Sales tax

[larrymajordev]

Is anyone else shocked by the sudden collection of sales taxes on purchases now from any state? Is this someone’s idea of a tax cut?

[7606dennis]

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@xpxw30 wrote:

as a resident of new York state I will not be buying or selling on ebay anymore I pay enough in taxes already  in new York we are taxed on everything !!!!!!! everything we are overtaxed 

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That is certainly your prerogative, however, since the law applies to all selling venues I don't see that that will solve your problem.  Perhaps seeking political change in your state's legislative body's thinking might do more in alleviating your tax burden. 

[crewchief1996]

What I'd really like to see from e-bay is to see the sales tax *before* I buy (like a "pre"-invoice, so I know what the total cost will be. Since they already can do that for shipping, why not for sales tax?? This is because in most states some things are taxable and some are not--and I'd like to know that before I hit the "buy it now".

[mansons2005]

They probably use the same train of logic as the department store and the supermarket. I mean, seriously, when you pick up a packet of t-shirts and look at the price tag, does a little panel appear under the retail price and flash the tax amount over a total for that purchase? No, the store assumes that you are familiar with the sales tax, whether or not the item in hand is exempt and what the rate is if it is not exempt.

Why on earth should buying online be any different? Going forward you know that you will be taxed, you know the rate and it is no different than a B&M transaction. And you have the same right to decline the transaction if you feel that a tax is being applied unjustly or at the wrong rate.

I have seen others suggest what you have and I see it as a non-issue. It is the "traditional" manner is which taxes are handled and presented in this country.

[jmcleve]

The new sales tax everyone is talking about is levied against the buyer and charged separately on the buyers PayPal account. Does anyone know if this buyer sales tax is collected on behalf of your state and then sent to that state?

[the*dog*ate*my*tablecloth]

In the States that have a Marketplace Facilitator law, ebay collects and remits to the buyers State.

Starting November 1st, Paypal will be charging buyers the total in one transaction.

[mansons2005]

Taxes are collected according to the destination state (where the item is shipped) and is remitted by eBay to that state. If your state has a enacted a Marketplace Facilitator law you pay the tax on all purchases (except exempt items), including international purchases and in some states on the shipping charges, and eBay sends ot to your state.

To ensure the best results regarding taxes, eBay recommends the following:

Make sure your shipping zip code includes the +4 so eBay calculates the correct rate. Otherwise they default to the highest rate in the general area.

The taxable status of an item is based on the first category the item is listed in. For example, if you purchase shorts listed in sporting goods instead of clothing then tax will be charged even in clothing exempt tax states.

[myboardid]

crewchief - do you not know the sales tax rate in your state and what items are exempt?  You should be able to figure this out by yourself.  Granted, in some states eBay has not yet gotten the exempted items correct and charges tax on them, but you can apply to your state for credit for that occurrence when you file your state taxes. 

[myboardid]

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@kingrandor1982 wrote:

Here's my bigger question:

So if sales tax is being collected thru eBay, does that mean I no longer have to file a report on bi-annual sales with the state?

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That depends on how your state wrote its Marketplace Facilitator law.  Some states still required that you report it and indicate that the facilitator took care of it, and others say you don't have to report it.  You should read the fine print in your state's law to find out. 

[7606dennis]

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@jmcleve wrote:

The new sales tax everyone is talking about is levied against the buyer and charged separately on the buyers PayPal account. Does anyone know if this buyer sales tax is collected on behalf of your state and then sent to that state?

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It is collected in accordance with the laws of the buyer's state.  It should be noted however, that this is not a new tax.  States that have enacted sales/use tax laws decades ago were suppose to have been receiving those taxes directly from their residents all along.  The states that have enacted marketplace facilitator laws have, by doing so, only turned eBay and other companies into their tax collectors in order to receive the revenue owed them but was not being paid.  Obviously, the honor system doesn't work in all cases.

[7606dennis]

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@xpxw30 wrote:

as a resident of new York state I will not be buying or selling on ebay anymore I pay enough in taxes already  in new York we are taxed on everything !!!!!!! everything we are overtaxed 

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Unfortunately, being taxed on everything is probably close to the truth.  However, that is something that you need to take up with your state's legislators.  Alas!  You have very little that you can do about the tax situation except perhaps relocate to one of the five states that has no sales tax.

By the way, I'm not sure not buying or selling on eBay anymore will be of much help.  Not buying will, of course, mean that you wouldn't have to pay sales/use taxes on the purchases you did not make, but not selling wouldn't affect those taxes since they are paid by the buyer.  However, it may adversely affect your income which would probably reduce your income tax liability.  

[7606dennis]

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@kingrandor1982 wrote:

Here's my bigger question:

So if sales tax is being collected thru eBay, does that mean I no longer have to file a report on bi-annual sales with the state?

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I would probably seek the advice of your accountant or tax preparation professional on this question.  You will probably also want to check with your state's taxing authority. 

You might also need to continue to file your returns in order to maintain your resale certification to continue being tax exempt on some purchases.  Again, you tax pro or your state's taxing agency could probably advise you better.

You will need to, at least, keep track of the sales so that you can account for that amount of gross sales that you have not collected tax on if you sell on other venues that aren't required to collect it under the MF laws of your state.  

[comic_infonow]

This is **bleep**, the government is getting tax on money that has already been taxed.  If I sell something it has been taxed already on the purchase.  A resell should not be taxed.  

[mansons2005]

Most states are calling it a Use Tax - as in per transaction. It doesn't matter how many times it has been sold previously. Just has it has always been with cars and most antiques, artwork, etc.

[fjrman1]

I agree with comic_infonow!  

For those who are selling a new item is one thing to collect a sales tax but for those who are selling used items that you no longer need or want is "b.s."

[displaystandsdirect]

One thing I have noticed is ,when we as the seller receives the payment through Paypal, paypal is charged us their fee on that tax amount as well, even though its not a 'payment', or funds that we are receiving. Its just part of the gross amount, yet we as the seller are still getting the fee by paypal on that tax amount. If ebay is going to collect the tax, thats fine, but the way its being done is causing us the seller even MORE fees... for example, one payment I just received the sale total was $47.98  BEFORE tax , $51.52 after tax.. $3.54   ..Paypal is getting their piece FROM ME of that 3.54 x 3% = .10 ..thats $.10 coming from my sale that Paypal is now getting... doesnt sound like much, buy we have alot of sales coming in, and by the end of the year, I'll end up paying an additional  $400 in fees per year to Paypal