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 ????

[backyard_finds]

Since the Supreme Court did Overturn Quill , Meaning a seller does not have to have presence in a state they sell to they will be responsible for collecting taxes via whatever state the seller sold to.

I did pull all listings this morning after much thought and listening & reading many news reviews / reports. I think there are just so many unknowns and I don’t want to get a letter from a state in the mail saying I owe them bo-cu back bucks. While listening to many news outlets a Fox news Neil Cavoto got my attention when he stated “that supreme court decision yesterday which argued that no matter where you sell you better make sure your paying state taxes on what your selling”

–- I found Tax jar as a way to collect and file quarterly, however one still has to register with all the states as a foreign business (which is basically a business license for each state) of which all states have different fees for that of which is a yearly cost also. 

Please note also that acording to CNBC Amazon was ordered via Court Order to turn over 3rd party information.

Quote:

• Amazon has agreed to hand over data about sellers doing business on its site to Massachusetts state officials to help identify uncollected sales taxes.
• Amazon initially refused to share the data back in September, which had led to a court order forcing Amazon to turn it over by mid-October.
• The move is expected to lead other states to file similar requests.

Article Link Here -   https://www.cnbc.com/2018/01/23/amazon-will-turn-over-third-party-seller-tax-data-to-massachusetts.h...

Another article that goes into more informational detail is Sales Tax Support.  The article talks abit about Amazon being forced to give seller information and also Pennsylvania and Washington State.

Article Link Here --  https://www.salestaxsupport.com/blogs/issues/sales-tax-basics/amazon-turns-over-third-party-seller-t...

Some I know are taking that the South Dakota way as a standard rule, I think this is something that could get them in trouble later. 

There are other states such as Tennessee who from the last I knew wanted to retro the taxes owed – and then Washington State has a confusing one as well, and on and on.  Some articles and news outlets are also stating that many states where just waiting and are ready to implement the requirement. 

Even if Ebay collected the tax for a seller, the seller would still have to remit it and therefore be registered in the corresponding states to do so of which means that the seller would have to have paid for the Foreign License (Business License) of whatever state they sold to.

Bottom line from what I have found out is a seller no matter how small at this point will have to fork out some dough just to sell small profit items, I was selling clothing and odds and ends.  I need and used the little bit of income to help suppliment my income.  I think Congress needs to step in and put some clarity to this – I called my congressman this morning – in the mean time I am at an all stop.

[rustyrail]

Backyard_finds,

Thank you for sharing your research and thoughts. Both are helpful.

I'm waiting to see how eBay responds, before I shut down my out of state sales.

Since I am a registed business in Texas, I will attempt to continue to sell in Texas.

I'm sure that this will significantly reduce my sales, unless, I can sell more Texas

related items.

Another thought is to analize my previous sales and then pick a handful of states

to sell in.

Additionally, I expect that many of my online sources for merchandise will dry up.

So, it may be necessary to deal with them directly rather than our traditional way.

Again, Thank you for sharing your thoughts

[fine_find]

Yes. You can sell just about anything you sell here on Etsy.

[fine_find]

My thoughts on the subject would be to simplify the tax collection. When you purchase from a seller in any state, you pay taxes at that point. Such as being on vacation. You do not pay taxes on where you're from but rather to the state you are purchasing in. No one chases you down and asks where are you from before they give you the total. You simply pay it and go on about your business. This really does make more sense than the way they are wanting to do it. I am not required to tell my state everything I bought while I was out of state. However, I do pay my taxes every time I make a purchase here.

So, the best way would be that every seller would collect taxes for the state they are selling from. No one would have to figure out every states' tax rates and every one would be happy.

Now before you all start bombarding me with "that's not how it's done." Please note that I do know this, but was putting my thoughts in per the OP suggestion. 🙂

[backyard_finds]

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@rustyrail wrote:

Backyard_finds,

Thank you for sharing your research and thoughts. Both are helpful.

I'm waiting to see how eBay responds, before I shut down my out of state sales.

