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-   -   Supreme Court overturns Quill, subjects all internet transactions to sales tax (http://www.net54baseball.com/showthread.php?t=256539)

Santo10Fan 06-21-2018 09:07 AM

Supreme Court overturns Quill, subjects all internet transactions to sales tax
 
Today is a day many of us have known would come. It was a 5-4 decision. While many giant etailers already collect tax, I feel ebay sellers like many on this board are going to feel the change most. The Post mentions over 11,000 jurisdictions affected-so municipalities will get their taste as well.

KMayUSA6060 06-21-2018 09:20 AM

:mad:

No further comment.

Leon 06-21-2018 09:28 AM

As a small business owner, so far, I want to see how this plays out. There should have already been taxes being collected on many items. A lot of my ebay stuff has sales tax added. All (or almost all) of my Amazon purchases do.

This law could help the small, especially brick and mortar businesses, who get hurt by the current law. We shall see. I am generally never in favor of new taxes otherwise.

frankbmd 06-21-2018 09:33 AM

Fortunately we (Net54) already have this covered

Buy
Sell
Tax


;)

steve B 06-21-2018 09:36 AM

With a small seller, which tax gets charged? Does the sale happen where I am? Where they are?

If I buy something from a seller in NH, which has no sales tax do I pay the MA rate? And if I do, then as it probably works now, the seller gets the MA sales tax and has to file forms to pay it. And probably the forms to be allowed to collect it. Being in NH they probably won't do that, so they benefit by 6.25%
If I sell something to someone in NH, will I have to collect the 6.25% that I'll probably owe Mass?

What a miserable decision. The overhead alone of tracking what's owed to who will probably kill off most small sellers.

Santo10Fan 06-21-2018 09:41 AM

Quote:

Originally Posted by steve B (Post 1788510)
With a small seller, which tax gets charged? Does the sale happen where I am? Where they are?

If I buy something from a seller in NH, which has no sales tax do I pay the MA rate? And if I do, then as it probably works now, the seller gets the MA sales tax and has to file forms to pay it. And probably the forms to be allowed to collect it. Being in NH they probably won't do that, so they benefit by 6.25%
If I sell something to someone in NH, will I have to collect the 6.25% that I'll probably owe Mass?

What a miserable decision. The overhead alone of tracking what's owed to who will probably kill off most small sellers.

As best I can tell, the sales tax charge will be based on the seller's zip code. The burden will then be on the seller to determine if the item falls under state, local and county tax codes.

glchen 06-21-2018 10:33 AM

Quote:

Originally Posted by Santo10Fan (Post 1788511)
As best I can tell, the sales tax charge will be based on the seller's zip code. The burden will then be on the seller to determine if the item falls under state, local and county tax codes.

I think it will be based upon the buyer's ship to zip code, and not the seller's zip code. Therefore, unless ebay changes their software to automatically collect the tax for all sellers, each seller may have to collect tax for all of their buyers and then send these taxes that they collected to all 50 states (or those that have a sales tax), which would be a huge pain. Right now, I only collect tax for buyers in California, and I have to complete a form every year for that. If I have to do that for all 50 states, it would be a tremendous overhead.

Rhotchkiss 06-21-2018 10:37 AM

Have not read the decision -- when is it effective? I mean, by what date do sellers need to charge/buyers need to pay, sales tax?

markf31 06-21-2018 10:53 AM

Quote:

Originally Posted by glchen (Post 1788536)
I think it will be based upon the buyer's ship to zip code, and not the seller's zip code. Therefore, unless ebay changes their software to automatically collect the tax for all sellers, each seller may have to collect tax for all of their buyers and then send these taxes that they collected to all 50 states (or those that have a sales tax), which would be a huge pain. Right now, I only collect tax for buyers in California, and I have to complete a form every year for that. If I have to do that for all 50 states, it would be a tremendous overhead.

I believe you are correct, that the tax would be based on the buyer's ship to zip code.

This case originated out of South Dakota, which enacted a law that required all merchants to collect a 4.5 percent sales tax if they had more than $100,000 in annual sales or more than 200 individual transactions in the state. State officials sued three large online retailers — Wayfair, Overstock.com and Newegg — for violating the law. Those lawsuits led to this decision today.

I would hope that states, as they move forward with this new taxing power, would institute similar statues in regards to which merchants they would require to collect sales tax.... ie annual sales over X number of dollars or Y number of transactions.

AGuinness 06-21-2018 12:54 PM

I wonder what impact this will have on COMC, too...

If the SD law is mirrored by other states, the 200 transactions part would be an easy one to surpass just breaking a single box of cards and selling singles. Could be a few hundred transactions at a total of maybe $100...

glchen 06-21-2018 01:25 PM

The problem with # of transactions in the state (or something similar) is that at the beginning of the year, who knows if you are going to hit that limit. Let's say in a hypothetical case, New York decides that if a seller has 50 or more transactions in that state, you need to collect the sales tax. Based upon my previous sales, I haven't hit 50 in New York before. But then what if by June, you are up to 40 New York sales, so it seems likely you are going to cross the threshold. What are you going to do? You can't retroactively ask those 40 previous New York buyers to cough up sales tax now for the past sales. You'd have to either eat the sales tax amount yourself, or say after sale 49 to New York, try to say that you will no longer sell to New York residents.

bobbyw8469 06-21-2018 02:01 PM

What a nightmare.

brianp-beme 06-21-2018 02:45 PM

And how will this affect Auction House sales...I assume all winners would be paying some sort of sales tax. Even more pain on top of hammer price painl for the buyer, an extreme hassle for the auction house (if sales tax is to directed to state of buyer).

Brian

egbeachley 06-21-2018 02:46 PM

It’s not only having to collect and remit the sales taxes for the 45 states that have it, and fill out all those forms, but for many cities and counties too. That’s why the number is 11,000 jurisdictions.

The worst part is the rules. For cards they may be simple. But I saw how in one particular state you must collect sales tax for Snickers, but not Twix, because Twix has flour in it and can be considered food, not candy.

AGuinness 06-21-2018 02:48 PM

Quote:

Originally Posted by egbeachley (Post 1788645)
The worst part is the rules. For cards they may be simple. But I saw how in one particular state you must collect sales tax for Snickers, but not Twix, because Twix has flour in it and can be considered food, not candy.


That is hilarious. What a world we live in!



Sent from my iPhone using Tapatalk

BobC 06-21-2018 03:05 PM

Quote:

Originally Posted by Leon (Post 1788504)
As a small business owner, so far, I want to see how this plays out. There should have already been taxes being collected on many items. A lot of my ebay stuff has sales tax added. All (or almost all) of my Amazon purchases do.

This law could help the small, especially brick and mortar businesses, who get hurt by the current law. We shall see. I am generally never in favor of new taxes otherwise.

Leon,

These aren't NEW taxes. States have had Sales AND Use tax laws in effect so that if the seller isn't required to collect the Sales tax, the buyer is supposed to report and pay the comparable Use tax on what they purchased. Very few people voluntarily do this. Just look back at the threads where people complain about having to pay Sales taxes on auction winnings from some AHs and not others.

It is exactly because of all those people that have not followed the law and properly calculated and paid the Use tax on their online and other such purchases that the states have had to resort to finally going after the large online retailers to make them start collecting it. To try going after all the individual buyers would be unbelievably complicated, difficult, and most likely political suicide for any state politicians who tried to get that going and backed such a plan. By going after the big online retailers instead, the states can get more revenue all at once than they would by trying to go after each individual buying online. And even though the individual consumers/buyers would still end up ultimately paying the sales taxes, the states and politicians have a little more cushion and less direct anger by not going directly against the individual buyers themselves.

On the state's side of things, as more and more people switch to online/internet buying, the states are losing out on Sales tax revenue they used to get from the brick and mortar stores. It is also helping to more quickly kill off many brick and mortar stores as they can't compete with online retailer prices. When the buyers know they aren't going to get charged Sales tax from an online vendor but, if they buy the exact same item from a store down the street from where they live, they know they are going to get charged sales tax at the store. So guess where the buyer is more likely to make their purchase from, especially the higher the price of the item they are looking to buy?

All the states are trying to do is figure out how to best get the current laws on their books complied with by the buyers, the majority of whom seem to always be trying to figure out how to get around paying Sales or Use taxes they actually owe.

Leon 06-21-2018 03:32 PM

We can play semantics all you want. It's taxes being collected that weren't before. Maybe they shoulda, coulda, woulda, but they weren't.
But again, please call it whatever you want to. As I said, I think it could help some small brick and mortar retail sales stores and they are the ones that seem to be hit hardest by the internet sales tax avoidance issues.


