What we Need as Members to Enhance the Sales Tax Collection process by Ebay.

[mam98031]

In an effort to assist Ebay in seeing and knowing the issues we see with Ebay collecting sales tax for certain states I thought we could have a discussion about it so that Ebay knows our thoughts and concerns.

This is something Ebay has to do, so that isn’t the issue.  We may not like it, but they still have to adhere to the new laws.  Sellers and some buyers have specific needs that aren’t being met.  These needs have to be addressed as they are important factors.

Ebay is very much aware that there is room for improvement and I believe they are actively working on improving the process.  But just in case they haven’t thought of some issues, this discussion may help.

Here are some of the things I see in no specific order.

1. We need a way to submit our Resale Certificates so that Ebay has them on file.
2. We need a way to flag a purchase on Ebay to be for Resale so that we are not charged Sales Tax.
3. We need a report that shows by state what taxes were collected on our behalf. Some states require us to report this information.  Some of us have to report the full sale amount as a retail sale and then we can take a deduction for that sale because Ebay has taken the sales tax from the customer and remitted it to the appropriate state.  This report needs to give us the ability to get it by date range.  Some of us report to our states monthly, some quarterly and some yearly.  So we need flexibility in the report.

What do you see as an improvement or enhancement specific to Ebay collecting sales tax in various states?

[the*dog*ate*my*tablecloth]

It’s not the people who are only selling on eBay that have the complications. It’s sellers who also sell outside EBay.

And apparently sellers who sell less than 10k to people in MN on eBay but more than 10k outside. But that’s on another thread.

Its a blend of eBay and nonebay sales that make it complex.

[the*dog*ate*my*tablecloth]

But you can set up the listing where only taxable items have sales tax right? For instance MA doesn’t tax clothing. I’m pretty sure I’ve sold clothing here without specifying tax.

[tealt]

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What do you see as an improvement or enhancement specific to Ebay collecting sales tax in various states?

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1)  It is apparent (at least to me) that more eBay seller education is needed. 

There is plenty of confusion and misinformation floating around about MF laws and state sales tax in general.   I've even read more than one post on this board where sellers confuse income taxes and sales taxes.  Other posters don't seem to realize that sales taxes are controlled by states, not the federal government.

And, obviously, each state's approach and requirements for sales tax collection are, different.

EBay needs to provide information to:

a) sellers in specific states with MF laws

b) sellers outside MF states who have sales in those states

EBay's approach to MF so far (at least to me) has been nothing more than "don't worry, we'll take care of it."  For many sellers that just isn't enough. 

2)   EBay needs to let buyers know if they will be charged sales tax on an item--up front, in an obvious place, before checkout.  EBay buyers accustomed to paying sales tax only on in-state purchases, may now be getting a shock when they see a sales tax charge for purchases from MF state sellers.

[lacemaker3]

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@the_fancy_fox wrote:

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@mam98031 wrote:

I think some have misunderstood the intent of the thread.  I'm NOT saying in ANY way that we are going to get anything I've outlined in my OP.  I'm merely asking what others might see that they need or would like to have.  NOTHING more. 

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How about they follow the laws of the state they are collecting for?  I am in California. There are things that should not be charging tax for yet ebay being ebay is broad brushing it and collecting tax on it anyways.

i too want / need a report showing which transactions they collected sales tax on, the date and the amount.

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I'm not sure if you're referring to

1. CA sales tax for purchases being shipped to CA,because the seller has a nexus in CA
    
2. or eBay collects sales tax as a MF for sales being shipped to states with MF sales tax laws.

So I will try to cover both situations, although I think the second one is the most likely to be a concern at this time. But it does appear that eBay is collecting the sales tax correctly by item category (type).

1. eBay doesn't collect sales tax for CA (at the moment), so any tax that is collected will be because you set up the sales tax table on your listings. So it is your responsibility, as the seller, to collect tax on taxable items, and not collect it on items that are not taxable.
    
2. For the states where eBay is collecting sales tax as MF, they are collecting the sales tax based on the primary category the item is listed in.
   For example, in WA, food items are not taxable, but dietary supplements are taxable. If an item (for example, honey) is listed in  Supplements for the first category, and in Food as the second category, it will be subject to sales tax. If it is listed in Food as the first (or only) category, it will not be taxed. Another example: if a sports jersey is listed under Clothing (first or only), it will not be taxed. If it listed under Collectibles(first or only), it is taxable. These are real examples from members who asked about the sales tax here in the community.
   It is possible that eBay may have some categories that are coded incorrectly, but I'm not aware of any at this point. These two examples are the only ones I have seen reported.