Since I am a registed business in Texas, I will attempt to continue to sell in Texas.

I'm sure that this will significantly reduce my sales, unless, I can sell more Texas

related items.

Another thought is to analize my previous sales and then pick a handful of states

to sell in.

Additionally, I expect that many of my online sources for merchandise will dry up.

So, it may be necessary to deal with them directly rather than our traditional way.

Again, Thank you for sharing your thoughts

---

I was thinking along those same lines as far as selling only instate, except I'm in Alaska - not much as far as lots of people to sell to here - unless I just use Craigslist or Facebook Groups.  Also thought of just picking a few states to sell in as well.  I have to say I still find myself just sitting and saying outloud "I don't know what to do".  I'm a find a solution kind of person.  Excellent point about online sources drying up.  From what I have been reading Ebay and Etsy at least have called for Congress to step in, but I ran across a news video that was saying Congress probably wouldn't address this untill after the mid-terms.  I just don't want to take a risk of getting a notice in the mail later in the year of monies owed.  Thanks so much for commenting.  Good to know I wasn't the only one thinking atleast. 

[rustyrail]

I HAVE CONTINUED TO THINK MORE ABOUT THIS DELIMA. IF A GROUP OF SELLERS BANDED TOGETHER TO FOCUS THEIR SALES IN ONE OR A COUPLE OF STATES IT WOULD GIVE US SOME ADDITIONAL OPTIONS. SINCE I AM IN TEXAS, I AM GOING TO FOCUS MY COLLECTIBLE AND PUBLICATION ITEMS MORE TOWARD INDIVIDUALS LIVING IN TEXAS. I COULD PUT ITEMS THAT WERE RELATED TO OTHER STATES ON CONSIGNMENT WITH SELLERS FROM THOSE STATES. THEY IN TURN COULD PUT ITEMS THEY HAD ON CONSIGNMENT WITH ME OR POSSIBLY SELL THERE TEXAS RELATED ITEMS TO ME DIRECTLY.  

OBTAINING BULK MERCHANDISE TO SELL MAY BECOME A PROBLEM IN THE COLLECTIBLE MARKET.

SO, CONSIGNING ITEMS TO A GROUP OF SELLERS, OR BUYING THEIR ITEMS SPECIFICALLY RELATED TO TEXAS, WOULD POTENTIALLY BE HELPFUL.

ADDITIONALLY, I AM THINKING THAT IT MAY BE NECESSARY TO FOCUS MORE ON FOREIGN SALES. FOR INSTANCE I HAVE THOUSANDS OF FOREIGN MAPS THAT I NORMALLY DO NOT BOTHER WITH.

BUT, IF I SELL THEM, THERE WOULD BE NO SALES TAX OR REPORTING INVOLVED. AT LEAST AT THIS TIME!

ANY ONE INTERESTED IN FORMING A STATE SPECIFIC SELLING GROUP?????

ANY OTHER GOOD THOUGHTS?

[art4collectors]

June 21, 2018
Today, the Supreme Court issued its ruling in the Internet sales tax case of South Dakota v. Wayfair, ending the long-standing, black and white physical presence sales tax collection standard. Ending the Quill nexus standard allows a state to impose sales tax burdens on large retail businesses who do not have employees or facilities inside the state’s borders.

The South Dakota sales tax law that led to the end of the Quill standard targeted larger Internet retailers. Each of the three retailers brought to court - Wayfair, Overstock and Newegg - sells more than $1 billion per year, and in some cases much more. The Court’s decision states that the South Dakota law “applies only to sellers who engage in a significant quantity of business in the State, and respondents are large, national companies that undoubtedly maintain an extensive virtual presence.”

“While we are obviously disappointed to see Quill’s standard overturned, we are pleased that the Court was very clear about the importance of protecting small businesses from unfair burdens,” said Cathy Foster, VP of Global Government Relations and Public Policy at eBay. “If state tax authorities attempt to subject remote small businesses to expensive audits and lawsuits, there will be increased litigation across the country to protect small businesses from unfair burdens.”

eBay is committed to supporting its sellers and helping them continue to grow their businesses. The eBay Government Relations team will continue to encourage Congress to step in and provide clear tax rules, with a strong small business exemption, to help small businesses take advantage of the Internet to create local jobs. If you want to make your voice heard, click here to sign our petition.