Quote:

Originally Posted by BobC (Post 1788652)
Leon,

These aren't NEW taxes. States have had Sales AND Use tax laws in effect so that if the seller isn't required to collect the Sales tax, the buyer is supposed to report and pay the comparable Use tax on what they purchased. Very few people voluntarily do this. Just look back at the threads where people complain about having to pay Sales taxes on auction winnings from some AHs and not others.

It is exactly because of all those people that have not followed the law and properly calculated and paid the Use tax on their online and other such purchases that the states have had to resort to finally going after the large online retailers to make them start collecting it. To try going after all the individual buyers would be unbelievably complicated, difficult, and most likely political suicide for any state politicians who tried to get that going and backed such a plan. By going after the big online retailers instead, the states can get more revenue all at once than they would by trying to go after each individual buying online. And even though the individual consumers/buyers would still end up ultimately paying the sales taxes, the states and politicians have a little more cushion and less direct anger by not going directly against the individual buyers themselves.

On the state's side of things, as more and more people switch to online/internet buying, the states are losing out on Sales tax revenue they used to get from the brick and mortar stores. It is also helping to more quickly kill off many brick and mortar stores as they can't compete with online retailer prices. When the buyers know they aren't going to get charged Sales tax from an online vendor but, if they buy the exact same item from a store down the street from where they live, they know they are going to get charged sales tax at the store. So guess where the buyer is more likely to make their purchase from, especially the higher the price of the item they are looking to buy?

All the states are trying to do is figure out how to best get the current laws on their books complied with by the buyers, the majority of whom seem to always be trying to figure out how to get around paying Sales or Use taxes they actually owe.


BobC 06-21-2018 03:58 PM

Quote:

Originally Posted by Leon (Post 1788669)
We can play semantics all you want. It's taxes being collected that weren't before. Maybe they shoulda, coulda, woulda, but they weren't.
But again, please call it whatever you want to. As I said, I think it could help some small brick and mortar retail sales stores and they are the ones that seem to be hit hardest by the internet sales tax avoidance issues.

Leon,

Not sure I'd call it semantics but, as a small business owner yourself, I understand where you are coming from and what you mean by it. Though the Sales and Use taxes themselves aren't new taxes per se, what is new is who they are now going to look to for going after and collecting these taxes, and then sending the money to the state. The actual sales tax doesn't come out of your pocket but, the hassle, work, time and expense of collecting and remitting it to the state is now possibly on you and other small business owners, as well as the big online retailers. I understand exactly where you are coming from. It's potentially new tax compliance requirements on small sellers like yourself, not new taxes.

savedfrommyspokes 06-21-2018 04:49 PM

Quote:

Originally Posted by glchen (Post 1788536)
I think it will be based upon the buyer's ship to zip code, and not the seller's zip code. Therefore, unless ebay changes their software to automatically collect the tax for all sellers, each seller may have to collect tax for all of their buyers and then send these taxes that they collected to all 50 states (or those that have a sales tax), which would be a huge pain. Right now, I only collect tax for buyers in California, and I have to complete a form every year for that. If I have to do that for all 50 states, it would be a tremendous overhead.


If ebay is able to change their software to both collect and report collections for each state, from there submitting will be a much more manageable task. For my state, I self track my in-state sales and submit one form at year end. It takes me longer to find my password to access my on-line state tax site than it does to submit my taxes. Last year it was less than a 5 min process total to submit for my state. So if ebay automatically tracked and provided a record of all of the annual collections for each state, and each state is as simple as my state, this whole process would probably take no more than an additional 4-5 hours per year.

In regards to increased costs to card collectors, just like every other added cost, sales tax will just get figured into the price. A $3k card will still be a $3k card, now just 5-8% off the price will go to the buyer's state.

I see a whole new venture for online sales tax management.

JustinD 06-21-2018 09:59 PM

I would doubt eBay has any need to change software, I can not see where that line of thinking is coming from. Much like why you do not charge sales tax at a garage sale, future laws should in all cases not affect a occasional seller on eBay.

As was quoted earlier South Dakota brought this forth will a set of guidelines that the seller have 100k in business or a minimum of 200 transactions. To take it lower as was theorized earlier would be a enforcement nightmare, the states see this as some cash cow, but will soon find the costs of an enforcement group for this will outpace easily the rewards against crossstate small sellers.

This is for large internet sellers and companies.

I would assume that if you are an eBay seller that is big enough to be going after as a state agency and have it think there is a reward in it, you are either already collecting it or known this was coming eventually because you have been using this income on your 1040 as a job.

rats60 06-22-2018 06:04 AM

Quote:

Originally Posted by JustinD (Post 1788819)
I would doubt eBay has any need to change software, I can not see where that line of thinking is coming from. Much like why you do not charge sales tax at a garage sale, future laws should in all cases not affect a occasional seller on eBay.

As was quoted earlier South Dakota brought this forth will a set of guidelines that the seller have 100k in business or a minimum of 200 transactions. To take it lower as was theorized earlier would be a enforcement nightmare, the states see this as some cash cow, but will soon find the costs of an enforcement group for this will outpace easily the rewards against crossstate small sellers.

This is for large internet sellers and companies.

I would assume that if you are an eBay seller that is big enough to be going after as a state agency and have it think there is a reward in it, you are either already collecting it or known this was coming eventually because you have been using this income on your 1040 as a job.

I don't think you will see states going after small retailers. It took South Dakota's levels to get 5 votes in the Supreme Court. Anthony Kennedy, who was the driver of this case, praised South Dakota for taking a moderate approach. He also pointed out that states may not place undue burden on interstate commerce. Trying to collect sales tax on every online sale with individuals would certainly fit. Probstein and PWCC will be affected. Most eBay sellers will not.

JustinD 06-22-2018 07:39 AM

Quote:

Originally Posted by rats60 (Post 1788860)
I don't think you will see states going after small retailers. It took South Dakota's levels to get 5 votes in the Supreme Court. Anthony Kennedy, who was the driver of this case, praised South Dakota for taking a moderate approach. He also pointed out that states may not place undue burden on interstate commerce. Trying to collect sales tax on every online sale with individuals would certainly fit. Probstein and PWCC will be affected. Most eBay sellers will not.

Totally agree on the point with small retailers,

The case was pushed because of Wayfair.com. Those are the folks in the crosshairs, retailers that have millions in sales and only charge tax in states of operations.

Brian Van Horn 06-22-2018 07:44 AM

1 Attachment(s)
My initial reaction before loopholes:

steve B 06-22-2018 10:07 AM

Quote:

Originally Posted by BobC (Post 1788652)
Leon,

These aren't NEW taxes. States have had Sales AND Use tax laws in effect so that if the seller isn't required to collect the Sales tax, the buyer is supposed to report and pay the comparable Use tax on what they purchased. Very few people voluntarily do this. Just look back at the threads where people complain about having to pay Sales taxes on auction winnings from some AHs and not others.

It is exactly because of all those people that have not followed the law and properly calculated and paid the Use tax on their online and other such purchases that the states have had to resort to finally going after the large online retailers to make them start collecting it. To try going after all the individual buyers would be unbelievably complicated, difficult, and most likely political suicide for any state politicians who tried to get that going and backed such a plan. By going after the big online retailers instead, the states can get more revenue all at once than they would by trying to go after each individual buying online. And even though the individual consumers/buyers would still end up ultimately paying the sales taxes, the states and politicians have a little more cushion and less direct anger by not going directly against the individual buyers themselves.

On the state's side of things, as more and more people switch to online/internet buying, the states are losing out on Sales tax revenue they used to get from the brick and mortar stores. It is also helping to more quickly kill off many brick and mortar stores as they can't compete with online retailer prices. When the buyers know they aren't going to get charged Sales tax from an online vendor but, if they buy the exact same item from a store down the street from where they live, they know they are going to get charged sales tax at the store. So guess where the buyer is more likely to make their purchase from, especially the higher the price of the item they are looking to buy?

All the states are trying to do is figure out how to best get the current laws on their books complied with by the buyers, the majority of whom seem to always be trying to figure out how to get around paying Sales or Use taxes they actually owe.

So if I get back to selling off my extra stuff, I should bear the burden of
A) Figuring out what your state tax is
B) Finding out if you have a county and /or city sales tax
C) Filing paperwork with possibly multiple agencies and paying multiple agencies whatever that tax comes out to.
D) figuring out how to pay them, because I'm sure some will only take electronic payments and filings, others will want hard copies, etc.

Because it's "too unbelievably complicated/ difficult" for the state to handle their own tax collection in THEIR state?
Hey, how about we just make sure that every store makes the customer total their own sale, and handle their own paying, and if it's cash make their own change. Cause, you know all that stuff about getting paid is just way too hard.....

So if I sell a couple 1981 Topps commons to someone, it looks like I'll have a couple hours of overhead. Because politicians and their relatives they've made tax collectors are too lazy.

