Ebay Sales Tax on Everything Now?

[Santo10Fan]

I'm in Illinois and added an item from CA seller to check what you mentioned here. Did not see sales tax added to invoice.

[JollyElm]

Originally Posted by Santo10Fan

I'm in Illinois and added an item from CA seller to check what you mentioned here. Did not see sales tax added to invoice.

Try that with other CA sellers and see if it is added. I'm out here and once in awhile when I do a test by adding something to my cart, a CA seller won't have the sales tax factored in for some reason. Don't know if it's on purpose or some some sort of crack in the system.

[OLDBILL]

If you live in CA and buy a card from a CA seller, you get taxed.

[JollyElm]

Yeah, why let facts get in the way...

canotax.jpg

Red box (added from the actual listing) shows item location as California. I live in California, and like I specifically said, sometimes the tax doesn't show up.


Another two CA cards I put in my cart cost around $400 and had tax of $32+ listed...

catax.jpg

[thecatspajamas]

Without knowing for sure, I would hypothesize that eBay is now adding sales tax for specific states when out-of-state purchases are being shipped to that state (i.e. Use Tax), but is still leaving it up to sellers who reside in those states to collect and remit Sales Tax to their state as before. This would make it appear hit-and-miss for application of sales tax for in-state buyers. Did the Wayfair court ruling that all of this was based on even speak to application of in-state sales tax for internet purchases?

I haven't tested this theory. Just throwing it out there for consideration.

[SteveMitchell]

I believe the culprit in all of this is not eBay - except as eBay has insufficiently advised "members" of what has transpired and how it will all play out. As a non-lawyer I will leave it to those among us who are to explain but the tax-on-eBay (and not just eBay) stems from a 2018 Supreme Court decision.

See: https://www.scotusblog.com/case-file...v-wayfair-inc/

This decision seems to have opened the floodgates to every state (except the few that, blessedly, do not have state sales taxes) collecting taxes on internet sales whether the business has a presence in the state or not.

As Washington State residents who collect and pay WA state's very variable tax rate, we note that the original statement regarding collecting WA state tax has been removed from our eBay listings and the standard line (which seems to appear in all listings we've seen lately) has replaced it. That statement reads: "Sales tax may apply when shipping to: MN, WA." And with likely many more to come.

Steve Mitchell
TheBaseballHobbyist

[BobC]

Originally Posted by SteveMitchell

I believe the culprit in all of this is not eBay - except as eBay has insufficiently advised "members" of what has transpired and how it will all play out. As a non-lawyer I will leave it to those among us who are to explain but the tax-on-eBay (and not just eBay) stems from a 2018 Supreme Court decision.

See: https://www.scotusblog.com/case-file...v-wayfair-inc/

This decision seems to have opened the floodgates to every state (except the few that, blessedly, do not have state sales taxes) collecting taxes on internet sales whether the business has a presence in the state or not.

As Washington State residents who collect and pay WA state's very variable tax rate, we note that the original statement regarding collecting WA state tax has been removed from our eBay listings and the standard line (which seems to appear in all listings we've seen lately) has replaced it. That statement reads: "Sales tax may apply when shipping to: MN, WA." And with likely many more to come.

Steve Mitchell
TheBaseballHobbyist

While all this current concern and discussion regarding Ebay now collecting sales tax in certain states is most assuredly a result from last year's South Dakota vs. Wayfair case that went before the U.S. Supreme Court, there's one thing that no one has really addressed about this entire issue that has me scratching my head. That case was all about what makes a seller from one state suddenly subject to sales tax laws of another state, which is what the Supreme Court primarily addressed. Now I admit i have not actually read the complete findings and opinions from the court on this case, but what I didn't hear or see anywhere was if the Supreme Court also offered any ruling or opinion on what constituted a "seller" subject to their findings.