[rustyrail]

Saturday at 11 AM (CTZ), I contacted the Sales and Billing Department at eBay. I ask what plan(s) eBay had or was working on to address the delima that we as sellers will have concerning the implications of being required to collect and remit sales tax fees for all 50 states.  

THE ANSWER FROM THE IDIVIDUAL I SPOKE TO!  

We have not received any guidelines or information concerning how eBay will address this issue!!!! 

I was assured that eBay management would be notified about my concern and that at some time in 

the future that eBay would notify all sellers with an update.

FOR NOW WE ARE IN THE WAIT AND SEE MODE!!!

You may want to add your voice by contacting the Sales and Billing Department at eBay. 

[caninekopz]

So I got this in my email this morning as I am sure you all did.

It's time to tell Congress to protect small businesses.     Dear Richard,

The U.S. Supreme Court has announced their decision on the S. Dakota v. Wayfair case, overturning the long-standing rule that states could not tax businesses or sellers outside of that state's borders. Now is the time for Congress to act on legislation that protects small businesses.

And we need your help.

We are asking you to join us and digitally sign our petition to show our political leaders that you stand against new Internet tax burdens that could permanently damage U.S. small businesses like yours. The petition takes less than a minute to complete. We will soon be delivering this petition to President Trump, key members of Congress, and select state governors so we need you to participate now.

eBay has always supported tax policy that is fair to entrepreneurs, artisans, and small businesses. Rest assured that eBay will continue to fight this battle on your behalf!

Sincerely,

eBay

Not real sure that I want Ebay fighting this for me as I have posted.  They are spending my hard earned money that they have grabbed as fees and instead of using them to fix their broken site, they want to use them for political issues. 

I know others have different opinions this is just mine.  Another reason Ebay is failing.

BOOO EBAY

Rich 

[somanypostcards]

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@art4collectors wrote:
June 21, 2018
Today, the Supreme Court issued its ruling in the Internet sales tax case of South Dakota v. Wayfair, ending the long-standing, black and white physical presence sales tax collection standard. Ending the Quill nexus standard allows a state to impose sales tax burdens on large retail businesses who do not have employees or facilities inside the state’s borders.

The South Dakota sales tax law that led to the end of the Quill standard targeted larger Internet retailers. Each of the three retailers brought to court - Wayfair, Overstock and Newegg - sells more than $1 billion per year, and in some cases much more. The Court’s decision states that the South Dakota law “applies only to sellers who engage in a significant quantity of business in the State, and respondents are large, national companies that undoubtedly maintain an extensive virtual presence.”

“While we are obviously disappointed to see Quill’s standard overturned, we are pleased that the Court was very clear about the importance of protecting small businesses from unfair burdens,” said Cathy Foster, VP of Global Government Relations and Public Policy at eBay. “If state tax authorities attempt to subject remote small businesses to expensive audits and lawsuits, there will be increased litigation across the country to protect small businesses from unfair burdens.”

eBay is committed to supporting its sellers and helping them continue to grow their businesses. The eBay Government Relations team will continue to encourage Congress to step in and provide clear tax rules, with a strong small business exemption, to help small businesses take advantage of the Internet to create local jobs. If you want to make your voice heard, click here to sign our petition.