The only local card shops that have survived are the ones that are good at using the internet. That's true for a lot of small businesses.
This won't help brick and mortar at all, and I believe it will essentially shut down many small businesses especially ones that deal in hobby stuff.

ValKehl 06-22-2018 10:49 AM

Quote:

Originally Posted by rats60 (Post 1788860)
I don't think you will see states going after small retailers. It took South Dakota's levels to get 5 votes in the Supreme Court. Anthony Kennedy, who was the driver of this case, praised South Dakota for taking a moderate approach. He also pointed out that states may not place undue burden on interstate commerce. Trying to collect sales tax on every online sale with individuals would certainly fit. Probstein and PWCC will be affected. Most eBay sellers will not.

Sorry to be a contrarian, but unfortunately, I suspect that in the not too distant future, we will see eBay adding sales tax to ALL invoices from ALL sellers, except for purchasers who are exempt because they are resellers. Being a huge organization, it should not be difficult for eBay to do this. eBay would transfer the sales tax info to PayPal so that PayPay can collect the taxes and remit them periodically to all the state and local jurisdictions on behalf of ALL the eBay sellers. Being a huge organization, it should not be difficult for PayPal to accomplish this. While eBay sellers will thus not be burdened, I assume that eBay and/or PayPal will increase their fees to sellers for handling the sales tax collections and remittances.

keithsky 06-22-2018 10:50 AM

Just another way to generate more money for the stinking politicians and their pork projects

Santo10Fan 06-22-2018 10:52 AM

Quote:

Originally Posted by brianp-beme (Post 1788643)
And how will this affect Auction House sales...I assume all winners would be paying some sort of sales tax. Even more pain on top of hammer price painl for the buyer, an extreme hassle for the auction house (if sales tax is to directed to state of buyer).

Brian

This reminds me that Heritage, who has a physical presence in Illinois, charged me sales tax before and it was at the rate of it's office address in Chicago. The levy was significant-over $200.

Santo10Fan 06-22-2018 11:04 AM

Quote:

Originally Posted by ValKehl (Post 1788935)
Sorry to be a contrarian, but unfortunately, I suspect that in the not too distant future, we will see eBay adding sales tax to ALL invoices from ALL sellers, except for purchasers who are exempt because they are resellers. Being a huge organization, it should not be difficult for eBay to do this. eBay would transfer the sales tax info to PayPal so that PayPay can collect the taxes and remit them periodically to all the state and local jurisdictions on behalf of ALL the eBay sellers. Being a huge organization, it should not be difficult for PayPal to accomplish this. While eBay sellers will thus not be burdened, I assume that eBay and/or PayPal will increase their fees to sellers for handling the sales tax collections and remittances.

I concur with this sentiment, and I do have some evidence to back it up. On May 31, I received an email from ebay asking me to sign a useless petition-the "last chance" to "make my voice heard". I disregarded it as absurd, since the Supreme Court makes decisions based on reasoned argument-not whining. It got my radar up however, because I forgot the Court was considering it, and I realized ebay had a dog in the fight in the from of seller backlash. Considering how expensive it is do business on ebay, combined with the risks-I firmly believe it is the administrators' responsibility to integrate the new tax initiatives into the site.

Santo10Fan 06-22-2018 11:10 AM

Quote:

Originally Posted by Rhotchkiss (Post 1788537)
Have not read the decision -- when is it effective? I mean, by what date do sellers need to charge/buyers need to pay, sales tax?

I assume Supreme Court decisions are effective immediately. South Dakota may be able to retroactively collect from the time the court case began. But if the SC overturns a criminal conviction, that person is freed pronto. If anyone sees sales tax crop up on ebay seller/buyer invoices this week please let me know.

rats60 06-22-2018 11:17 AM

Quote:

Originally Posted by ValKehl (Post 1788935)
Sorry to be a contrarian, but unfortunately, I suspect that in the not too distant future, we will see eBay adding sales tax to ALL invoices from ALL sellers, except for purchasers who are exempt because they are resellers. Being a huge organization, it should not be difficult for eBay to do this. eBay would transfer the sales tax info to PayPal so that PayPay can collect the taxes and remit them periodically to all the state and local jurisdictions on behalf of ALL the eBay sellers. Being a huge organization, it should not be difficult for PayPal to accomplish this. While eBay sellers will thus not be burdened, I assume that eBay and/or PayPal will increase their fees to sellers for handling the sales tax collections and remittances.

I don't see that ever happening. Why would EBay want to destroy their business? Why would they want to take on an unnecessary burden? If they force all sellers to charge sales tax when 90%+ don't need to, most of those sellers will leave. I collect sales tax on sales within my state and send it to them. In the unlikely event I need to do it for other states I will. I will not charge people sales tax on items they don't need to pay it on.

This decision is aimed at large resellers like Warfare, who hurt small business by not charging sales tax and states who have seen revenue decrease because of large online retailers. It is not aimed at trying to collect on every single sale, even if it is an individual selling an used item that they no longer have need of.

rats60 06-22-2018 11:20 AM

Quote:

Originally Posted by Santo10Fan (Post 1788944)
I assume Supreme Court decisions are effective immediately. South Dakota may be able to retroactively collect from the time the court case began. But if the SC overturns a criminal conviction, that person is freed pronto. If anyone sees sales tax crop up on ebay seller/buyer invoices this week please let me know.

The South Dakota law says that they can't collect tax retroactively. The Supreme Court pointed this out in their decision as a point to their law being resonable and not placing an undue burden on retailers.

markf31 06-22-2018 11:42 AM

It is interesting to note, as I just am finding out myself while reading articles on all if this, that several states including my home state of Pennsylvania (also Oklahoma, and Washington at least) have Marketplace Facilitator Laws in place. Pennsylvania's just went into effect April of this year.

The Marketplace Facilitator Law for PA requires facilitator sites such as Etsy, Ebay and Amazon to either collect sales tax on items purchased by PA residents, or in lieu of collecting the tax the facilitator must supply a notice to the purchaser that sales tax was not collected and that a use tax might be due on the sale by the purchaser. If the facilitator elects the 2nd method of notification, the facilitator must submit to the state an annual report by January 31 of each year to the Pennsylvania Department of Revenue that includes the following:

The purchaser’s name, billing address, delivery address and, if different, the purchaser’s last known mailing address.
The total dollar amount of purchases from this marketplace facilitator.
The name and address of the marketplace facilitator that made the sale.

Each failure to comply with the notice and reporting requirements can result in a penalty of $20,000 per violation, per year, or 20 percent of total Pennsylvania sales during the previous 12 months, whichever is less.

Marketplace Facilitators

So Pennsylvania now has a law on the books, but where the state will now know from information provided by Ebay, Etsy, etc.. how much every resident of Pennsylvania paid for items bought through 3rd part facilitators.

drcy 06-22-2018 11:56 AM

What will be interesting is the competitive imbalance and state politics due to differing state sales tax rates. Here in Washington State, there is no state income tax but a high sales tax.

cardsnstuff 06-22-2018 03:00 PM

Quote:

Originally Posted by markf31 (Post 1788959)
It is interesting to note, as I just am finding out myself while reading articles on all if this, that several states including my home state of Pennsylvania (also Oklahoma, and Washington at least) have Marketplace Facilitator Laws in place. Pennsylvania's just went into effect April of this year.

The Marketplace Facilitator Law for PA requires facilitator sites such as Etsy, Ebay and Amazon to either collect sales tax on items purchased by PA residents, or in lieu of collecting the tax the facilitator must supply a notice to the purchaser that sales tax was not collected and that a use tax might be due on the sale by the purchaser. If the facilitator elects the 2nd method of notification, the facilitator must submit to the state an annual report by January 31 of each year to the Pennsylvania Department of Revenue that includes the following:

The purchaser’s name, billing address, delivery address and, if different, the purchaser’s last known mailing address.
The total dollar amount of purchases from this marketplace facilitator.
The name and address of the marketplace facilitator that made the sale.

Each failure to comply with the notice and reporting requirements can result in a penalty of $20,000 per violation, per year, or 20 percent of total Pennsylvania sales during the previous 12 months, whichever is less.

Marketplace Facilitators

So Pennsylvania now has a law on the books, but where the state will now know from information provided by Ebay, Etsy, etc.. how much every resident of Pennsylvania paid for items bought through 3rd part facilitators.

I'm in PA too; in simple terms, what does this mean for me as an ebay seller?

BosseFieldBoy 06-22-2018 05:18 PM

Goodbye Quill
 
I’m a very small time seller, so I’m guessing I will be exempt from many states’ sales tax laws. But I’m not really sure what to do at this point. I’m guessing most states have de minimus exemptions, but that’s just an assumption. Does anyone know a quick hit resource of state sales taxes and exemptions?

