Resell and sales taxes

[ewitte]

This seems overly complicated.  Looking for advice on sales tax.  Up until now I've been mostly selling used personal items but I'm working on switching to resell.  With the new changes to Ebay it seems they started taking out taxes for most everything I sell.  I now have a TX certificate but it appears suppliers are wanting to charge tax on everything that isn't going to TX.  So with ebay's new policies unless I go through and get a certificate for every state everything is going to be double taxed and it becomes difficult to find items that are still profitable.  I'm then wondering if I need to file the quarterly report for EVERY state like TX is asking me to do?

[dtexley3]

eBay automatically charges the BUYER sales tax for the states where Marketplace Facilitator (MF) laws have been passed.  Sales Tax is based on the buyer's location, not you, the seller.  You do nothing in those cases.  If TX is already managed by eBay then you don't have to do anything for your sales to buyers in TX either.

Your purchases are another matter.  The TX certificate allows you to be exempt from sales tax on items you buy for resale.  If you are drop shipping, then you will need to work with the suppliers to notify them that your purchases are exempt from TX sales tax.

[luckythewinner]

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@ewitte wrote:

I'm then wondering if I need to file the quarterly report for EVERY state like TX is asking me to do?

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No, you do not have to file in all the other states. 

For states that have a facilitator law, eBay assesses the tax and the remits the tax and you do not have to file in that state. You don't have to do anything other than remember to deduct the sales tax that paypal gave back to eBay from your 1099, if you get one. 

For states without a facilitator law, most of them have a pretty high threshold that you must exceed before you are required to collect and remit tax. 

[nobody*s_perfect]

Sale tax is based on the location of the buyer. You don't need to get certificate for other states.  eBay collects and submits the sales taxes for buyers in the 38 (or so) states that have "marketplace facilitator" laws.

https://www.ebay.com/help/selling/fees-credits-invoices/taxes-import-charges?id=4121
 
https://community.ebay.com/t5/Announcements/UPDATE-Ongoing-Changes-in-How-Internet-Sales-Tax-May-Imp...
 

[ewitte]

Yes I understand ebay charging the buyer but if the buyer isn't in TX it appears I also get charged on top of that.

[pburn]

Can you post a screenshot of exactly what you mean?

As a seller, you shouldn't be charged sales tax on any of your sales transactions, no matter where the buyer is.

[lacemaker3]

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@ewitte wrote:

... Ebay it seems they started taking out taxes for most everything I sell.  ...

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Yes, eBay is legally required to collect sales tax for all taxable sales that are being delivered to a shipping address in a state with sales tax.

... I now have a TX certificate but it appears suppliers are wanting to charge tax on everything that isn't going to TX.  ...

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You should not need a TX certificate, unless you are also making other sales to buyers in Texas, which are not through eBay or another marketplace facilitator. Nor should you have to pay sales tax on anything that is being sold through eBay.

So the question for you is: why are you being charged sales tax by your "suppliers"? 

If you are purchasing things from "suppliers" to be shipped to your eBay buyers, they should not be charging sales tax. eBay is responsible for that.

If your "suppliers" are doing that, then you don't have the right relationship with your "suppliers". You are not allowed to use drop-shipping to fulfill eBay sales, unless you have a contract in place with the drop-shipper. If you have a correct and appropriate contract, then your suppliers should not be collecting sales tax. If they are, then you are violating eBay's drop-shipping policy.