---

The Supreme Court ruling does NOT protect small businesses because it allows South Dakota to have a threshold of $100,000 or 200 transactions.  So if I have 200 auctions sold to people in South Dakota in the preceeding 12 months at the starting price of $.24, a total of $48.00, then I'm required to collect sales tax.  I am a sole-proprietor, have no employees, have been in business for over 10 years, and have a business model of high volume, low cost sales, so I can have days with 50 sales.  There is no way I can handle the burden of dealing with 12,000+ different tax jurisdictions, the expense of obtaining seller's permits ($90/state for 45 states = $4,050 by one provider), the cost of TaxJar to file sales tax returns in all the states ($17/month for up to 1,000 transactions/month = $204), the cost of converting from a sole-proprietor to a LLC in all the states, paying franchise taxes in the states that require same and providing operating aggreemen ts for the LLC to them, meeting DBA (doing business as) requirements to reserve and register a business name in all the tax jurisdictions that require this including publishing same in their local newspapers, knowing all the varying tax rules such as senior sales tax discounts in some places, tax exemptions that vary all over the place, and even archaic rounding requirements like Maryland saying $.04 rounds up.  And if I don't collect sales tax then I am required by a number of states to inform sellers they are responsible for paying the use tax.  Some states specify the exact wording.  And at year end I must notify these sellers of all the use taxes they owe by mail (not email) and also notify the state of all sellers who owe use tax.  Last night I listened to a Taxjar presentation on Remote Seller Notice and Reporting Laws.  These existed even before the Supreme Court ruling, and they are extremely complex on purpose to get you to collect taxes in lieu of meeting the reporting requirements.  If you do not then worst case in one state is a single sale where you didn't provide proper notification in advance (as on the shoping cart display), on the invoice, and at year end, you could be fined $45,000.  So if a seller pays before I send an invoice, I can be fined as eBay doesn't provide the use tax info.  I do believe the burden of collecting sales tax for all sales cannot be met, either financially or logistically, by small businesses, yet we now must adhere to all laws that currently exist or will quickly be passed by states that require us to collect sales taxes. 

[rustyrail]

NOT A VERY PLEASANT FORECAST!!!

[somanypostcards]

Read this:

https://www.supremecourt.gov/DocketPDF/17/17-494/40468/20180328173631276_Wayfair%20Respondents%20Bri...

It has many more details on the burdens now imposed on sellers to collect sales tax on all sales in the USA.

[cooltronix]

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@rustyrail wrote:

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.  

---

I have no idea what their plans are or whether it's logical, reasonable, or workable. Lawmakers often are untouched by reality. They create a mess and leave it to others to make it workable.

But I can tell you how it is in the EU: When you ship to another EU Country you charge the (your) local tax. So a seller in Germany that ships to France must include the 19% German VAT. Same as a local sale. Now this 19% he doesn't send anywhere for now. It appears on his annual tax bill. It's not dealt with on a case to case basis. The seller hat nothing to do with the taxes of France or whatever country he ships to.

If he ships out of EU he can deduct the 19% VAT and give the buyer a discount. Or simply ignore it and the the 19% on this transaction too. Many sellers ignore the buyers discount because it's additional paperwork.

[satisfaction_1_2017]

I agree that it is impossible for a small business to comply with this ruling.
1) You would have to setup to withhold state/local taxes per state/local rules, learn every rule per state and local, file in each state and get forms so you can file in each state/local. Just impossible for me as a small seller -- I probably couldn't get it right either -- I looked into someone doing it for me but the cost was more than what I made.
2) If Ebay/Etsy withheld the Sales Tax - they would also have to file the taxes and withhold - which they would have to charge a fee -- If the fee was not too much then it would be well worth it to me.
3) Small platforms should be exempt but each state will have the ability to have different rules -- you cannot assume you are exempt because you are small business. Then if you do not withhold you will have use tax rules to follow
4) It is too new to know what has to be done and I am putting both my etsy/ebay shop on vacation until this gets sorted out -- I cannot comply with this ruling and I make little profit now.
5) As this plays out I will be asking myself -- is this worth it?

[backyard_finds]

I don't know about groups but here's something that someone wrote on another post and I thought you know thats quite possibly a great idea.  And its this:  Sell to Canada skipping the Global Shipping program all together and/or sell to any country other than the USA via the global shipping program and just pay Kentucky tax.  (Kentucky tax would have to be paid because your item takes up residence there even though its a very short period of time. )

Here's something else - Call your Congressmen and write the supreme court of the ludicrisy of this decision.