Brian Van Horn 06-22-2018 05:47 PM

1 Attachment(s)
Well, I just got around to scanning through the PDF of the decision and now I am going out to reset my eyeballs to their original positions. My reaction hasn't changed pending loopholes:

PowderedH2O 06-22-2018 05:59 PM

It seems as though it would have to be based upon the seller's location. How much of Wayfair's sales would be in South Dakota? SD would want a piece of the pie for the sales going out of the state I would think.

cmoore330 06-22-2018 09:12 PM

As a collector that solely relies on the internet to find my items, I’m not a fan of the change.

As a person that solely relies on sales tax to pay my local government salary, I’m a big fan of the change.

It’s an enigma wrapped in a paradox and shrouded in a conundrum. :)

Brian Van Horn 06-22-2018 11:43 PM

I love this part of the ruling which is just going to open a wonderful can of worms:

"(d) In the absence of Quill and Bellas Hess, the first prong of the Complete Auto test simply asks whether the tax applies to an activity with a substantial nexus with the taxing State, 430 U. S., at 279. Here, the nexus is clearly sufficient. The Act applies only to sellers who engage in a significant quantity of business in the State, and respondents are large, national companies that undoubtedly maintain an extensive virtual presence. Any remaining claims regarding the Commerce Clause’s application in the absence of Quill and Bellas Hess may be addressed in the first instance on remand. Pp. 22–23."

This isn't the last word. This is just the commercial break after the first quarter of this football game.

barrysloate 06-23-2018 04:10 AM

What about sales on BST? Hmmm...

Brian Van Horn 06-23-2018 08:09 AM

Quote:

Originally Posted by barrysloate (Post 1789112)
What about sales on BST? Hmmm...

:D

Oy!

Well, at least there is one politician chiming in with a viewpoint I support (admittedly a bit of grandstanding):

http://www.4-traders.com/WAYFAIR-INC...fair-26812903/

It should be interesting how this plays out and the way the herding of cats will be resolved.

TaxMechanick 06-23-2018 08:55 AM

Supreme Court Overturns Quil/ Sales Tax
 
It does not appear to me that every small retailer, with limited sales in most jurisdictions, will necessarily be burdened with having to collect and remit sales tax in all jurisdictions. It appears to me that the Wayfair decision serves to support an "economic" nexus standard already employed by many jurisdictions, and potentially now to be employed by many more. This economic standard is often based on a minimal $ amount or based on # of transactions in a given year. For example, North Dakota (Wayfair case) employs a minimal $ amount of $100,000 of economic sales in the state. So, the threshold is and would be measured jurisdiction by jurisdiction.

Prior to this decision, the Quill case had supported the long standing Hess case decision that there must be some sort of "physical presence" in a jurisdiction (state or local) in order for that jurisdiction to force a seller to collect and remit sales tax as a defined "retailer." The Wayfair decision reverses that exclusive requirement of physical nexus, and gives jurisdictions the ability (by Supreme Court "National" applicability) to employ minimal economic nexus standards.

Brian Van Horn 06-23-2018 09:05 AM

Quote:

Originally Posted by TaxMechanick (Post 1789153)
It does not appear to me that every small retailer, with limited sales in most jurisdictions, will necessarily be burdened with having to collect and remit sales tax in all jurisdictions. It appears to me that the Wayfair decision serves to support an "economic" nexus standard already employed by many jurisdictions, and potentially now to be employed by many more. This economic standard is often based on a minimal $ amount or based on # of transactions in a given year. For example, North Dakota (Wayfair case) employs a minimal $ amount of $100,000 of economic sales in the state. So, the threshold is and would be measured jurisdiction by jurisdiction.

Prior to this decision, the Quill case had supported the long standing Hess case decision that there must be some sort of "physical presence" in a jurisdiction (state or local) in order for that jurisdiction to force a seller to collect and remit sales tax as a defined "retailer." The Wayfair decision reverses that exclusive requirement of physical nexus, and gives jurisdictions the ability (by Supreme Court "National" applicability) to employ minimal economic nexus standards.

"So, the threshold is and would be measured jurisdiction by jurisdiction." That is where it gets messy.

TaxMechanick 06-23-2018 09:26 AM

Wayfair Supreme Court Decision/ Sales Tax
 
Brian, yes indeed! Some jurisdictions have a much lower threshold than the ND $100,000 threshold. Here's something I located online for states with "current" thresholds...$10,000 is lowest $ threshold (i.e. PA and Washington State), $500,000 is the highest. Some states base it on # transactions.

https://blog.taxjar.com/economic-nexus-laws/

Obviously, the Wayfair decision opens it up for jurisdictions that employ current standards to consider new economic and marketplace thresholds, as well as additional jurisdictions employing new such standards.

Glenn

chalupacollects 06-23-2018 09:34 AM

Quote:

Originally Posted by barrysloate (Post 1789112)
What about sales on BST? Hmmm...

You mean trades? Lol...

steve B 06-23-2018 08:47 PM

Just a thought, there's enough junk wax out there that if enough people started selling it card by card repeatedly the volume of sales would pretty much cripple the systems the states use to collect the tax.

Exhibitman 06-24-2018 10:19 AM

Quote:

Originally Posted by Leon (Post 1788504)
As a small business owner, so far, I want to see how this plays out. There should have already been taxes being collected on many items. A lot of my ebay stuff has sales tax added. All (or almost all) of my Amazon purchases do.

This law could help the small, especially brick and mortar businesses, who get hurt by the current law. We shall see. I am generally never in favor of new taxes otherwise.

I agree with all except the last sentence: this is not the enactment of a new tax. This is a court ruling overturning a prior court ruling that banned the enforcement of an existing tax. Nor does it inflict a new burden on the buyer. If your state collects sales tax you are supposed to pay a corresponding use tax on anything you bring into the state untaxed. It is supposed to equalize the playing field for local businesses. Fact is, most people don't bother to pay the use tax, they just blow it off, so it feels like a new tax. But it isn't.

Where the real new tax will come is when Congress enacts a value added tax (VAT) on each level of sale, which exists in virtually all other Western nations.

Exhibitman 06-24-2018 10:25 AM

Quote:

Originally Posted by steve B (Post 1789312)
Just a thought, there's enough junk wax out there that if enough people started selling it card by card repeatedly the volume of sales would pretty much cripple the systems the states use to collect the tax.

No, that is incorrect. The sales tax system is self-reporting: the merchant calculates, collects and remits with a tax return the merchant prepares. The harder it is to calculate and track the more trouble it is for the merchant and the more likely the merchant will mess up and owe penalties and interest. Having to collect tax on interstate and intrastate sales will actually be a relief for some businesses because there will no longer be a need to keep track of as many forms of sales. Right now, they have to track sales by jurisdiction and make intra v inter state calculations.

TaxMechanick 06-24-2018 10:37 AM

Wayfair Decision/ Sales Tax
 
I agree with everything Adam just said.

Glenn

Leon 06-24-2018 12:10 PM

Below what I had said, I said I know it was not a new tax. But in reality *(as in really paying) it is for a lot of people. As you might remember I sold computers and services for many years. I fought this issue many, many years ago when I sold out of a brick and mortar and the internet popped up. I was at an immediate tax disadvantage. At that time, this mess was just starting and usury taxes weren't as talked about as they have been since then, at least from what I remember in pre-internet sales days.


Quote:

Originally Posted by Exhibitman (Post 1789432)
I agree with all except the last sentence: this is not the enactment of a new tax. This is a court ruling overturning a prior court ruling that banned the enforcement of an existing tax. Nor does it inflict a new burden on the buyer. If your state collects sales tax you are supposed to pay a corresponding use tax on anything you bring into the state untaxed. It is supposed to equalize the playing field for local businesses. Fact is, most people don't bother to pay the use tax, they just blow it off, so it feels like a new tax. But it isn't.

Where the real new tax will come is when Congress enacts a value added tax (VAT) on each level of sale, which exists in virtually all other Western nations.


steve B 06-25-2018 11:53 AM

Quote:

Originally Posted by Exhibitman (Post 1789433)
No, that is incorrect. The sales tax system is self-reporting: the merchant calculates, collects and remits with a tax return the merchant prepares. The harder it is to calculate and track the more trouble it is for the merchant and the more likely the merchant will mess up and owe penalties and interest. Having to collect tax on interstate and intrastate sales will actually be a relief for some businesses because there will no longer be a need to keep track of as many forms of sales. Right now, they have to track sales by jurisdiction and make intra v inter state calculations.

