Sales Tax

[mpcac]

I'm confused. I purchase most of my inventory for resale on Ebay. Now Ebay is charging me sales tax. Does this sales tax go back to my home state which is Iowa where I live and purchase these items online, or does the sales tax that I pay for an item go to the sate that the seller lives in? The reason I ask this is because I need to recover the sales tax for the items that I will resell. If all of the sales tax that I pay goes back to the sate of Iowa where I live and made the online purchases, then I will just collect this tax from them. If the tax stays in the sellers state, then do I have to get a sales tax permit from each state that I make a purchase from to recover my sales tax for items purchased for resale.

[tryno2]

It will go to Iowa.  

[rock.star]

Yes ebay sends the sales tax to the state that it was collected for.

[alcoforever]

EBay now has a way for resellers to apply for tax exemption on their purchases.  The link is here:  https://www.ebay.com/help/buying/paying-items/paying-tax-ebay-purchases?id=4771

[mpcac]

I received that email from Ebay and sent them a copy of my Iowa Sales Tax Exempt License. I was so happy thinking that now when I purchase inventory resale that Ebay will allow me to opt out of paying sales tax. I then received an email from Ebay requesting Tax Exempt Licenses that I would be purchasing resale inventory with. I have always presented my Iowa Sales Tax Liscense to vendors in other states when purchasing inventory and have never been charged sales tax.   I realize this is a big pain for Ebay too, but there's got to be an easier fix to this problem. 

I did talk to an Ebay Rep. on the phone and they told me that when I'm sitting in my home in Iowa and I make an inventory for resale that Ebay charges me Sales Tax for Iowa and then sends the tax to Iowa and not to the sellers state.  Does anyone know if this is true???

I really appreciate the help!! 

[the*dog*ate*my*tablecloth]

Iowa is one of the States where eBay collects as a marketplace facilitator. That money will go to Iowa. I’ve heard you can reclaim iron your State tax return if the exemption thing doesn’t work out

[myboardid]

Did you send a copy of your sales tax license to eBay - it sounds like you did.  Now they need a copy of the form you present to other vendors.  Shouldn't be too hard to do.  You should be able to get one from the Iowa state sales tax office.

The alternative is to claim it when you file your state income taxes. 

[mpcac]

" Iowa is one of the States where eBay collects as a marketplace facilitator. That money will go to Iowa. I’ve heard you can reclaim iron your State tax return if the exemption thing doesn’t work out "

Thanks for taking the time to respond. I did contact the Iowa Dept. Of Revenue and was told that I can use a special form to retrieve the sales tax that Ebay collected for the state of Iowa on inventory purchased for resale. 

I guess my million dollar question is the following: When I purchase on Ebay, from my home in Iowa, a resale inventory item from a seller in California and pay sales tax, does this sales tax go to Iowa or California? 

In an earlier posting I was told the tax goes to Iowa. I sure hope this is true because this will solve my problem.

[mpcac]

Thanks for taking the time to respond.

Yes, I did send a copy of my Iowa Sales Tax License to Ebay. I assumed then that they would allow me to opt out of paying sales tax on any purchases that were purchased as inventory for resale. I then received this response from Ebay : 

   ( Please submit the documents for each state you are requesting exemption for through the secure link below:

https://ocsnext.ebay.com/ocs/mudcwf?deptName=USe2MListing )

I interpret this as saying that I need to apply for a Sales Tax License from every state in the US that I might purchase inventory for resale in. In other words, I need to apply for a Sales Tax License from every state in the US and then will need to file for a refund from each state. If this is true, this will be a real hassle for me.

[slippinjimmy]

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@mpcac wrote:

Thanks for taking the time to respond.

Yes, I did send a copy of my Iowa Sales Tax License to Ebay. I assumed then that they would allow me to opt out of paying sales tax on any purchases that were purchased as inventory for resale. I then received this response from Ebay : 

   ( Please submit the documents for each state you are requesting exemption for through the secure link below:

https://ocsnext.ebay.com/ocs/mudcwf?deptName=USe2MListing )

I interpret this as saying that I need to apply for a Sales Tax License from every state in the US that I might purchase inventory for resale in. In other words, I need to apply for a Sales Tax License from every state in the US and then will need to file for a refund from each state. If this is true, this will be a real hassle for me.

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Your interpretation is wrong.

Here are some facts.....

When eBay collects Sales Tax on sales where the shipping address is in Iowa the money goes to Iowa, it doesn't matter where the seller is located.

If you are purchasing for resale AND are registered to collect tax in Iowa on the sales YOU make within Iowa then you can file an exemption certificate with your vendor (in this case eBay).

The exemption certificate is NOT your Iowa Sales Tax registration certificate. You need to send eBay an EXEMPTION certificate. The link below is for the exemption certificate.

https://tax.iowa.gov/sites/files/idr/forms1/IowaSalesTaxExemptionCertificate%2831014%29_0.pdf

Once you file that eBay should make your purchases tax exempt.

Also keep in mind that now eBay is collecting Sales Tax for Iowa you no longer need to when you have a in-State sale (on eBay) that you would have in the past collected sales tax yourself.

I have not looked deeply into the specifics of the Iowa system but it's likely similar to other States. You will need to report both the sales you made on eBay to Iowa AND the amount of tax collected by eBay on your behalf. Include this information in your regular Iowa Sales Tax return.

There is plenty more info at the Iowa Department of Revenue website.

[mpcac]

Yes, I am definitely confused. I  use this form ( https://ocsnext.ebay.com/ocs/mudcwf?deptName=USe2MListing )  ) to reclaim sales tax from the state of Iowa that I paid for inventory for resale. I really don't understand how this will satisfy Ebay. Presently, I'm just keeping track of the invoices that show sales tax paid for items for resale and I fill out the above form and send this information and form to my states department of revenue quarterly as advised by my state, to reclaim the sales tax.