been discussed ad nauseam with nothing but speculation and opinion since the Supreme Court ruling.  I realize this, but I'd rather have too much input rather than not enough.  Many feel like we have targets on our backs. 

And the short answer to your question is:

1 auction sale of a zillion items as 1 lot = 1 sale

1 fixed price sale of a zillion items as 1 lot = 1 sale 

I appreciate you and your reply. I sure hope it works like this as I am preparing to venture into other categories rather than just music collectibles (records, CD's, tapes, etc.) where I mostly list now.  

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[nc-daydreamer]

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@mam98031 wrote:

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@nc-daydreamer wrote:

It seems the more I read about this, the less I understand.

Can someone please help me? I can imagine a lot of folks may need this answer.

If a group of items is sold as in a lot (say 100 buttons or ribbons or whatever) or is not being stated as a lot (just a set) - how would that work with the 200 items a year threshhold for tax collection?  Would it be counted as a 1 item sale since 1 price covers the whole listing, (leaving 199 sales to go) or would it count as 100 items, leaving 100 to go? And what if say the sale would include 500 buttons?  Just count as 1, or 500?

This whole mess is so confusing.  Thanks to all in advance for a reply.

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It would be ONE transaction, ONE sale.  You are over thinking it. You are likely correct about that.  But then again, I am a Libra and things seem to have a way of not always being fair - so I like to try and plan for the worst and hope for the best.  I thank you for your insight.  

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