Massachusetts requires reporting sales anywhere annually to monthly depending on sales. 1201 makes it monthly. The form is pretty simple, but at least when I had a resale number filing electronically was required. Nobody is required to file/pay earlier, but I think they're ok with getting paid more often.
In 2 years I had no in-state sales.

I was mostly kidding about the junk wax, I was picturing them trying to work out a few million individual .01 sales.

One of the places I used to go got in trouble - not a lot, but trouble- because they included the tax in the item price. Not bad if you've got 10 things at $1 back when the rate was 5%. But with odd amounts and rounding if you do that you collect more tax than you should.

tschock 06-26-2018 10:13 AM

One wonders....

Understood that as a resident of a state with a sales tax, it was always my obligation to report unpaid taxes from out-of-state purchases to the state, but it is now making all internet sellers (barring thresholds), as agents of the state, to now collect and supply those out-of-state taxes to the state. This will put undue burden more on small businesses rather than larger ones.
  • As many sellers opt out of selling outside the US, will they now decide to opt out of selling to certain state residents (with overly burdensome/intricate regulations)?
  • Will a new balance shift back to brick-and-mortar merchants for certain items? For example, would a Wilmington, DE B&M merchant have an unfair advantage for selling furniture since they don't have the same burden to even process paperwork for out-of-state buyers?

barrysloate 06-26-2018 10:41 AM

Every year I send $39 to Early American Coppers, an organization of large cent collectors, for my yearly dues. This week they sent me an invoice for $42.46. No, the rates didn't go up, but they did add $3.46 tax to my bill. Imagine paying sales tax on membership dues. My first experience with the new law.

tschock 06-26-2018 10:48 AM

Quote:

Originally Posted by barrysloate (Post 1789955)
Every year I send $39 to Early American Coppers, an organization of large cent collectors, for my yearly dues. This week they sent me an invoice for $42.46. No, the rates didn't go up, but they did add $3.46 tax to my bill. Imagine paying sales tax on membership dues. My first experience with the new law.

Here's your second. In some states, dues and other services are subject to sales tax. ;)

barrysloate 06-26-2018 11:31 AM

Quote:

Originally Posted by tschock (Post 1789958)
Here's your second. In some states, dues and other services are subject to sales tax. ;)

We'll soon find out who charges and who doesn't.

Exhibitman 06-26-2018 11:40 AM

Quote:

Originally Posted by tschock (Post 1789949)
One wonders....

Understood that as a resident of a state with a sales tax, it was always my obligation to report unpaid taxes from out-of-state purchases to the state, but it is now making all internet sellers (barring thresholds), as agents of the state, to now collect and supply those out-of-state taxes to the state. This will put undue burden more on small businesses rather than larger ones.

I disagree. As a small business owner I already am registered with the state for sales and use tax reporting. I am already required to collect, report and remit sales/use tax. As it stands right now I have to track different types of sales. It will be easier just to slap a tax on every sale than to differentiate intrastate and interstate sales. My tax return just got a lot simpler. Or it will once the states react to the ruling and rejigger their rules, forms and practices to meet the new standard.

BobC 06-26-2018 12:08 PM

Quote:

Originally Posted by barrysloate (Post 1789955)
every year i send $39 to early american coppers, an organization of large cent collectors, for my yearly dues. This week they sent me an invoice for $42.46. No, the rates didn't go up, but they did add $3.46 tax to my bill. Imagine paying sales tax on membership dues. My first experience with the new law.

And it is not just rates for sales tax that may vary by state and jurisdiction, each states has different rules and things they may tax for sales tax purposes, like dues in the state in Barry resides in.

I'm in Ohio and sales tax here is also on things like snow removal, exterminator services, physical fitness facility services, laundry and dry cleanings service, etc. The one fairly constant though among all states collecting sales tax is that it is collected on the sale of tangible personnel property to final users/consumers. In other words, baseball cards you buy as a collector are always going to be subject to sales tax. If you buy cards as a dealer and intend to resell them, your purchase would then not be subject to sales tax but, you would instead have to charge sales tax to whomever you sell those cards to, unless it is also another dealer going to resell them.

I've heard of people that will print off a sales tax exemption certificate from online and fill it out and then give it to an auction house or dealer they are buying cards from so as not to have to pay the sales tax by claiming they are a dealer themselves and going to resell the cards. Good luck if they ever get caught.

BobC 06-26-2018 12:25 PM

Quote:

Originally Posted by PowderedH2O (Post 1789048)
It seems as though it would have to be based upon the seller's location. How much of Wayfair's sales would be in South Dakota? SD would want a piece of the pie for the sales going out of the state I would think.

Sales tax is normally based on where the actual sale takes place. If it is at an actual brick and mortar store, that is the location used for the sale and to determine the sales tax on, even if the person doing the buying is from another state or country. This is exactly why states will work together and police businesses across the borders from one another, so people from one state don't cross the state line to buy something like furniture from a business in the next state that isn't responsible to collect and remit the sales tax from the neighboring state the buyers are from. To get around the sales tax, the people would have the purchase shipped to them in their state and not pick it up at the store location because doing so would make them subject to paying the sales tax in the neighboring state where the store is actually located.

When it comes to sales transacted over the internet and by mail/delivery service, the sale is considered to tax place and be subject to the sales tax at the point where the buyer takes delivery and acquires the goods. In other words, at the house/location the purchased items are shipped to. So sales from Wayfair going to locations outside South Dakota are not generally going to be subject to SD sales tax.

tschock 06-26-2018 12:34 PM

Quote:

Originally Posted by Exhibitman (Post 1789979)
I disagree. As a small business owner I already am registered with the state for sales and use tax reporting. I am already required to collect, report and remit sales/use tax. As it stands right now I have to track different types of sales. It will be easier just to slap a tax on every sale than to differentiate intrastate and interstate sales. My tax return just got a lot simpler. Or it will once the states react to the ruling and rejigger their rules, forms and practices to meet the new standard.

Sincerely confused by this response. You said THE state. What about other states with different rates? I guess the bottom line is we have to wait and see what the changes will be. Though rather than simplify things, it seems the government tends to generally make things more complicated than need be.

BobC 06-26-2018 12:39 PM

Quote:

Originally Posted by rats60 (Post 1788948)
I don't see that ever happening. Why would EBay want to destroy their business? Why would they want to take on an unnecessary burden? If they force all sellers to charge sales tax when 90%+ don't need to, most of those sellers will leave. I collect sales tax on sales within my state and send it to them. In the unlikely event I need to do it for other states I will. I will not charge people sales tax on items they don't need to pay it on.

This decision is aimed at large resellers like Warfare, who hurt small business by not charging sales tax and states who have seen revenue decrease because of large online retailers. It is not aimed at trying to collect on every single sale, even if it is an individual selling an used item that they no longer have need of.

This is not technically aimed at Ebay since they are only a platform used by seller's to create a marketplace for selling their goods online. The burden for actual sales tax collection, reporting and remittance is on the actual sellers who own and sell their inventory. Someone like Wayfair is the actual seller themselves so they are charged with having to collect and report the sales tax. What Ebay is likely concerned about is that even if they are not technically responsible for collecting the sales tax, they do have records and data concerning all the sales transactions and buyer and seller data that the various states would come after and start demanding from them to enforce their various state sales tax laws. And as soon as people selling on Ebay realize their information may be getting reported to the states, they may decide to drop off Ebay and look to sell on other sites and venues where the states may not be looking so strongly at yet, or just quit selling altogether as they don't want to deal with the hassle. Because of the added work and such involved, it could end up costing Ebay business down the road, and thus it makes sense that they would try to fight this up front.

Also, I'm not sure that Ebay could specifically force sellers to use software created by them to calculate and collect sales tax. By doing so it may end up looking like they are admitting to the states that they actually are responsible for the sales and collections of sales taxes, which they definitely do not want to do.

BobC 06-26-2018 12:53 PM

Quote:

Originally Posted by tschock (Post 1790009)
Sincerely confused by this response. You said THE state. What about other states with different rates? I guess the bottom line is we have to wait and see what the changes will be. Though rather than simplify things, it seems the government tends to generally make things more complicated than need be.

What Adam is likely referring to is that he is currently registered and licensed to collect and remit sales tax in the state in which he and his business reside. So if he had sales to customers in his home state where he is located and has nexus, he properly collects the sales tax and sends it in. Under the prior law, sales to a customer outside of his home state where he does not have nexus and is not required to be licensed and registered for that other states' sales tax, he would not charge and collect sales tax. That would be the responsibility of the buyer to report and pay the use tax to their home state of residence.

That is the problem with this recent ruling. In the future Adam may be forced to start registering and filing sales tax returns in other states merely because he reaches a certain level of business (sales) to customers in those other states. And he would then have to start keeping additional records and such to comply.

