Store closing New Sales Tax Law

[p7050]

How many people are closing there stores due to the new sales tax law or are you just going to wait it out to see what happens, Does the law become effective when the supreme court ruled on it or do the states have to enact the law. Thanks

[irinahat]

My state has already been taxing my Ebay earnings for years now and I still make an insane amount of profit even after Ebay fees, Paypal fees, and taxes. It is possible, it just requires hard work at figuring out where to get all your stuff for literally dirt cheap + maximizing your profit margin so that when taxes come, and all the fees hit you, you're still making above and beyond in terms of profit. 

So, no, I have no reason to close my store whatsoever.

[rock.star]

There is no new law as of yet . The court ruling just means that the South Dakota law was legal.
What some other states may do is unknown.

[rock.star]

He is asking about sales tax not income tax . Sales tax is paid by the buyer .

[luckythewinner]

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@p7050 wrote:

How many people are closing there stores due to the new sales tax law or are you just going to wait it out to see what happens, Does the law become effective when the supreme court ruled on it or do the states have to enact the law. Thanks

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There is no "new sales tax law".

The Supreme Court ruling was about the constitutionality of an existing sales tax law, one that already exempts most eBay sellers (unless they more than $100,000 to South Dakota per year).

I am not changing anything about my eBay business. 

[orangehound]

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@luckythewinner wrote:

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@p7050 wrote:

How many people are closing there stores due to the new sales tax law or are you just going to wait it out to see what happens, Does the law become effective when the supreme court ruled on it or do the states have to enact the law. Thanks

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There is no "new sales tax law".

The Supreme Court ruling was about the constitutionality of an existing sales tax law, one that already exempts most eBay sellers (unless they more than $100,000 to South Dakota per year).

I am not changing anything about my eBay business. 

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Good advice.  Just to add to it, the $100,000 of sales into South Dakota was considered reasonable by the Supreme Court to establish a seller's "economic nexus" into the state - it is a threshold at which the seller would need to register with the state to collect and remit sales taxes.  This decision by the Supreme Court has now been thrown back to the lower courts ... so the impact on retail is still navigating its way through courts and state laws.

That said, if a business has a "physical nexus" in a state - by "physical", this means where you operate out of, where you store merchandise, where employees live, etc - then for most states you should be registered with those state(s), and collecting and remitting sales tax ... and I believe that this would be for any level of sales activity.

Finally, (since I see people confused on this point), a "business" is any operation that is selling items here on eBay for a profit.  As soon as you buy a shirt for $1 and sell it for $10, you are considered a business ... as a business, you are subject to self-employment taxes, income taxes (state, local, federal), and the collection and remitting of sales taxes.

(My guidance above is non-professional ... consult your accountant or attorney for clarification, and specificity to your local laws).

[pburn]

As a true, patriotic American citizen, it is discouraging to me that someone thinks the SCOTUS enacts laws.

[penguins_dont_fly]

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@p7050 wrote:

How many people are closing there stores due to the new sales tax law or are you just going to wait it out to see what happens, Does the law become effective when the supreme court ruled on it or do the states have to enact the law. Thanks

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@p7050

The Supreme Court ruled on the legality of the existing South Dakota Sales Tax on ecommerce purchases where the seller does not reside or have a nexus  in South Dakota (AKA "Internet Sales Tax " or "Amazon Laws") in a ruling named South Dakota v Wayfair. (Wayfair is the company that was challenging the law)

They ruled that it is legal.

Washington State, Pennsylvania and South Dakota already have those laws in place.

The WA and PA laws stipulate that the venue (facilitator) is responsible for collecting and remitting those taxes.

Other States are now free to try to enact similar laws....and you can bet your bippie that by next year, most will.

The thing about Sales Tax is .... The BUYER pays it ... The question for eBay sellers is who is responsible for collecting and remitting those taxes to all of the different localities?

Etsy collects and remit the WA and PA taxes for sellers. Adyen is Etsy's payment processor.

As eBay transitions to Adyen for payment processing, my bet is that the transition will include internet sales tax collection for states that enact those types of laws.

[penguins_dont_fly]

Oh ... and why would I be closing my store?

I have seen lots of posts like this ... either leaving or wanting to block states that pass these laws.

I don't understand the reasoning behind it?

[myboardid]

In this forum, many participants confuse sales tax and income tax when it comes to the laws/rules and obligations.  This SCOTUS ruling is just confusing these sellers even more. 

Nobody needs to do anything yet.  Let the states sort out their laws first, then we'll see where we all stand.  Just make sure you are collecting any required sales tax in your own state, don't worry about any of the others. 

When it's all hung out to dry, the only thing I know is that it is going to cost us all money for the processing and remitting of the sales taxes, whether eBay does it and charges us a fee, or we do it ourselves and have to purchase software and postage, plus a lot of time, to accomplish the same thing. 

[penguins_dont_fly]

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@myboardid wrote:

In this forum, many participants confuse sales tax and income tax when it comes to the laws/rules and obligations.  This SCOTUS ruling is just confusing these sellers even more. 

Nobody needs to do anything yet.  Let the states sort out their laws first, then we'll see where we all stand.  Just make sure you are collecting any required sales tax in your own state, don't worry about any of the others. 

When it's all hung out to dry, the only thing I know is that it is going to cost us all money for the processing and remitting of the sales taxes, whether eBay does it and charges us a fee, or we do it ourselves and have to purchase software and postage, plus a lot of time, to accomplish the same thing. 

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Yeah, I understand that ... it always amazes me every January that there are sellers that don't know that they have to pay income tax on their eBay sales and have no idea where to get their sales numbers ... 

I collect and remit Sales Tax for my state and will continue to chug along until eBay decides how to handle this.

My speculation is that it will be part of the Adyen rollout, since Adyen is already doing this for Etsy. They already have a process in place for 2 States, so should have no problem expanding it when more states enact their own laws.

And Etsy just raised their FVF by 1.5% ... so I would expect the same here.

[the*dog*ate*my*tablecloth]

Every month there are people posting here that they do not have to pay income tax because they didn’t get a 1099

[penguins_dont_fly]

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@the*dog*ate*my*tablecloth wrote:

Every month there are people posting here that they do not have to pay income tax because they didn’t get a 1099

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Ayup.

Me, I don't mess with the IRS.

I had an issue a few years ago. I rolled over a retirement account and Uncle Sam somehow got the idea that I had done an early withdrawal ... not just once, but twice on the same amount!! (The original bank had merged with another and  both banks reported the transaction ... incorrectly) That was absolutely no fun at all and took almost 8 months to straighten out 😞

I pay estimated tax quarterly and am scrupulous with my bookkeeping. I don't ever want to do that again 🙂

[ted_200]

How many people are closing there stores due to the new sales tax law or are you just going to wait it out to see what happens, Does the law become effective when the supreme court ruled on it or do the states have to enact the law. Thanks

Courts don't make laws.  All that happened so far is the SCOTUS overturned a South Dakota SC decision about a S.D. sales tax law, which is now headed back to S.D. to be relitigated. 

There are a couple of other state sales tax laws that were already on the books and not part of that decision (WA, and PA). 

I think closing anything is premature, this is likely to be litigated and legislated for years to come. 

[thatsallfolks]

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@pburn wrote:
As a true, patriotic American citizen, it is discouraging to me that someone thinks the SCOTUS enacts laws.

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That's partly caused by the overuse of Executive Orders.