Trying to understand sales tax liability...need help.

[funnybookaddict]

I haven't sold anything on eBay for quite a while and before I do I am trying to understand the sales tax collection policies and my responsibility. When I sell something to to a buyer that resides in a state that is a Marketplace Facilitator eBay will collect the tax on my behalf and I do not have to worry about those sales in terms of tax collection but for the states that eBay does not act in that regard (example: Oregon) I must collect the appropriate sales tax based on my states rate ( TN 9.50%).

So, if the above information is correct my question(s) are : Is there an auto generated report that will list the sales tax that I collected? How do I send the sales tax to the appropriate agency in TN? (we are not required to file a state return in Tennessee).

Any help would be appreciated.

[varebelrose]

eBay handles all of it, all you have to do is pay the FVF on the tax the buyer paid.

[simba6]

eBay now collects the sales tax and remits it to the states so, you don't need to worry about that anymore.

High volume sellers may have to file income tax on their profits however.

[funnybookaddict]

That goes for all 50 states?

[Anonymous]

When I sell something to to a buyer that resides in a state that is a Marketplace Facilitator eBay will collect the tax on my behalf

Correct

for the states that eBay does not act in that regard (example: Oregon) I must collect the appropriate sales tax based on my states rate ( TN 9.50%).

Incorrect. No tax is collected at all since sales tax is paid by the buyer, which, in this case, there is none.

How do I send the sales tax to the appropriate agency in TN? 

You don't worry about this, it is taken care of for you

You can look here to see a quick breakdown of fees/taxes on your sales. https://www.ebay.com/sh/performance/sales

[simba6]

Yes. eBay collects for them all now.

[7606dennis]

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@funnybookaddict wrote:

That goes for all 50 states?

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Actually, that is not correct.  States that currently do not have marketplace facilitator laws in place cannot have the taxes collected and remitted by eBay.  While the seller from those states that is registered to collect sales tax in those states can have eBay collect them they would have to remit them to the state themselves.

I'm not sure how many states currently do not have marketplace facilitator laws in place.  There are very few I believe.

Of course, if a seller from one of those states isn't registered to collect the sales tax, the buyer may still be required to pay it directly to the state themselves.

[soh.maryl]

Oregon is one of the 4-5 states that does NOT have a state sales tax.  

[nobody*s_perfect]

When I sell something to to a buyer that resides in a state that is a Marketplace Facilitator eBay will collect the tax on my behalf and I do not have to worry about those sales in terms of tax collection

True

but for the states that eBay does not act in that regard (example: Oregon) I must collect the appropriate sales tax based on my states rate ( TN 9.50%).

Good news! False. You don't need to to anything at all. Sales tax is based on the address that the package is shipped to.

[7606dennis]

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@simba6 wrote:

Yes. eBay collects for them all now.

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Are you sure about that?  I believe that there are a couple of states that do not currently have facilitator laws in place and thus eBay couldn't collect and remit to them unless the seller is registered to collect sales tax in that state.  Even then the seller would have to remit the tax themselves rather than eBay.  

[funnybookaddict]

So is a seller from TN is required to collect taxes from all buyers from states that do not have those laws in place or is the buyer solely responsible?

Sorry in advance for being a bit dense. I used to sell quite a bit but its gotten a lot more complicated.

[mr_lincoln]

@funnybookaddict   I have a PA Sales tax ID and prior the market place laws I was ONLY responsible to collect and remit Sales tax to the State for IN state purchases.  Anything from out of state no taxes were charged.  Once eBay took over collecting taxes the state contacted ALL Tax ID holders that on future State Reporting they were to put ZERO for the amount of IN state sales.  The burden for collecting and remitting switched to eBay. 

I have no other "nexus" in any other state to collect and remit their sales tax, any states that have laws in place to do so rely on the venue (eBay-Etsy-Walmart-Target-Bonanza, etc) to collect and remit those because in all likely hood the venues stand a better chance of meeting each states thresholds for tax collection purposes then individual Sellers.  In this way each state stands a better chance of collecting MORE sales tax then if they relied on individual Selling accounts, many of which have NO nexus anywhere for sales tax purposes.

So, I did nothing different when these laws started to roll in from all the states ... nor have I been contacted by any state that I needed to do something ... so until such time that that changes I simply pay any fees on sales tax when and if it applies (5 states don't have sales tax) and move on ...

[lacemaker3]

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@funnybookaddict wrote:

So is a seller from TN is required to collect taxes from all buyers from states that do not have those laws in place or is the buyer solely responsible?

...

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No, you're not responsible for sales tax from other states.

In general, if the other state has a sales/use tax law, then only sellers in that state are responsible for collecting sales tax (and then only if the Marketplace, ie eBay, isn't collecting it). If the buyer from the other state has a purchase where they didn't pay any sales tax (out of state, for example, but not eBay purchases anymore) then the buyer is responsible for paying use tax on the purchase.

You said that you are in Tennessee:  as of Oct 2020, eBay started collecting sales tax from all purchases that are delivered to a shipping address in Tennessee. So, you don't have to worry even about collecting sales tax from buyers in Tennessee. https://www.ebay.com/help/selling/fees-credits-invoices/taxes-import-charges?id=4121#section3

However, if you used to sell, then it's possible that you might have registered for a sales tax license in TN. If you have a sales tax license in TN, then you may still have to file sales tax reports to TN, depending on how their state legislation is being administered. If you have sales, but didn't have to collect any sales tax, then some states make you file a sort of zero report, so they know you're not just not doing it.

But, you would probably be aware of the requirement, if that were the case, so you probably don't have a TN sales tax license and don't need to do anything.

[funnybookaddict]

Last question.

If no tax needs to be collected or paid for by buyers in states without the MF laws I do not need to fill out the tax tables on eBay? I appreciate everyones help.

[rock.star]

You need do nothing ebay will take care of it all.