If this does go through and leads to the potential impact many fear, I can see that some software company(ies) will take advantage and try to create a program to assist small business owners in filing and complying with the various sales tax laws in all the states they have sales in. At some cost of course. And then market providers like Ebay would become hard pressed to interact with such other software to help their sellers, or have to develop it themselves. Whatever way it would end up going, it is not something Ebay wanted to have to deal with I would guess.

tschock 06-26-2018 01:38 PM

Quote:

Originally Posted by BobC (Post 1790016)
What Adam is likely referring to is that he is currently registered and licensed to collect and remit sales tax in the state in which he and his business reside. So if he had sales to customers in his home state where he is located and has nexus, he properly collects the sales tax and sends it in. Under the prior law, sales to a customer outside of his home state where he does not have nexus and is not required to be licensed and registered for that other states' sales tax, he would not charge and collect sales tax. That would be the responsibility of the buyer to report and pay the use tax to their home state of residence.

That is the problem with this recent ruling. In the future Adam may be forced to start registering and filing sales tax returns in other states merely because he reaches a certain level of business (sales) to customers in those other states. And he would then have to start keeping additional records and such to comply.

If this does go through and leads to the potential impact many fear, I can see that some software company(ies) will take advantage and try to create a program to assist small business owners in filing and complying with the various sales tax laws in all the states they have sales in. At some cost of course. And then market providers like Ebay would become hard pressed to interact with such other software to help their sellers, or have to develop it themselves. Whatever way it would end up going, it is not something Ebay wanted to have to deal with I would guess.

OK. I believe he disagreed with my statement "This will put undue burden more on small businesses rather than larger ones." (but will have to let him respond). But I believe I see now where this coming from.

I think what you are saying is that this new 'mess' might be addressed by someone creating software to handle it (or possibly a coordinated effort to make this 'simpler' for businesses to handle). I can buy that as a possibility, but I would still have a 'wait and see' attitude regardless. Does Turbo Tax make filing taxes simpler? Yes. Does the (generally speaking) government action necessitate the reason for something like Turbo Tax in the first place? That proof is left to the student. :)

tschock 06-26-2018 01:52 PM

Quote:

Originally Posted by BobC (Post 1790011)
This is not technically aimed at Ebay since they are only a platform used by seller's to create a marketplace for selling their goods online. The burden for actual sales tax collection, reporting and remittance is on the actual sellers who own and sell their inventory....

First, not disagreeing with anything you are saying. But the other thing to keep in mind is who has the deep pockets. Not you or I, but eBay. While the burden at this time might be on the seller, it might not be in the future. There's a fine line that could be blurred or shifted if there's easier money to be made collected. Auction houses collect taxes, though they are a consignor and don't actually 'own' the goods they 'sell'. Who's to say that burden might not be put on 'marketplaces' in the future. I'm not arguing with what the law currently is here, but speculating as to what it could become.

BobC 06-26-2018 02:41 PM

Quote:

Originally Posted by tschock (Post 1790030)
OK. I believe he disagreed with my statement "This will put undue burden more on small businesses rather than larger ones." (but will have to let him respond). But I believe I see now where this coming from.

I think what you are saying is that this new 'mess' might be addressed by someone creating software to handle it (or possibly a coordinated effort to make this 'simpler' for businesses to handle). I can buy that as a possibility, but I would still have a 'wait and see' attitude regardless. Does Turbo Tax make filing taxes simpler? Yes. Does the (generally speaking) government action necessitate the reason for something like Turbo Tax in the first place? That proof is left to the student. :)

Turbo Tax is basically for income taxes, not for sales and use taxes. Usually the individual companies/sellers have to keep track of their sales tax collections and such themselves, and the various business software products they use will assist them in the calculation and billing and record keeping for sales taxes purposes. But they are still usually responsible for the filing and remittance of the sales tax returns themselves. Not sure there is a software out there right now that can also file for you in every state. I know for example that some states, like Ohio, have their own website that requires you to go onto their platform and site to report and pay your sales tax. They don't allow you to file and pay any other way.

If this new change to the law goes through and makes it where more sellers are now going to be responsible for collecting and remitting multi-state sales taxes, that may increase the number of users of such software to the point someone will figure they can now make money off it and develop such a product.

Batpig 06-26-2018 02:56 PM

Just as an FYI since it has been mentioned several times in the thread - 3rd party sales and use tax management already exists. I'm aware of Vertex, and I'm sure there are others.

BobC 06-26-2018 04:09 PM

Quote:

Originally Posted by tschock (Post 1790036)
First, not disagreeing with anything you are saying. But the other thing to keep in mind is who has the deep pockets. Not you or I, but eBay. While the burden at this time might be on the seller, it might not be in the future. There's a fine line that could be blurred or shifted if there's easier money to be made collected. Auction houses collect taxes, though they are a consignor and don't actually 'own' the goods they 'sell'. Who's to say that burden might not be put on 'marketplaces' in the future. I'm not arguing with what the law currently is here, but speculating as to what it could become.

Understand exactly what you are saying but, this is the fine line that Ebay is trying to straddle. Whereas an auction house runs an auction on behalf of their consignors who sign an agreement with them to basically act as an agent on the consignor's behalf, Ebay does no such thing, and does not ever take possession of the items being sold on its site, nor become responsible for the shipment of goods and receipt of the payment. in fact, it is because of these latest occurrences that Ebay may have been looking ahead to these types of sales tax law changes that prompted them to make the decision to spin-off and divest themselves of Paypal a few years ago, so they could not be considered as responsible for collecting monies directly from buyers and make it less likely they could ultimately be held responsible for collecting sales tax.

Not sure it is a completely accurate analogy but, Ebay is like the flea market operator who rents spaces to sellers who come to sell their stuff to an audience that shows up because they know all these sellers are going to be there. The flea market operator is not the owner of the goods, does not deliver the goods or collect the money for them, does not act as an agent for the sellers, and definitely is not responsible for any sales taxes.

If the flea market gets big enough that someone at the state level knows about it, they could send an agent down to check on the sellers to see if they are properly collecting sales tax, etc. Now the flea market owner may not be responsible for the sales tax themselves but, say he/she does collect addresses and other info on all the sellers who show up so, the state agent makes a "friendly" request that the flea market operator provide all the pertinent seller info so the state can check up on the sellers. Once word of that gets out, how soon do you think it would be for sellers to stop going to that flea market so they don't get looked at by the state? This is how Ebay could take a hit and another reason why they were likely putting out that petition they were asking all the sellers to sign a couple months or so ago, fighting this recent ruling. Ebay is probably figuring that even if they don't have to directly do anything with this new sales tax enforcement, they still get hit with it because they are so big and already have so much information on everyone that the taxing authorities could simply request all the data and scare away sellers who don't want to get reported to the government.

To use another, maybe poor, analogy, think of the sellers as cockroaches. What do they do when you enter a room they're in and turn on the lights!!!

BobC 06-26-2018 04:41 PM

Quote:

Originally Posted by Batpig (Post 1790058)
Just as an FYI since it has been mentioned several times in the thread - 3rd party sales and use tax management already exists. I'm aware of Vertex, and I'm sure there are others.

I'm aware of it and other sales tax management software also but, in this case the trick is, does that software currently interface with a seller's Ebay account so they don't have to go through all the time and effort to gather and keep track of all the sales tax data themselves and enter into the Vertex software by hand to then be able to file and pay all the various state taxes they end up owing? Software like that will not be cheap, and will need to be constantly updated and revised as sales tax laws and rates change over time. And what about if they also sell at shows or have their own site they sell from? Aren't they going to have to record all that data and possible enter it into the tax management software by hand themselves?

Also, that software simply manages the data and information, and may or may not actually be able to prepare and file actual sales tax returns for you in every state, or properly remit the sales taxes in an electronic or other automated manner. And then as was alluded to by some other posters, there is also the matter of having to look at each state you sell in and checking their rules and nexus limits.

And then a seller is going to have to register or license themselves in each and every state they end up being responsible for sales taxes in. The software isn't going to do that for you. And don't forget that all those various states have separate and different rules and rates and you still have to comply with their separate laws, etc. And let's say you decide to take a break and not sell for a while, in most states you're still going to have to file sales tax returns, even if the tax due is $0. And if you decide to quit selling, then you're going to have to formally go and dissolve or terminate your license or registry in all those states so they don;t keep coming after you for sales tax returns and taxes.

Additionally, I'm not so sure Ebay would like to share their source code with someone to write such a program to interface with their software, at least not if they didn't own the software themselves. And as earlier poster previously speculated, figure out a way to then charge for the cost of doing so. Of course, this then may present an added dilemma to Ebay as I pointed out in my previous post in regards to Ebay not wanting to do things that could potentially make them responsible for the sales tax themselves. If they create/sponsor such software, and especially if they charge sellers for its use, they may add to the risk of them being viewed as directly responsible for the sales taxes themselves by the states as well.

