eBay

mr_lincoln · ‎10-07-2019

The state sales tax issue is only the beginning of taxes to come. Why? Because there's still money on the table. Just be glad our President is going after taxes from foreign shippers or it could be worse from a competitive standpoint. While it took states a while to get their sales tax collection laws in place it may not take as long for them to get their income tax laws in place.

The immediate windfall for each participating state for Sales Tax is suddenly realizing sales tax on ALL internet transactions, meaning all those Sellers who dodged reporting internet sales or didn't have a Tax ID for wholesale purchasing and reporting will now have sales tax levied on their transactions. Now, as long as they don't get a PayPal or future eBay Managed Payments 1099K the government will be hard pressed to collect tax on their income from online sales ... THIS is where the future tax push is heading, and don't think anyone in state government hasn't thought this far ahead.

At some point the venues will be tasked by the state and or federal government to generate 1099Ks for ALL members of the venue and there will be a minimum dollar threshold and my guess is it will be well below the current $ 20,000 on PayPal. And why do I think this? Its because the states will do the math after a couple venue sales tax reporting cycles and compare that with their registered Tax ID citizens and see what I am guessing to be a rather large difference. All they have to do is some simple math to see that they are getting far and away more sales tax on what their Tax ID holders are reporting in actual sales ... this will gave them a general idea of the dollar amount many people are NOT reporting anything for either Sales Tax or Income tax purposes. In our state it means another 3.07% on the table for Income tax not to mention the Federal Government's cut on that increased income tax.

Regards,
Mr. Lincoln - Community Mentor

double2trouble · ‎10-07-2019

I've been filing a Schedule C, and collecting and remitting state sales tax since I started selling as a side business. Whether you recieve a 1099K or not, you are required to do so. If you should ever find yourself in an audit, the IRS will aquire financial records from your bank, eBay, PayPal, any electronic payment service, and they will freely hand over the information. The state tax authorities are even worse than the IiRS. It is not worth it.

m60driver · ‎10-07-2019

Foreign shippers are not being taxed. There are new tariffs being imposed upon imported goods that are paid for by US based importers just as long imposed import duties are paid, a cost that will be passed on to the US populace. The impact to foreign exporters are lower sales as a result of the higher costs to US consumers.

You should be more concerned about tax loop holes such as the carried interest loophole that allows hedge fund managers making tens of millions a dollars a year to be taxed at a low 15%. We should all be more focused upon the high taxes on lower and middle class earned income (wages) as compared to the low taxes on very high unearned income. Your concerns are misplaced.

mr_lincoln · ‎10-07-2019

@the*dog*ate*my*tablecloth wrote:
I would be thankful if all the tax cheats were caught and fined. We all know that seller who is not filing income tax on their Ebay earnings because they didn't get a 1099. It will level the playing field for all of us who already followed the law.

Exactly ... the Sales Tax laws are the first step ... states will see the big difference in tax collected and income being reported pure and simple. They were seeing their lost tax revenues from those of us who have Tax IDs and report Gross sales and Net sales IN state for tax purposes ... I am not surprised our state was one of the first ones to implement the law.

Regards,
Mr. Lincoln - Community Mentor

mr_lincoln · ‎10-07-2019

@csbbct wrote:
I've been paying both federal and state income tax on my eBay profit for years, even before Paypal starting distributing 1099-K's. As most know here, it's always been an IRS rule that if you're buying something with the intent of reselling to make a profit you are supposed to declare it as income on your federal tax return, regardless of the amount or whether you received a 1099-K or not. So if it's reported as income on your federal return and your state has an income tax then they know about it, even if you don't have a sales tax ID, and you are already paying income tax on it.

Aside from this though, states can't use the newly reported internet sales taxes to determine whether enough sellers are reporting income to them. Since eBay is collecting sales tax based on the buyer's state and income taxes are based on the seller's state, the numbers will never match. So, hypothetically, every dollar of sales tax collected for a state could have come from sellers who live in other states and do not owe income tax to their state.

Let me correct this for your ... eBay is collecting sales tax based on the Seller's state NOT the Buyer's state .... here's what eBay is doing for ALL our State's Sellers ... when we sell something it gets charged sales tax ... so basically for ALL PA sales eBay is completing a form like that shown below. It has nothing to do with inbound shipments from other states that are being tax by the other states. So the state will know exactly how many sales dollars leave our state ...

