Sales Tax Collection Now Applies Across the Nation

[rustyrail]

Now that the Unites States Supreme Court allows all states to collect sales tax on all online sales by a 5 to 4 vote, how are we as small businesses going to be able to stay in business. It will be impossible for me as a small business to process sales tax payment for every entity in every state in the United States.

Only large corporations with huge resources will be able to comply with this ruling.

Question -

Would it be possible for eBay to collect and process the sales tax from all of our sales?

Any thoughts or Suggestions ????

[homegoodsforyou1]

I may be wrong but I believe unless you have warehouses in those various states the ruling does not apply.  In other words, small etailers who just sell on Ebay, etc. will not have to collect these taxes.

I read this in an article earlier this morning but I think we just need to wait and see how this plays out but I think we will be ok.

Here is the article I read;

http://www.kusi.com/u-s-supreme-court-says-online-shoppers-can-be-forced-to-pay-sales-tax/

Sellers who use eBay and Etsy, which provide platforms for smaller sellers, also aren’t required to collect sales tax nationwide.

[rustyrail]

Thanks for the reply and the link. I hope that your assumptions will prove to be true.

[homegoodsforyou1]

Yeah, I know but I think we really need to read the actual decision to see how this ruling ultimately applies to us.   Even with the ruling though, Congress will ultimately have to step in to protect small etailers because as you said, there is no way a small business can possibly comply with this. 

[rustyrail]

You are SPOT ON in my opinion.

Hopefully, this action by the SCOTUS will get the attention of ever eBay seller!!!!

Our businesses as online sellers are at RISK.

[homegoodsforyou1]

Just found another link that seems to differ in what I was thinking however it still seems the central theme from what I am reading is Congress will have to act to protect small online retailers.  The last thing these politicians would want in an election year is to have a bunch of small etailers closing their doors.

https://www.wsj.com/articles/us-supreme-court-rules-states-can-require-online-merchants-to-collect-s...

[tsme35]

I hope this doesn't happen, not only will it kill my business it will kill me. I'm disable and can't work a 9-5 job, yes I could go on SSI but its not enough to pay house payment, so I'd be homeless. 

 At first it was suppose to be for companies making over 500K but the articles I've been reading says this is gonna wipe out the small sellers so I don't know what to think, stocks are dropping like rocks for ecomerce companies today. I can bearly keep up with the junk ebay throws at us every quarter, there's no way I could collect taxes for 9600 enities. Its already started in my county, this fall their putting internet sales tax on the ballot for my city and county, so I'll have to collect taxes and thats for 3 disticts, city, county and state.

[junkjungle]

AFAIK the only state that this applies to TODAY is South Dakota.  SD was the plaintiff in this case and they won.  Since they already had the law on the books it goes into effect with today's ruling.  I believe the SD law only applies to sales of $100K or more.  Of course it won't be long before other states pass laws to collect tax on out of state purchases and their minimums if they have any at all will probably vary widely.  In states like Illinois who are broke I wouldn't be surprised if they will want tax collected on all sales.  I once went to a radio club swapmeet and a taxman was present harassing people selling stuff out of their trunk.  In Illinois consumers are supposed to report all out of state purchases and include the unpaid sales tax on their annual income tax report.  Of course nobody does and up untill now there has been no way the state could enforce it.  This ruling changes all that.  It's not a good thing for small "garage sale" type sellers.  If ebay collects the tax they will have to raise fees to pay for the administration.  It will also open pandora's box as many state's will now expect you to pay income tax on your profits and register as a business.  To have any personal liability protection you will need to register as an LLC.  Last time I checked, Illinois charges $650 min for an LLC registration.

[nancysjewelsandsupplies]

I sell on both eBay and Etsy and have been following this closely for a few years to see how it was going to affect me as a seller.

Etsy has been collecting and processing the sales tax they collect on my sales to Missouri, Pennsylvania and Washington. They do charge a fee for this but I think that it's worth it so I don't have to hassle with it all. I've heard nothing from eBay on how this will play out with them. 

I am mainly wondering if a seller's gross sales will determine if we have to collect and remit sales tax to each state, or will all sellers, regardless of their amount of sales have to deal with this new ruling. 

[allkindagoods]

This will definitely change things. No mystery here. If every eBay seller is forced to collect sales tax on all transactions and remit to the proper authorities, eBay will have to come up with the correct program, and they will have to "cut the checks".



And they will charge a fee to do so, you can bet on this. In this respect, eBay / PayPal will profit from this ruling. If, say, a 3% service charge is collected, on a $100 sale at 8% sales tax, this would be 24 cents.



Is this a great deal of money? Doesn't seem like it. But if one takes into account the BILLIONS of dollars in eBay sales which will be now subject to taxation, it is a large sum. And when an item is returned, the buyer will receive a full refund (including all of the sales tax they paid out when making the original purchase). So eBay will collect the fee twice when the returned item is resold. They will need these funds to hire more employees to run the taxation and remittance programs.



The big losers here are the many dropshippers (both US and International) who collect taxes on their own and pocket the money. One cannot think they are actually making good money strictly by just being basically payment intermediaries. Some are even collecting up to 10% of the purchase price! Soon they will not be able to profit from this "taxation without representation".



And when the many duplicate dropship listings begin to disppear from eBay, the unique items which this site is known for (and cannot, for the most part, be found on any other ECommerce website) will be featured more readily. This may not be as bad for small sellers as many believe.

[rrtunnel]

Are COLLECTIBLES sold on Etsy???

[stuff4divas]

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@rustyrail wrote:

Now that the Unites States Supreme Court allows all states to collect sales tax on all online sales by a 5 to 4 vote, how are we as small businesses going to be able to stay in business. It will be impossible for me as a small business to process sales tax payment for every entity in every state in the United States.

Only large corporations with huge resources will be able to comply with this ruling.

Question -

Would it be possible for eBay to collect and process the sales tax from all of our sales?

Any thoughts or Suggestions ???? 

---

But sellers that only have a physical presence in a single state or a few states could avoid charging customers sales tax when they’re shipping to addresses outside those states  ...  Sellers who use eBay and Etsy, which provide platforms for smaller sellers, also aren’t required to collect sales tax nationwide.

[nky-photos]

I already collect sales tax for Kentucky. They get maybe a $2-$3 or less per quarter. It is a small state.

As a precautionary measure I update my sales tax table on ebay to start collecting sales tax for all 50 states. Whether I pass it on is a different matter which is where ebay needs to step up to the plate.

To my knowledge there are about 16,000 various sales tax entities in the USA besides the 50 states and I can see them all wanting their hand in the pie. It is not feasible for me to administer them. I pride myself on being a One Man Army but this is beyond my capabilities.

I wonder what ebay's plan B is.

[dirk12955]

I wonder how this would affect cities like Chicago and New York that I believe already collect a local sales tax in addition to collecting Illinois and New York state sales tax.

[amp-video-games]

Honestly this is going to be a "wait and see" issue and most likely ebay and other sites will implement there own way to collect these taxes. Honestly im not surprised this went through and dont think it will be as bad as most people think, again we need to wait and see how this all plays out before we start claiming internet armageddon.