This is where I'm wondering a little bit why Ebay itself is stepping up and taking control and responsibility for collecting and remitting sales tax in certain inter-state sales situations. I always was under the impression that Ebay operated as a platform to provide a virtual marketplace for buyers and sellers to get together and complete transaction online. But Ebay itself doesn't actually own or sell anything and each of the individual account holders that use Ebay are considered as independent entities/sellers. That is markedly different than how other online retailers like Amazon, Wayfair and Rock Auto operate to my knowledge. In those cases, the big online retailers are the sellers, and they should be the ones responsible for charging, collecting and remitting sales tax. In Ebay's case though, I'm actually surprised they are stepping in on behalf of all these independent sellers and starting to collect and remit sales taxes for certain states. I had not heard anywhere that what Ebay does suddenly elevated them to the position of responsibility and liability in regards to state sales taxes. And the fact that certain sellers who were already charging and remitting sales taxes before this recent Supreme Court case are still doing so independently of Ebay seems to go along with that thinking as well. If nothing else, this can become real convoluted for the parties involved. For example, if there was a seller on Ebay who was previously charging sales tax in one of these states Ebay is now handling, what does that seller now do to report those sales if Ebay took over the collection and remittance of sales tax? Especially if that seller also has sales tax obligations to that same state from other venues and platforms they also use to sell to customers in such states?

And I would have thought that Ebay would fight being given such a sales tax responsibility tooth and nail before taking it on like they apparently have. I have seen and heard nothing as to why this is suddenly Ebay's responsibility. Unless Ebay is taking a proactive position that these recent sales tax changes for online retailers is just the beginning and they figure these states will eventually start coming after them as the responsible party so they simply decided to get out in front of it, otherwise I don't get it. For these states to go after each individual seller on Ebay is going to be difficult, time-consuming and not very effective in my opinion. To only have to go after Ebay itself, they can focus on just one huge entity and get the most cost-effective results possible. But then the states would have to be able to prove that Ebay is the seller with the ultimate sales tax responsibility to begin with, which I'm not so sure they really are.

Now I could also then see a particular state going to Ebay and demanding sales information on all their retail activities in that particular state so they can start going after the individual sellers themselves. Ebay should have all the buyer and seller information and activity in their system so it isn't like they could just say no, they didn't have it. Maybe this was something else Ebay saw would be coming and decided that rather than providing such information and pissing off and alienating their sellers, it would be less of an issue with sellers if Ebay just took this on themselves. I'm guessing on this, but it could be a valid explanation as to why they are now doing what they are doing in these certain states in taking on the sales tax collection and remittance functions and responsibilities. It could even be construed as a selling point for Ebay I guess in that they could let people selling on their platform know that by doing so, they don't have to worry about sales tax and all the issues involved. I am fairly certain that Ebay has tons of sellers that are relatively small and as such, don't bother reporting their Ebay sales activity for income or any other tax purposes. By suddenly having state sales tax agents looking at these individual sellers, such information can then get shared between federal, state and local taxing authorities as well. And in this digital age, don't think they don't share information, and plan to do even more of it in the future.

Several years back when Ebay split with Paypal and stopped directly owning them, I actually thought that was a smart, preemptive move on Ebay's part in regards to sales tax issues as it would make it less likely that someone down the road could have argued and said Ebay should be deemed responsible for things like collecting sales tax on transactions through their venue because even if they don't actually own and control the inventory and items being sold, they do control the collection and remittance of the monies from all the activity due to their ownership of Paypal. So if anyone has any factual information as to why Ebay would so quickly and willingly jump in to take on sales tax collection and remittance responsibilities, I'd like to hear and/or see it.

[BobC]

Originally Posted by thecatspajamas

Without knowing for sure, I would hypothesize that eBay is now adding sales tax for specific states when out-of-state purchases are being shipped to that state (i.e. Use Tax), but is still leaving it up to sellers who reside in those states to collect and remit Sales Tax to their state as before. This would make it appear hit-and-miss for application of sales tax for in-state buyers. Did the Wayfair court ruling that all of this was based on even speak to application of in-state sales tax for internet purchases?

I haven't tested this theory. Just throwing it out there for consideration.

The Supreme Court case wouldn't directly go into that as they were looking primarily at the issue of what gives state #1 the right to make someone in another state, state #2, have to collect and remit sales tax on sales to customers in state #1. The U.S. Supreme Court gets involved in multi-state issues or those that specifically deal with federal law. A specific state sales tax rule about in-state sellers and how they charge and collect such sales tax from in-state buyers wouldn't necessarily have any federal implications that would require or even permit U.S. Supreme Court involvement. That South Dakota vs. Wayfair case was all about what causes a seller that does not otherwise have any physical presence in a particular state to now have enough presence so they are required to comply with that state's rules as far as charging and remitting sales tax on sales to customers in that state is concerned.