Regards,
Mr. Lincoln - Community Mentor

ersatz_sobriquet · ‎10-07-2019

@m60driver wrote:
Foreign shippers are not being taxed. There are new tariffs being imposed upon imported goods that are paid for by US based importers just as long imposed import duties are paid, a cost that will be passed on to the US populace. The impact to foreign exporters are lower sales as a result of the higher costs to US consumers.

You should be more concerned about tax loop holes such as the carried interest loophole that allows hedge fund managers making tens of millions a dollars a year to be taxed at a low 15%. We should all be more focused upon the high taxes on lower and middle class earned income (wages) as compared to the low taxes on very high unearned income. Your concerns are misplaced.

You're right on your points, however I don't think Mr. Lincoln's concerns are misplaced. He's talking about the small seller that sees their ebay income as a hobby and doesn't declare on taxes. I think a lot of posters who are upset that their neighbor makes more than $500 on their yard sale are the ones who's concerns are misplaced. It's the mentality of let's go after the little guy--when Trump and congress gave the rich (once again, surprise surprise!) a tax break while the little guy's tax break evaporated. It's the Sackler's of this world that are hiding BILLIONS while having their company declare bankruptcy. This stuff goes on everyday, and yet the little people are so concerned about their next door neighbor...the filthy rich must laugh their asses off at us.

the*dog*ate*my*tablecloth · ‎10-07-2019

No actually it's not the $500 seller who annoys me. It's the $19,500 seller who thinks since they stop before they hit $20k they can avoid taxes.

People who sell $19k in a year are typically NOT yard sale type sellers selling their used kids' clothes.

mr_lincoln · ‎10-07-2019

@m60driver wrote:
Foreign shippers are not being taxed. There are new tariffs being imposed upon imported goods that are paid for by US based importers just as long imposed import duties are paid, a cost that will be passed on to the US populace. The impact to foreign exporters are lower sales as a result of the higher costs to US consumers.

You should be more concerned about tax loop holes such as the carried interest loophole that allows hedge fund managers making tens of millions a dollars a year to be taxed at a low 15%. We should all be more focused upon the high taxes on lower and middle class earned income (wages) as compared to the low taxes on very high unearned income. Your concerns are misplaced.

Please stop with the vindictive "your concerns are misplaced" type comments ... if you want to start a non-eBay sales Tax related thread about "hedge fund managers" then do so but your comments are somewhat off topic for this thread. I am sure your points are valid but this thread, from post #1 is not about that any of that at all ...

Regards,
Mr. Lincoln - Community Mentor

mr_lincoln · ‎10-07-2019

@the*dog*ate*my*tablecloth wrote:
No actually it's not the $500 seller who annoys me. It's the $19,500 seller who thinks since they stop before they hit $20k they can avoid taxes.

People who sell $19k in a year are typically NOT yard sale type sellers selling their used kids' clothes.

This is exactly what future tax laws will target (IMHO) ... Sellers, I suspect, will have to register with their state to sell on the internet OR the venues will be tasked with generating 1099Ks for all people selling on the venue. Right now its a sweet deal for the States to sit back and let the venues do all the work to collect and remit the sales tax with perhaps the exception of the following:

The five states that don't have a sales tax (as of May 2018)

Alaska.
Delaware.
Montana.
New Hampshire.
Oregon.

Regards,
Mr. Lincoln - Community Mentor

divwido · ‎10-07-2019

I'm sorry, you totally lost me at ...be glad our President...

Be glad? Do you have a different President than me?

Good Moms let you lick the Beaters.

Great Moms turn them off first.

lacemaker3 · ‎10-07-2019

@mr_lincoln wrote:
@csbbct wrote:
...

Aside from this though, states can't use the newly reported internet sales taxes to determine whether enough sellers are reporting income to them. Since eBay is collecting sales tax based on the buyer's state and income taxes are based on the seller's state, the numbers will never match. So, hypothetically, every dollar of sales tax collected for a state could have come from sellers who live in other states and do not owe income tax to their state.
Let me correct this for your ... eBay is collecting sales tax based on the Seller's state NOT the Buyer's state .... here's what eBay is doing for ALL our State's Sellers ... when we sell something it gets charged sales tax ... so basically for ALL PA sales eBay is completing a form like that shown below. It has nothing to do with inbound shipments from other states that are being tax by the other states. So the state will know exactly how many sales dollars leave our state ...

...

Sorry, @mr_lincoln, but you seem to be misunderstanding how the eBay-collected sales tax works.

eBay is collecting sales tax based on the buyer's shipping address, so all items that are being delivered to a particular state, ebay is collecting the sales tax for that state. No matter where the seller is located, and even if the seller is outside the USA.

