Sales Tax question.

[horses101pink]

Hi, 

I want to start selling on e-bay. It appears e-bay collects sales taxes when it sells something in 45 of the states. Apparently, we can't opt out of selling in Florida, Kansas, Louisiana, Mississippi, Missouri where they don't collect sales tax.  Do you guys set up tax tables for those states or how do you handle selling to them?

[ckimodog]

@horses101pink 

I live in the state of Kansas and they do collect state tax.  My suggestion would to consult a tax expert to get your answers and the right information you need.  

[stuff4divas]

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@horses101pink wrote:

Hi, 

I want to start selling on e-bay. It appears e-bay collects sales taxes when it sells something in 45 of the states. Apparently, we can't opt out of selling in Florida, Kansas, Louisiana, Mississippi, Missouri where they don't collect sales tax.  Do you guys set up tax tables for those states or how do you handle selling to them?

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Here is the eBay link for instructions, your question is answered in the "Seller's Tax Responsibilities" section>

https://www.ebay.com/help/selling/fees-credits-invoices/taxes-import-charges?id=4121&st=12&pos=5&que...

[biggymoe]

If a state doesn't have a sales tax, neither you, nor eBay, has to do anything.  Not sure what you are thinking might need to be done.

[lacemaker3]

@horses101pink, I'm sorry but you have misunderstood this.

All of those states have sales tax, and eBay collects the buyer's sales tax for sales to those states except for Missouri.

https://www.ebay.com/help/selling/fees-credits-invoices/taxes-import-charges?id=4121&st=3&pos=3&quer...

Alaska, Delaware, Montana, New Hampshire and Oregon are the states that don't have a state-wide sales tax. In Alaska, some cities and jurisdictions have a local sales tax, and eBay collects the sales tax for shipments to those locations.

Unless you are in Missouri, you don't need to worry about sales tax. If you are in Missouri, you need to contact your state and register to collect sales tax for shipments to Missouri, because they are the only state (with a sales tax) that doesn't have a Marketplace Facilitator law. That's the only situation, and the only state, where you would need a sales tax table. eBay modified the sales tax tables a year or two ago, to disable their use for all the states where eBay is not responsible to collect the sales tax.

If you are in any other state, then you just leave it to eBay to collect the tax correctly.

[luckythewinner]

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@horses101pink wrote:

I want to start selling on e-bay. It appears e-bay collects sales taxes when it sells something in 45 of the states. Apparently, we can't opt out of selling in Florida, Kansas, Louisiana, Mississippi, Missouri where they don't collect sales tax.  Do you guys set up tax tables for those states or how do you handle selling to them?

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If eBay does not collect sale tax for me, I do not do it. For the five states you mentioned:

Individual sellers are exempt from collecting sales tax in Florida unless they sell more than $100,000 in that state. That went into effect on July 1, 2021.

https://www.grantthornton.com/library/alerts/tax/2021/SALT/F-J/FL-enacts-remote-seller-economic-nexu...

Individual sellers are exempt from collecting sales tax in Kansas unless they sell more than $100,000 in that state. That went into effect on July 1, 2021. 

https://www.avalara.com/blog/en/north-america/2021/11/kansas-clarifies-sales-tax-responsibilities-fo...

Individual sellers are exempt from collecting sales tax in Louisiana unless they sell more than $100,000 or have more than 200 in that state. That went into effect on July 1, 2020. 

https://www.avalara.com/blog/en/north-america/2020/06/new-louisiana-sales-tax-collection-requirement...

Individual sellers are exempt from collecting sales tax in Mississippi unless they sell more than $250,000. That went into effect on Sep 1, 2018.

https://www.avalara.com/taxrates/en/state-rates/mississippi/mississippi-sales-tax-guide.html

Individual sellers are exempt from collecting sales tax in Missouri unless they sell more than $100,000. That goes into effect on Jan 1, 2023.

https://www.avalara.com/blog/en/north-america/2021/06/missouri-requires-out-of-state-sellers-and-mar...

[monica-sells]

one of the good things about ebay is you do not have to collect sales tax for your sales.

....period.....

as the facilitator, ebay is responsible for the collection/remittance of any and all sales taxes as well as VAT.....

[tsme35 · Accepted solution]

Actually it is the responsibly of MO residents to pay taxes on items bought online and summit them to the DOR, I haven't meet one yet lol.

 Also the reason MO is the last state to collect online sales tax is because it does not have the capacity with their antiquated filling system and been updating the system this year.

[southern*sweet*tea]

Being from Mississippi I can assure you that sales tax is charged - 7% or 7 1/2% depending on where you live.

Ebay will collect any sales tax due and remit it to the buyer's state, there is nothing an Ebay seller needs to do.

This is the MARKETPLACE collection rule.

For INDIVIDUAL sellers - one with their own website, not selling on a third party venue like Ebay, Etsy, Amazon, etc.  you can sell up to $250000 before you need to worry about collecting and remitting sales tax from Mississippi residents.   Other states will have their own rules.

[monroe67]

"Do you guys set up tax tables for those states or how do you handle selling to them?"

As a seller, my advice to you as a new seller is, "Don't worry about the sales tax." 

eBay does that. 
They have programmers who have set up the computers to look up the buyer's zip code and figure out what the sales tax is in that area.  

Not only does eBay figure out how much sales tax to charge to buyers, but eBay also sends all that sales tax they collect on behalf of thousands of sellers -- eBay sends all that tax money to the appropriate states' treasuries.  As a seller, if I had to do that -- I would quit trying to sell on eBay.  

I can't keep anything about sales tax straight in my head.  Earlier this year I sold a thing to a buyer in Missouri that, if it had sold to a buyer in Los Angeles or Des Moines or Boston, would have been subject to sales tax.  But the buyer in Missouri was not charged sales tax.  I don't pretend to understand it.  I have chosen simply to rely on eBay's math.   (BTW, this was a total sale of less than $20.00.  If there was any kind of mistake in that, it's not going to ruin me if I had to return $20.00.)

And, as I have pointed out before, one state you omitted from the non-sales tax states is Delaware.  There is no sales tax in Delaware.  So it shouldn't be much of a surprise that freight forwarding companies have made their homes there.  And my Russian buyers usually have had addresses in Delaware.  

[monroe67]

"Actually it is the responsibly of MO residents to pay taxes on items bought online and summit them to the DOR, I haven't meet one yet lol.

 Also the reason MO is the last state to collect online sales tax is because it does not have the capacity with their antiquated filling system and been updating the system this year."

In my response to the OP, I talked about a sale I made to a Missouri resident earlier this year  --

on which eBay did not charge that Missouri buyer any sales tax.  
I didn't understand it but decided to take an attitude of eBay Must Be Right, at least on this subject.  

And so, I thank you for this explanation!  
It's not every day, but I do learn new things here!  

[soh.maryl]

eBay handles the collecting of state sales tax.  There is no need for the seller to do anything.  eBay simply adds the state sales tax to the buyer's invoice.  When the buyer pays, that portion of the payment is remitted to the appropriate state treasury by eBay.

Why do you want to opt out of selling to those states?