And also, by creating/owning/selling/charging for such software, they could become liable for interest and penalties on screw-ups and bad or missed sales tax filings or payments if there are errors or mistakes made by the software, among other things I extremely doubt that Ebay would in any way want to become part of the tax software and compliance business and add that risk and liability to their plate.

Exhibitman 06-26-2018 05:34 PM

I am sure all of this is going to be addressed in legislation in Congress. :rolleyes:

But seriously, I think this will open the door to serious consideration of a Federal sales tax and the creation of a Federal-state partnership on sales taxes for interstate sales. Congress certainly could enact a uniform set of sales tax provisions and rules for interstate commerce, which would ideally allow a retailer in one state to enter all data for all interstate sales into a single Federal sales tax return and leave it to the agency administering the program to apportion the money and distribute it to all of the states.

I would also guess that most states are going to address this case in the next legislative session. Until the state laws are changed, there is nothing to do, really. The ruling just opens the door to future changes in the tax programs.

savedfrommyspokes 06-26-2018 05:59 PM

Quote:

Originally Posted by BobC (Post 1790070)
in fact, it is because of these latest occurrences that Ebay may have been looking ahead to these types of sales tax law changes that prompted them to make the decision to spin-off and divest themselves of Paypal a few years ago, so they could not be considered as responsible for collecting monies directly from buyers and make it less likely they could ultimately be held responsible for collecting sales tax.

My understanding is that ebay will begin using another company to assist in handling their customer's payments once they complete their split from paypal.

http://money.cnn.com/2018/02/01/tech...yen/index.html

Based on this article, it appears ebay may become more involved with accepting payments than they were when they actually owned paypal up through 2015.

BobC 06-26-2018 06:29 PM

Quote:

Originally Posted by Exhibitman (Post 1790083)
I am sure all of this is going to be addressed in legislation in Congress. :rolleyes:

But seriously, I think this will open the door to serious consideration of a Federal sales tax and the creation of a Federal-state partnership on sales taxes for interstate sales. Congress certainly could enact a uniform set of sales tax provisions and rules for interstate commerce, which would ideally allow a retailer in one state to enter all data for all interstate sales into a single Federal sales tax return and leave it to the agency administering the program to apportion the money and distribute it to all of the states.

I would also guess that most states are going to address this case in the next legislative session. Until the state laws are changed, there is nothing to do, really. The ruling just opens the door to future changes in the tax programs.


Oh, that has been talked about for a while but, the problem as pointed out before, all the different state rules, taxes and rates in effect. Normally when you get the feds involved they try/want to set it up as one set of rules for all, to make it more simple and easier to handle. Also, what do you do for those states that don't have a sales tax?

Trust me, while it sounds like a good idea at first, many states will end up fighting this tooth and nail. A good example would be if you look at Ohio, which has virtually every city and village in the state with their own city income tax. The state has been trying to take that over and regulate and collect it on behalf of the cities for quite a few years now. The cities have been fighting it all along as they figure once the state handles it, they are now at their mercy. Same thing will hold true with the states allowing the feds to handle and collect this for them. They don't trust the feds at all either, and rightly so. Just like the cities in Ohio know not to trust the state.

BobC 06-26-2018 06:46 PM

Quote:

Originally Posted by savedfrommyspokes (Post 1790087)
My understanding is that ebay will begin using another company to assist in handling their customer's payments once they complete their split from paypal.

http://money.cnn.com/2018/02/01/tech...yen/index.html

Based on this article, it appears ebay may become more involved with accepting payments than they were when they actually owned paypal up through 2015.

The trick here is that Ebay USED to own Paypal. As the owner of the company that was handling the collection and payments, it meant that Ebay was effectively handling all the payments and collections. Splitting Paypal off meant it was now being handled by a completely separate company so Ebay no longer had direct control in the handling of payments and receipts. The same disconnect will occur with this new Dutch company. They are not owned or controlled by Ebay, so once again, Ebay is effectively not collecting receipts or remitting payments. I believe from the article you read that the control they are referring to is in what functions and uses the new Dutch firm will set up specifically for Ebay and their users. As the article noted, even though Ebay is a big percentage of Paypal's business, it is still only 13% as of late. So the things Ebay may have wanted Paypal to do may not make sense to Paypal, and thus they may have turned them down. Don't know that for certain but, that could likely be another reason Ebay ended up looking elsewhere for online payment support from someone willing to tailor the software to what Ebay wants but, still not have Ebay directly own it so they could be considered as directly directly collecting and paying receipts and remittances.

Like I said earlier when someone else tried to suggest that Ebay was like an auction house. I pointed out all the differences and why the auction house was responsible for having to charge, collect and remit sales taxes. Ebay is looking to not have any of the same responsibilities as an auction house so they can not be held accountable, responsible or liable for collecting and remitting sales taxes. They just want to be the platform used by others to buy/sell online.

savedfrommyspokes 06-27-2018 05:40 AM

Quote:

Originally Posted by BobC (Post 1790106)
The trick here is that Ebay USED to own Paypal. As the owner of the company that was handling the collection and payments, it meant that Ebay was effectively handling all the payments and collections. Splitting Paypal off meant it was now being handled by a completely separate company so Ebay no longer had direct control in the handling of payments and receipts. The same disconnect will occur with this new Dutch company. They are not owned or controlled by Ebay, so once again, Ebay is effectively not collecting receipts or remitting payments. I believe from the article you read that the control they are referring to is in what functions and uses the new Dutch firm will set up specifically for Ebay and their users. As the article noted, even though Ebay is a big percentage of Paypal's business, it is still only 13% as of late. So the things Ebay may have wanted Paypal to do may not make sense to Paypal, and thus they may have turned them down. Don't know that for certain but, that could likely be another reason Ebay ended up looking elsewhere for online payment support from someone willing to tailor the software to what Ebay wants but, still not have Ebay directly own it so they could be considered as directly directly collecting and paying receipts and remittances.

Like I said earlier when someone else tried to suggest that Ebay was like an auction house. I pointed out all the differences and why the auction house was responsible for having to charge, collect and remit sales taxes. Ebay is looking to not have any of the same responsibilities as an auction house so they can not be held accountable, responsible or liable for collecting and remitting sales taxes. They just want to be the platform used by others to buy/sell online.

My belief is that the reason ebay sold off paypal several years back had little to do with today's sales tax situation. It likely had more to do with ebay capitalizing on their "investment" in paypal.

Even today, paypal is not required to complete sales on ebay and payments (via CC) can be processed directly through eBay's software. I know, I have done it twice now in the past few months.

Based on the article, ebay is looking to become more involved (translates to making more money) on processing payments, as this will generate additional income for them(that PP is currently receiving). In other words, ebay is no longer using PP and switching to this new payments processing company because they will get more of a cut of each payment than they were from PP.

Likely, the changing of payment processors by ebay has nothing to do with this evolving sales tax situation.

Lorewalker 06-27-2018 06:24 AM

Quote:

Originally Posted by savedfrommyspokes (Post 1790165)
Based on the article, ebay is looking to become more involved (translates to making more money) on processing payments, as this will generate additional income for them(that PP is currently receiving). In other words, ebay is no longer using PP and switching to this new payments processing company because they will get more of a cut of each payment than they were from PP.

I think the main reason ebay is going back to processing payments in house is in an effort to prevent buyers and sellers from having one another's email addresses. They are losing a good deal of revenue for sales being conducted outside of the website.

BobC 06-27-2018 09:22 AM

Quote:

Originally Posted by savedfrommyspokes (Post 1790165)
My belief is that the reason ebay sold off paypal several years back had little to do with today's sales tax situation. It likely had more to do with ebay capitalizing on their "investment" in paypal.

Even today, paypal is not required to complete sales on ebay and payments (via CC) can be processed directly through eBay's software. I know, I have done it twice now in the past few months.

Based on the article, ebay is looking to become more involved (translates to making more money) on processing payments, as this will generate additional income for them(that PP is currently receiving). In other words, ebay is no longer using PP and switching to this new payments processing company because they will get more of a cut of each payment than they were from PP.

Likely, the changing of payment processors by ebay has nothing to do with this evolving sales tax situation.