So, in your example, eBay is collecting PA sales tax at the local rate for all items being delivered to a shipping address in PA, including both sellers in PA and all sellers outside of PA.

For example, if I put one of your items for $17.95 into my cart, and go to checkout, if I use a shipping address in Pittsburgh, it will charge me $1.40 for PA sales tax (6%), but if I use a shipping address in LA, then it will charge me $1.71 for CA sales tax (9.5%). If I ship to a state that eBay doesn't collect tax for, there is no sales tax.

Ship to   Price   Shipping  Sales Tax  Total   Percentage
CA        $17.95   $5.66      $1.71    $25.31    9.5%
PA        $17.95   $5.24      $1.40    $24.59    6.0%

the*dog*ate*my*tablecloth · ‎10-07-2019

I think of it as more of a trend. Once the IRS sees how much the States are getting from enforced sales tax, they may start going after income tax avoiders. Plus with everything now online it would be an easy trail to follow. Just imagine all the penalties and interest these tax avoiding sellers owe for the past three years.

The world is changing, the ability for cheaters to hide is disappearing.

gracieallen01 · ‎10-07-2019

@buyselljack2016 wrote:
@ersatz_sobriquet wrote:
@mr_lincoln wrote:
The state sales tax issue is only the beginning of taxes to come. Why? Because there's still money on the table. Just be glad our President is going after taxes from foreign shippers

I believe you're probably right on future taxable income below 20k, Mr. Lincoln.
I like the idea of making USPS fair rates for foreign shippers, but I'm not crazy about the $100 extra I just paid for an appliance because of tariffs though.
It is my understanding that these tariffs are going to level the playing field, but I just don't understand at who's expense, or maybe I do:(

Wouldn't we have to have some domestic manufactures, with domestic factories and such, before there could be a level playing field? Seems everybody has 'moved'.

Not saying 'NO' doesn't mean 'YES'.

The foolishness of one's actions or words is determined by the number of witnesses.

Perhaps if Brains were described as an APP, many people would use them more often.

Respect, like money, is only of 'worth' when it is earned - with all due respect, it can not be ordained, legislated or coerced. Anonymous

gracieallen01 · ‎10-07-2019

With all due respect, you may have an incorrect perception, though I may be mistaken.

Yes, ebay is collecting a tax, however, it isn't a sales tax - even though it is a tax created from a sale. ebay is collecting a USE tax from the buyer that purchases the item, no matter where they live - according to the amounts and criteria of the buyer's home state. This is to close the loophole for the buyer that avoids paying tax locally by purchasing online and doesn't report it on their state's income tax forms as a "USE TAX".

From cdfta.ca.gov - "Generally, if sales tax would apply when you buy physical merchandise in California, use tax applies when you make a similar purchase without tax from a business located outside the state."

This does not preclude the seller being responsible for collecting sales tax for the state in which they live and have their business.

Not saying 'NO' doesn't mean 'YES'.

The foolishness of one's actions or words is determined by the number of witnesses.

Perhaps if Brains were described as an APP, many people would use them more often.

Respect, like money, is only of 'worth' when it is earned - with all due respect, it can not be ordained, legislated or coerced. Anonymous

mr_lincoln · ‎10-07-2019

@lacemaker3 So are you saying that if I am a Buyer and have a shipping address in one of the 5 states that has NO sales tax that I will NEVER have to pay State Sales tax on an internet purchase?

Regards,
Mr. Lincoln - Community Mentor

lacemaker3 · ‎10-07-2019

@mr_lincoln wrote:
@lacemaker3 So are you saying that if I am a Buyer and have a shipping address in one of the 5 states that has NO sales tax that I will NEVER have to pay State Sales tax on an internet purchase?

Yes, that's correct.

Unless the state decides to start charging sales tax, of course.

Also, if a buyer lives in a state where eBay is not collecting sales tax, then they don't have to pay sales tax on their eBay purchases either. There are 45 states with sales tax, and eBay is only collecting for 34 states at the moment, going up to 37 states as of Jan 1, 2020. So there are 45-37= 8 states that have sales tax, but do not have Marketplace Facilitator sales tax laws.

However, buyers in these 8 states do owe Use Tax (I've never found a state that had sales tax, but not use tax). For example, in Michigan, all residents who file a state income tax form, will be paying Use Tax on $1,000 of purchases they are assumed to have bought without paying sales tax, unless they keep records and file for the exact amount of use tax they owe based on actual purchases.