Selling from Ohio

[ddani740]

I haven’t sold on ebay for many years and planning on getting back into it. I have a couple questions. 1) If I sell to a buyer also in Ohio does ebay take the taxes out or do I collect it? If they do, how do I file my state taxes if they’re already taken out? 2) Do I need a vendors license? Please and thank you!

[chapeau-noir]

@ddani740  eBay takes care of collecting and remitting sales tax to all states, so don't worry about it.  You don't need a vendor license, though if you start selling regularly you need to look into your state department of revenue to see if you need a business license.

[reallynicestamps]

Before you start worrying about taxes register for a Managed Payments account.

EBay will want your SIN and your checking account information. You may need a secondary form of identification.

There will be a Hold on your customer payments of about 21 business days until you re-establish yourself.

[caldreamer]

A lot of things have changed.   All Sellers are required to enroll in new Managed Payments (that is how you get paid).  You need to provide EBAY with checking account (ROUTING# only) and social security# (for tax purposes).  Name on your checking account, social security card and EBAY profile need to be EXACT MATCH (or your application may be denied).    

EBAY will collect sales tax on your behalf and remit to the states.   However, you still may be required to report "annual sales" to your STATE tax board (every state has different laws).   Also, you should check with your city to see if they require you to have a "business license" to sell things on EBAY.

With the new Managed Payments EBAY deposits money directly into your "checking account".   Also, bear in mind...EBAY also can take money out of your checking account (if you owe for fees or chargebacks).   Best if you create a new checking account that is dedicated only to EBAY and keep some money in the account to cover any chargebacks.

[714ricki]

Ebay collects the sales tax on behalf of the sellers for all states & remits accordingly. 

[mantle1951]

Sounds like a question for an accountant in your state.

[css2001]

Hi @ddani740 , I also live in Ohio. First of all, you do not have to worry about sales tax, eBay takes care of collecting and remitting state sales tax for you.
A vendor/reseller license, obtained from the Ohio Dept of Taxation, is only needed if you plan on purchasing product from wholesellers.
To get the best advice and info for starting a business here in the Buckeye state you need to register with the Ohio Business Gateway. Here is that link:

https://gateway.ohio.gov/about

Good luck!

[b86fiero]

I Used to work for the Treasurer Of The State of Ohio - who collects sales tax and remits it to the counties & cities as required by Ohio law.

I highly recommend you obtain a Vendor's License because:

1. Ohio eventually may want to know why eBay is transmitting sales tax to OH addresses and other states for items you sold.

2. Do you think you are a "hobby" seller and are exempt?  Contact your local county treasurer's office or the OH Treasurer Of State's office to inquire about your status. Some cities require a vendor's license if you are selling from your residence. Those office will be able to tell you the type of vendor's license you need.

3. You will have to claim all income from selling online on your IRS and OH state and city of residence income tax filings.  Eventually OH and/or your county of residence or city may want to know why it appears you are conducting a business without a license and if and how sales tax was collected and remitted.

4. If you sell enough eBay will issue you a 1099-K for use in when filing your annual tax reports.  The IRS also receives a copy of that report. OH and the city you reside in will require copies of that with your tax filings. Yes, every entity out there wants a piece of your poptart. Not many sellers receive an actual "piece of the pie" anymore. Regardless of the dollar amount of your sales you still have to claim it as income.

5. After you obtain a vendor's license you can register and file quarterly or bi-annual tax reports through the OH Business Gateway as required. You will also have to file a report in November regarding whether you are holding any unclaimed funds where you are/were unable to refund a buyer for whatever reason. 

6. Better to be legal than ........

7. Obtaining an OH vendor's license is easy at a minimal cost.   

Take the time to investigate your options. It's not a scary process. Ohio and all states encourage new businesses. 

[b86fiero]

Also note, merchandise purchased from any purveyor, store, thrift shop, etc. for the sole purpose of reselling is considered operating a business.

Many online sellers operating a legally licensed business are purchasing sale, discount and discontinued merchandise from stores in their area and/or thrift shops, estate and garage sales.

I purchase inventory from numerous sources including attending Wholesale shows and expos and from other online sellers.