Ebay Sales Tax on Everything Now?

[joed25]

I have a New Jersey State resale Certificate. Does that exempt me from paying sales tax on all ebay purchases (even out of state)? Thank you. Joe

[glchen]

Originally Posted by joed25

I have a New Jersey State resale Certificate. Does that exempt me from paying sales tax on all ebay purchases (even out of state)? Thank you. Joe

Yes, but you need to submit your reseller info to ebay. Details are here: Link. (I have not tried this.)

[D. Bergin]

Originally Posted by glchen

Yes, but you need to submit your reseller info to ebay. Details are here: Link. (I have not tried this.)

I don't buy much on Ebay anymore, but I submitted for it, and it went through pretty quickly. It says 7-10 days but it was more like 1 or 2. I made the mistake of first sending them my Sales & Use tax permit, but what they needed was the Sales & Use Tax Resale Certificate exemption form that is filled out for each individual seller you are doing business with (in this case "Ebay").

Supposedly once you submit this, it should be good for 3 years before they request it again.

[steve B]

Originally Posted by D. Bergin

I don't buy much on Ebay anymore, but I submitted for it, and it went through pretty quickly. It says 7-10 days but it was more like 1 or 2. I made the mistake of first sending them my Sales & Use tax permit, but what they needed was the Sales & Use Tax Resale Certificate exemption form that is filled out for each individual seller you are doing business with (in this case "Ebay").

Supposedly once you submit this, it should be good for 3 years before they request it again.

Another thing they'll have to track, here in Mass, the exemption forms should be filed each year. (Which doesn't always happen in practice)

[dio]

Anyway to avoid sales tax from ebay?
I guess i'll stop buying from ebay and just go with fb/net54 from now on

[BobC]

Originally Posted by joed25

I have a New Jersey State resale Certificate. Does that exempt me from paying sales tax on all ebay purchases (even out of state)? Thank you. Joe

It depends! If you buy something on Ebay that is actually going to be re-sold by you/your business then, YES, that purchase is generally sales tax exempt to you/your business. But if you buy something that is for you personally and/or used in your business and not necessarily going to be re-sold by you/your business then, NO, that purchase would generally not be sales tax exempt to you/your business.

Just having a resale certificate doesn't automatically exempt you from sales tax on all purchases. And as mentioned by an earlier poster, you would also have to prepare and supply to Ebay, or whomever would otherwise be charging and collecting sales tax from you, a signed copy of any sales tax exemption certificate or form you have that is applicable.

And here's where it can start to get sticky. What if over time you/your business make some Ebay purchases that are sales tax exempt and some that are not. I'm not exactly sure how Ebay will be able to discern between which purchases are or aren't subject to sales tax then. And if a state ever goes back to Ebay to review and audit the sales taxes they are and are not collecting, Ebay will likely turn over their file of any and all sales tax exemption forms they've received for people/businesses. And that helps to show Ebay has no liability for having not collected sales tax from those people/businesses that gave them sales tax exemption certificates. But it also then gives the state a listing of people/businesses to possibly further investigate to see if they are truly sales tax exempt or merely trying to get out of paying sales tax.

[joed25]

Thanks guys for the replies

[thecatspajamas]

Originally Posted by BobC

And here's where it can start to get sticky. What if over time you/your business make some Ebay purchases that are sales tax exempt and some that are not. I'm not exactly sure how Ebay will be able to discern between which purchases are or aren't subject to sales tax then. And if a state ever goes back to Ebay to review and audit the sales taxes they are and are not collecting, Ebay will likely turn over their file of any and all sales tax exemption forms they've received for people/businesses. And that helps to show Ebay has no liability for having not collected sales tax from those people/businesses that gave them sales tax exemption certificates. But it also then gives the state a listing of people/businesses to possibly further investigate to see if they are truly sales tax exempt or merely trying to get out of paying sales tax.

You're right that I don't see a way for a buyer to convey to eBay which purchases fall into which category. In these cases, one would presumably still have to remit the applicable tax to their state as before. Or would have to establish a separate eBay account for such non-for-resale purchases (probably not a bad idea anyway). This would still be preferable to the previous situation though of eBay not having any way for resellers to avoid eating the sales tax on ALL purchases, regardless of whether intended for resale or personal use.

[BobC]

Originally Posted by thecatspajamas

You're right that I don't see a way for a buyer to convey to eBay which purchases fall into which category. In these cases, one would presumably still have to remit the applicable tax to their state as before. Or would have to establish a separate eBay account for such non-for-resale purchases (probably not a bad idea anyway). This would still be preferable to the previous situation though of eBay not having any way for resellers to avoid eating the sales tax on ALL purchases, regardless of whether intended for resale or personal use.

And that is only the tip of the iceberg. It can get way more complicated and worse than that. Each state with sales taxes has their own unique set of rules of what is and isn't taxable and so on. Not sure how good of a job Ebay is going to do in implementing and then keeping track of the specific rules for each and every state, and then also keep track and make updates as those laws may change. For example, I seem to remember someone saying that in Minnesota they don't charge sales tax on clothing. So what do you do when someone lists say an autographed baseball jersey for sale on Ebay to a buyer in Minnesota? Technically since the jersey can be considered as a wearable piece of clothing, I would guess it should be exempt from Minnesota sales tax, right? But if it is listed in the sports or autographed memorabilia section of Ebay, where it rightly should be, will Ebay be able to detect and properly not charge a resident of Minnesota sales tax on it if they did buy it? See how easily and quickly this can get complicated and difficult to keep track of. And if Ebay is going to assume and take on the responsibility for the collection of these state sales taxes, that is also going to open them up for these states to come in and audit there sales tax collection and remittance activities. And with the sheer size and volume of sales activity on Ebay and potential amounts of sales tax to be collected, it is truly a question of when they will start to get audited by various states, not if.