mam98031 • Volunteer Community Member • Buyer/Seller since 1999
You appear to be confusing a few things.
A sales tax permit is for you to buy things within your state and be exempt from sales tax
In the state you have your business set up in, if you sell something that is delivered within your state, that customer should be charges sales tax by you and remitted to your state. That is likely a law in your state that has been there since the beginning of sales tax.
When you started your little business you should have registered with your state as a business and got a business license. Likely it would be free for a business your size. Then you report your sales to your state, most likely yearly and you claim your total income and state any sales you have had throughout the year that was subject to sales tax within your state. Highly likely you would not owe anything in business taxes due to your size, so you would just need to remit the sales tax due.
Then at the beginning of this year Ebay became LEGALLY responsible to collect and remit sales tax for certain states. However Kansas is not one of the states Ebay is required to collect and remit sales tax on, so it is all on you. You need to make sure you have your Sales Tax schedule properly filled out in your Site Preferences so that tax is charged to those that you sell to with a ship to address within Kansas. There are NO THRESHOLD amounts for this. You are and have been responsible since you started your business to do this for your state.
If you haven't done it in the past. Get your business licenses and start as soon as possible.
Unless your business is also located in Pennsylvania, you have no responsibility to collect and remit sales tax there for any reason. Now or before. And Ebay became responsible for collecting it as of July 1, 2019.
You should read this and digest what it says. Then ask any questions you may have.
https://www.ebay.com/help/selling/fees-credits-invoices/taxes-import-charges?id=4121
We all pretty much call this a Sales Tax issue, but in reality is is a Use Tax when you purchase from out of state or out of country and bring it into your state.
The definition is: Use tax is a sales tax on purchases made outside one's state of residence for taxable items that will be used, stored or consumed in one's state of residence and on which no tax was collected in the state of purchase.
Most states that have a sales tax also have a law regarding Use Tax on the books. The problem is they never found a way to enforce it and most residence were not voluntarily complying. So last year with the Supreme Court overturned some older rulings that prevented taxation of internet sales, states were very excited.
Now these states also have minimum thresholds that a seller need to sell to people within any given state before sales tax / use tax is required. This presented a big problem for states as they knew that a whole lot of potential income for them was being left on the table by the volume of small sellers on various Marketplaces like Ebay.
So the states came up the Marketplace Facilitator Laws [MFLs] that put the onus onto the Marketplace as a whole instead of the individual sellers within the Marketplace. This guaranteed that all sales on the site would qualify for taxation when shipped into a state with an MFL.
@gwzcomps wrote:
I would find a more knowledgeable accountant. Each state has different laws. On a small scale you probably could just slide by and call it a hobby. It is up to you if you want to take that risk though. If you plan on growing things more it might not be a bad idea to setup an LLC.
Even hobby income is suppose to be claimed to IRS when filing income taxes. I realize the OP's questions weren't about IRS, I'm just adding that little comment.
@eastcoastmermaids wrote:I'm located in South Carolina. I have a business license and I am a registered LLC. I pay sales & use and file every year for my state. Pay and file business Personal Property tax too. That's not my confusion. My confusion is the handful of states that are still in flux about just how they are going to go about things. I have read the information on every single state that has information thus far. I will probably just close down. There are no longer many small sellers on eBay, so it's very hard for a large seller to understand why it's hard for us to find the time and funds for this extra stuff. I report my small income from here too, I'm totally compliant with the IRS and the state and those agencies are fun as far as I'm concerned. It's just having to deal with this handful of states and having to register. I am sure there will be fees involved. That's all.
What’s the threshold for economic nexus law in Kansas?
- State: Kansas
- Threshold: There is no exception for small sellers, so all remote sellers with sales in Kansas will meet economic nexus.
- Summary: According to state law, all sellers who make sales into Kansas must register for a tax permit regardless of sales or transactions.
When did this Kansas law go into effect or is it planned?
As of October 1, 2019, all out-of-state sellers making sales for delivery into Kansas are required to register with the Department of Revenue and collect and remit Kansas sales or use tax.
I see that now. IMHO Kansas has placed themselves in a position of legal challenges by many. Not only that they are going to be hard pressed to enforce such a law if it is even legal per the ruling of the Supreme Court. The below link is a pretty good explanation of what Kansas is trying to do.
And you are right they have no economic nexus threshold. It is anyone and everyone that sells to someone inside their state. I can tell you I won't be complying. They can come chase me down. I assure you it will cost them far more $$$$ than I would ever owe them.
A pretty silly move IMHO.
@eastcoastmermaids wrote:I wish I had your moxie! I"m afraid not to register, but I am disgusted. I'm not disgusted about sales tax to other states, I'm disgusted about how wishy washy it has all been. Good luck my friend!
You are succumbing to a bully. It isn't logical that they can or will come after sellers that owe them not even $100 a year in sales taxes. It would cost them 1,000s to do that for ever seller they tried to come after. They would end up bankrupting the system.
Besides, long before that happens, they will get sued and they will change their law. The Supreme Court ruling states that it can NOT be unduly burdensome on small businesses. That is exactly what they are in direct conflict with and that is exactly why states that are clearly smarter than those running Kansas have created MFLs [marketplace facilitator laws].
Oh and how would they even find me???
Do you think residences of Kansas are going to report to the state that they bought something from me? If they were willing to do that, states would have had no reason to get the internet sales tax law overturned via the Supreme Court. Residences of the various states would have been paying their share of use tax all along.
Do you think they will require Ebay and other marketplaces to turn over detail sales records to them without a subpoena or some other legal document? And the list goes one. How are they going to even know??