[lacemaker3]

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@lacemaker3 wrote:

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@the_fancy_fox wrote:

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@mam98031 wrote:

...

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...

But it does appear that eBay is collecting the sales tax correctly by item category (type).

1. ...
    
2. For the states where eBay is collecting sales tax as MF, they are collecting the sales tax based on the primary category the item is listed in.
   For example, in WA, food items are not taxable, but dietary supplements are taxable. If an item (for example, honey) is listed in  Supplements for the first category, and in Food as the second category, it will be subject to sales tax. If it is listed in Food as the first (or only) category, it will not be taxed. Another example: if a sports jersey is listed under Clothing (first or only), it will not be taxed. If it listed under Collectibles(first or only), it is taxable. These are real examples from members who asked about the sales tax here in the community.
   It is possible that eBay may have some categories that are coded incorrectly, but I'm not aware of any at this point. These two examples are the only ones I have seen reported.

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Too late to edit ... I checked into the sales tax exemptions for sales to WA, and I believe ^^this information^^ is wrong.

It appears that there is conflicting information online about whether clothing sales in WA are taxable or not. eBay recommends Avalara and TaxJar for information, but they contradict each other:

Avalara says "Some goods are exempt from sales tax in Washington regardless of who the buyer is or what the goods will be used for. Examples include most non-prepared food items, everyday clothing items, and medical supplies and drugs."

But TaxJar says "Tangible products are taxable in Washington , with a few exceptions. These exceptions include certain groceries, prescription medicine, sales to nonresidents and newspapers."

So, I went to the Washington State Department of Revenue website, and found that clothing is not exempt from sales tax in Washington. From what I can see looking at one of @the_fancy_fox's listings, it is charging sales tax for clothing, which appears to be correct .

https://dor.wa.gov/find-taxes-rates/retail-sales-tax/retail-sales-and-use-tax-exemptions

However, Dietary Supplements are exempt from tax (under Health-Related Purchases)

@Anonymous, can you check why the Supplement category appears to be incorrectly coded as taxable in WA?

Also, there's a lot of confusion about whether shipping is or is not taxable. From checking on the state websites, shipping is taxable for sales to WA, but shipping is not taxable for sales to IA if the shipping is a separate line item (charged separately, not free shipping). However, eBay is charging sales tax on the shipping for sales to IA.

[mam98031]

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@the*dog*ate*my*tablecloth wrote:

But you can set up the listing where only taxable items have sales tax right? For instance MA doesn’t tax clothing. I’m pretty sure I’ve sold clothing here without specifying tax.

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This question was asked up thread.  The answer is no.  Or if there is a way on Ebay to do this, I have not seen it.  Please provide a link to where you can do this if there is this option.  I'm confident many could use the information.

For me it doesn't matter as everything I sell here is taxable wherever they have a facilitator law.  But for others it could be very important.

[mam98031]

@lacemaker3 

Clothing sales ARE taxable in the state of WA.  Not sure what you may of seen that is a conflict to that, but it IS taxable.

[mam98031]

@lacemaker3 

Also, there's a lot of confusion about whether shipping is or is not taxable. From checking on the state websites, shipping is taxable for sales to WA, but shipping is not taxable for sales to IA if the shipping is a separate line item (charged separately, not free shipping). However, eBay is charging sales tax on the shipping for sales to IA.

For the state of WA, shipping IS taxable IF it is invoiced on the same invoice as the product.  IF shipping is separately billed it is NOT taxable, it can't be on the same invoice as the product, separate line item or not.

[mam98031]

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@mam98031 wrote:

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@the*dog*ate*my*tablecloth wrote:

But you can set up the listing where only taxable items have sales tax right? For instance MA doesn’t tax clothing. I’m pretty sure I’ve sold clothing here without specifying tax.

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This question was asked up thread.  The answer is no.  Or if there is a way on Ebay to do this, I have not seen it.  Please provide a link to where you can do this if there is this option.  I'm confident many could use the information.

For me it doesn't matter as everything I sell here is taxable wherever they have a facilitator law.  But for others it could be very important.