I never stated the sales tax situation was the sole reason they sold Paypal, but i still think it may have been one of the original reasons and a contributing factor. Think about it, if the main reason they are dumping Paypal now is because they can get a bigger slice of the fee for handling the transactions and/or to also control the information between buyers and sellers more than ever so they can't easily get in touch with each other, why didn't they just keep Paypal in the first place? They could have made whatever changes they wanted to the Paypal software, and since they owned it, they would get 100% of the revenue from handling the transactions. And you may also be correct in that another reason or contributing factor for the selling off of Paypal was to take advantage of their investment and cash out when they thought it was to their advantage. Seeing as how Paypal has continued to grow though, and how nominal Ebay's percentage of Paypal's business has shrunk to, if maximizing their investment return was the main original reason for selling Paypal in the first place, they're likely kicking themselves about it now with the way Paypal has continued to grow. It is up over 50% in the last year alone.

I'm sure there are other good reasons as well but, still believe Ebay disassociating themselves from the direct ownership of the payment handling/processing company was also being thought about in terms of how to keep them from appearing to be more directly responsible for sales and collections and possibly make them liable for tax and other reporting purposes. Sales tax and other tax compliance/responsibility issues is probably one of the reasons, not necessarily the sole or main reason, that Ebay divested themselves of Paypal several years back. I am aware that Paypal is not the sole payment option and that Ebay can process credit card payments and such but, with Payal being the main payment processor on Ebay, and Ebay not directly owning them, it helps in the appearance and fact that Ebay does not have complete control of the payments processing function, which helps them defend themselves should some taxing authority try to make a claim that they are directly responsible for all collections and payment processing themselves.

I agree with you that the fact that they are looking to now change payment processors for a bigger piece of the fee has got nothing to do with the sales tax issue. I was referring back to when they originally divested themselves of the ownership of Paypal. And now that Paypal is a separate company, they don't have to do what Ebay necessarily wants nor pay them what they think they deserve for their part of the business. Even with the known fact in the marketplace that Ebay is replacing Paypal in the near future, Paypal is still doing great on the stock market. So much for them needing Ebay!

BobC 06-27-2018 09:34 AM

Quote:

Originally Posted by Lorewalker (Post 1790175)
I think the main reason ebay is going back to processing payments in house is in an effort to prevent buyers and sellers from having one another's email addresses. They are losing a good deal of revenue for sales being conducted outside of the website.

Which is also another big reason Ebay has been fighting this sales tax compliance issue. Because they are so well known and big, the states will focus on sites like Ebay, and therefore on those sellers that use Ebay as a marketplace. In an effort to not have to keep all the records and charge customers for sales tax (which will likely reduce what people will be willing to pay for their items to begin with, much like buyer's premiums affect bids at an auction house), sellers will likely start looking even harder for other venues and ways to get around dealing with sellers through Ebay, which in turn reduces business for Ebay.

Exhibitman 06-27-2018 10:23 AM

Quote:

Originally Posted by BobC (Post 1790098)
Oh, that has been talked about for a while but, the problem as pointed out before, all the different state rules, taxes and rates in effect. Normally when you get the feds involved they try/want to set it up as one set of rules for all, to make it more simple and easier to handle. Also, what do you do for those states that don't have a sales tax?

Trust me, while it sounds like a good idea at first, many states will end up fighting this tooth and nail. A good example would be if you look at Ohio, which has virtually every city and village in the state with their own city income tax. The state has been trying to take that over and regulate and collect it on behalf of the cities for quite a few years now. The cities have been fighting it all along as they figure once the state handles it, they are now at their mercy. Same thing will hold true with the states allowing the feds to handle and collect this for them. They don't trust the feds at all either, and rightly so. Just like the cities in Ohio know not to trust the state.

If the states enact a hodge-podge of new regulations over interstate sales tax and there is wide variance between them, that is precisely what the commerce clause of the Constitution was meant to allow Congress to regulate. The business lobby will go apeshit and in this pay-for-play government, if the money goes crazy, the officials they bribe, er, donate to, will respond.

BobC 06-27-2018 01:52 PM

Quote:

Originally Posted by Exhibitman (Post 1790240)
If the states enact a hodge-podge of new regulations over interstate sales tax and there is wide variance between them, that is precisely what the commerce clause of the Constitution was meant to allow Congress to regulate. The business lobby will go apeshit and in this pay-for-play government, if the money goes crazy, the officials they bribe, er, donate to, will respond.

Exactly right. This is not an easy fix. The problem stems from the way the old laws requiring physical presence to be in place before someone could be responsible for having to file and pay any kind of taxes in any state or jurisdiction. Back then there was no internet or online sales. The did have catalogs sales but, not to the extent or volume of today's economy. And because of the vast increase in such internet and online sales, old brick and mortar businesses are shutting shut down left and right, or having a real hard time competing, states lose out on sales tax and other tax revenue they would have otherwise had, and on and on. They're now trying to figure out how best to update and change the tax laws to deal with the new way businesses are run and operate. The problem is that everyone is pretty much ingrained with the old, existing tax systems and rules, and to just wholesale change them all at once would create pure chaos in the business world and the economy. And in the meantime, since not every state has the exact same types of taxes, laws and rates, it is near impossible to hope for any concerted effort on the entire country's part to address this, unless as you suggested, Congress and the federal government take the lead. Of course, the states will never go along with this as it violates their states rights and they'll never all agree on exactly how it things should be handled, and who should be handling them, anyway.

As a supporting example, for years, there has been a group of states that have gotten together to back and support and promote ideas revolving around the generalization of state taxes and such, and it is all as a result of what is known as the Multi-state Tax Compact that was actually put into effect all the back in 1967. Been that long and they still can't get all the states to work together to agree on how to do things from back then even. Fat chance you'll get them to change their ways and start agreeing on all the new things happening every day now.

BobC 08-07-2018 10:04 AM

Thought this might be of interest to some of you regarding a follow-up to the recent Supreme Court case involving Wayfair in South Dakota. Here's a link to a recent article in accountingToday that talks about the possible ramifications of the ruling and potential reactions from other states going forward.

https://www.accountingtoday.com/news...les-of-wayfair

The interesting thing here to note is that under this Remote Seller's Law, originally enacted by South Dakota and effective back on May 1, 2016, is that their threshold and definition of a large online retailer/seller is anyone with more than $100,000 in sales to South Dakota residents/businesses in a current or prior year OR 200 or more transactions with residents/businesses in a current or prior year. Hitting $100K in sales may be a little tough for smaller sellers but, having over 200 transactions may not be so tough, especially for anyone selling a lot of smaller value cards. This puts outfits like PWCC and Probstein right in their cross hairs as 200 transactions a year only amounts to about 16-17 sales a month, which is really not that many and will likely impact quite a few sellers on Ebay.

Also, this recent Supreme Court ruling is not the final action. The case actually went back to South Dakota courts then for final resolution, so the actual law has not yet officially been put into full effect yet and still has to get over some additional constitutional hurdles. Here's another article talking about the history of this and where it now stands. Still, this should start being enforced sooner than later I would think as the South Dakota courts had already aligned with the state on the legality of this. Thankfully it sounded like South Dakota was only going to enforce this going forward, and not put any added burden on businesses by trying to make the law retroactive as trying to go back and collect sales tax after the fact is virtually impossible in my opinion.

https://www.salestaxinstitute.com/re...constitutional

Another interesting question is what exactly counts as a "transaction" towards the 200 per year threshold. If someone buys from a catalog or off a website from a seller like say Kit Young or Wayne Varner, i would think the total number of things they purchased at the same time would be bundled and sold altogether as one transaction. However, if such a seller also sells items on Ebay, which I'm pretty sure both of these guys I mentioned do, I'm not sure if each individual listing being sold on Ebay would be considered as a separate transaction or not, even if someone purchased several items all at once and then bundled and paid for them through checkout in one payment. I'm guessing that is something the South Dakota sales tax department will have yet to determine and opine on.

Also, sellers have to remember that if they sell through catalogs, websites, Ebay, or via other means, the $100K and 200 transaction thresholds are for total sales and activity through all those venues added together, not just Ebay sales and transactions. Ebay sales and transactions are probably the most visible and easiest for the states to go look at though, which is another reason Ebay is very unhappy about this because they are so big and visible to the states. Sellers trying to get around this may just reduce their activity on Ebay, or get off it entirely, so South Dakota doesn't come looking for them. Ebay knows this will likely have some negative impact for them going forward, just how much, no one knows yet. Also, it will possibly put Ebay in the middle if the South Dakota sales tax department comes asking them for information on sales into their state, or detail on seller's activity such as sales amounts or the number of transactions with SD residents/businesses. They won't have much of a choice and will likely have to comply with any such requests, so this will probably cost them additional time and effort as well.

This could become real interesting, and not necessarily in a good way!!!

BosseFieldBoy 08-08-2018 08:52 AM

I got a notice from Heritage that they will be including sales tax effective 8/1. Has anyone received a similar notice from any of the other auction houses?

bobbyw8469 08-08-2018 08:58 AM

I have never understood how you can pay sales tax on a USED item where the sales tax was already collected at the time the item was sold.


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