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I should have added.  In the state of WA, shipping supplies that become part of your end product being shipped to your customer is not taxable.  So if there were a feature on Ebay that could turn off sales tax being charged on specific types of items a seller sells, I would think that the seller that sells Ebay shipping supplies would utilize this feature.

[the_fancy_fox]

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AP@lacemaker3 wrote:

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@the_fancy_fox wrote:

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@mam98031 wrote:

I think some have misunderstood the intent of the thread.  I'm NOT saying in ANY way that we are going to get anything I've outlined in my OP.  I'm merely asking what others might see that they need or would like to have.  NOTHING more. 

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How about they follow the laws of the state they are collecting for?  I am in California. There are things that should not be charging tax for yet ebay being ebay is broad brushing it and collecting tax on it anyways.

i too want / need a report showing which transactions they collected sales tax on, the date and the amount.

---

I'm not sure if you're referring to

1. CA sales tax for purchases being shipped to CA,because the seller has a nexus in CA
    
2. or eBay collects sales tax as a MF for sales being shipped to states with MF sales tax laws.

So I will try to cover both situations, although I think the second one is the most likely to be a concern at this time. But it does appear that eBay is collecting the sales tax correctly by item category (type).

1. eBay doesn't collect sales tax for CA (at the moment), so any tax that is collected will be because you set up the sales tax table on your listings. So it is your responsibility, as the seller, to collect tax on taxable items, and not collect it on items that are not taxable.
    
2. For the states where eBay is collecting sales tax as MF, they are collecting the sales tax based on the primary category the item is listed in.
   For example, in WA, food items are not taxable, but dietary supplements are taxable. If an item (for example, honey) is listed in  Supplements for the first category, and in Food as the second category, it will be subject to sales tax. If it is listed in Food as the first (or only) category, it will not be taxed. Another example: if a sports jersey is listed under Clothing (first or only), it will not be taxed. If it listed under Collectibles(first or only), it is taxable. These are real examples from members who asked about the sales tax here in the community.
   It is possible that eBay may have some categories that are coded incorrectly, but I'm not aware of any at this point. These two examples are the only ones I have seen reported.

---

1. Not what I am seeing happening so far. 

Ebays coding messed up.   Nooooooooo really?

[the_fancy_fox]

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@the_fancy_fox wrote:

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AP@lacemaker3 wrote:

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@the_fancy_fox wrote:

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@mam98031 wrote:

I think some have misunderstood the intent of the thread.  I'm NOT saying in ANY way that we are going to get anything I've outlined in my OP.  I'm merely asking what others might see that they need or would like to have.  NOTHING more. 

---

How about they follow the laws of the state they are collecting for?  I am in California. There are things that should not be charging tax for yet ebay being ebay is broad brushing it and collecting tax on it anyways.

i too want / need a report showing which transactions they collected sales tax on, the date and the amount.

---

I'm not sure if you're referring to

1. CA sales tax for purchases being shipped to CA,because the seller has a nexus in CA
    
2. or eBay collects sales tax as a MF for sales being shipped to states with MF sales tax laws.

So I will try to cover both situations, although I think the second one is the most likely to be a concern at this time. But it does appear that eBay is collecting the sales tax correctly by item category (type).

1. eBay doesn't collect sales tax for CA (at the moment), so any tax that is collected will be because you set up the sales tax table on your listings. So it is your responsibility, as the seller, to collect tax on taxable items, and not collect it on items that are not taxable.
    
2. For the states where eBay is collecting sales tax as MF, they are collecting the sales tax based on the primary category the item is listed in.
   For example, in WA, food items are not taxable, but dietary supplements are taxable. If an item (for example, honey) is listed in  Supplements for the first category, and in Food as the second category, it will be subject to sales tax. If it is listed in Food as the first (or only) category, it will not be taxed. Another example: if a sports jersey is listed under Clothing (first or only), it will not be taxed. If it listed under Collectibles(first or only), it is taxable. These are real examples from members who asked about the sales tax here in the community.
   It is possible that eBay may have some categories that are coded incorrectly, but I'm not aware of any at this point. These two examples are the only ones I have seen reported.

---

1. Not what I am seeing happening so far. 

Ebays coding messed up.   Nooooooooo really?

---

Also I looked up the news releases by the BOE in CA and they have it that tax can be collected prior to the April 1st date which raises questions, does /is ebay doing this? Or is it just bad coding?

sellers need documentation! 

[twnpopcards]

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@the_fancy_fox wrote:

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@the_fancy_fox wrote:

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AP@lacemaker3 wrote:

---

@the_fancy_fox wrote:

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@mam98031 wrote:

I think some have misunderstood the intent of the thread.  I'm NOT saying in ANY way that we are going to get anything I've outlined in my OP.  I'm merely asking what others might see that they need or would like to have.  NOTHING more. 

---

How about they follow the laws of the state they are collecting for?  I am in California. There are things that should not be charging tax for yet ebay being ebay is broad brushing it and collecting tax on it anyways.

i too want / need a report showing which transactions they collected sales tax on, the date and the amount.

---

I'm not sure if you're referring to

1. CA sales tax for purchases being shipped to CA,because the seller has a nexus in CA
    
2. or eBay collects sales tax as a MF for sales being shipped to states with MF sales tax laws.

So I will try to cover both situations, although I think the second one is the most likely to be a concern at this time. But it does appear that eBay is collecting the sales tax correctly by item category (type).

1. eBay doesn't collect sales tax for CA (at the moment), so any tax that is collected will be because you set up the sales tax table on your listings. So it is your responsibility, as the seller, to collect tax on taxable items, and not collect it on items that are not taxable.
    
2. For the states where eBay is collecting sales tax as MF, they are collecting the sales tax based on the primary category the item is listed in.
   For example, in WA, food items are not taxable, but dietary supplements are taxable. If an item (for example, honey) is listed in  Supplements for the first category, and in Food as the second category, it will be subject to sales tax. If it is listed in Food as the first (or only) category, it will not be taxed. Another example: if a sports jersey is listed under Clothing (first or only), it will not be taxed. If it listed under Collectibles(first or only), it is taxable. These are real examples from members who asked about the sales tax here in the community.
   It is possible that eBay may have some categories that are coded incorrectly, but I'm not aware of any at this point. These two examples are the only ones I have seen reported.

---

1. Not what I am seeing happening so far. 

Ebays coding messed up.   Nooooooooo really?

---

Also I looked up the news releases by the BOE in CA and they have it that tax can be collected prior to the April 1st date which raises questions, does /is ebay doing this? Or is it just bad coding?

sellers need documentation! 

---

Nothing Ebay gives us will ever be a definitive answer or properly documented on their part because they always like to leave definitions and policies muddied so they can make a case by case decision at a later date - or claim that this is what was meant by what they said.  Anytime you have lawyers designing policies or procedures they will always leave things open to interpretation and this is especially true with Ebay as that gives them a lot of wiggle room down the road.  Even when Updates come out the blues on the announcement boards give conflicting answers which in the long run usually do not get resolved because that is how Ebay prefers things.

I cannot wait until they have to deal with the California Sales Tax authorities and suddenly cannot pull all of their interpretations in each case.  If they do not hire the proper professionals immediately to handle these collections and timely remittances, Ebay is going to wind up in a world of hurt when audit time comes because where Financial Statement audits only state that they represent fairly the position of the company at a given time, there could be  tens of millions of dollars of errors that the auditors will deem immaterial.  But Sales Auditors do not give them that leeway and if they pull a bad sample period when they do the audits, Ebay will get slammed with back taxes and penalties and interest  for things they are used to getting away with on the Financial Statement audits.

The management team has never had any retail experience which continues to show with how they try to maneuver the company from quarter to quarter while watching the growth continue to decrease, so these are going to be all new to them and Sales Tax auditors are usually some of the best out there.

[millcreekrescue909]

EBay is not yet collecting sales tax for California.

[moo*cow*corner]

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@mam98031 wrote:

Clothing sales ARE taxable in the state of WA.  Not sure what you may of seen that is a conflict to that, but it IS taxable.

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As for exempt items, I'd have to hunt the reference, but I do believe that one of the weekly chats kind of addressed the issue. They said they expected the end consumers to know what is exempt in their state, and to pursue refunds of improperly collected sales taxes from their own state taxing authority. Seriously.

I see that they are attempting to put in some specific coding, but that's got to be a monumental Herculean task.

For Iowa, they are now collecting the 6% state sales tax. But nearly every county in Iowa has an additional county tax, and many cities add on even more. Illinois is even worse.

[millcreekrescue909]

Same in California.  In addition to the state tax rate there are district taxes and local taxes.