eBay Fees on Buyer-Paid Sales Tax

[BobC]

Originally Posted by Gusturd

LOL You're going to have to convince me with a precedent of a garage sale getting busted for not collecting and reporting sales tax. Or even a garage sale that collected sales tax. That would be good enough. Otherwise, in every practical sense, it's not really required.

I didn't say it is always true, and it additionally depends on the state you're in and their specific rules. Also, you were originally talking about sales made on Ebay, a very well-known online marketplace, now you're talking about garage sales, which is distinctly and entirely different. Some states do have rules regarding occasional or casual sales where the party selling does not normally sell things as part of their business, and in such cases those sales may be exempt from sales tax in those particular states. And in that case, a garage sale by an individual would likely meet the casual/occasional sales exemption. And you're right, most states don't have the personnel to go out and track down sales taxes from things like garage sales, so they end up putting such laws in to exempt them from sales tax so they never have to waste the time. But you mentioned someone selling 10-20 items a year maybe, and doing so on Ebay, which is an online marketplace. That is not the same as a garage sale type of casual sales activity. And even though the number of sales you mentioned aren't that many, I don't believe states that allow such a sales tax exemption for casual/occasional sales actually have defined what qualifies as such using a specific number of sales or dollar amount.

Plus, don't forget that it is online sales that triggered this whole sales tax thing coming from the Supreme Court's ruling in the S Dakota vs. Wayfair case back in 2018. So the authorities are saying online sales platforms are most definitely generating business sales, especially since records of the transactions and the parties involved, as well as dollar amounts of all sales, are maintained by the party providing the online platform and can be accessed if need be by tax authorities. That info and data would likely never be kept by someone doing a garage sale. So your question/point is a possible grey area and may or may not be arguable, depending on what specific state you are in.

[Gusturd]

Originally Posted by BobC

I didn't say it is always true, and it additionally depends on the state you're in and their specific rules. Also, you were originally talking about sales made on Ebay, a very well-known online marketplace, now you're talking about garage sales, which is distinctly and entirely different. Some states do have rules regarding occasional or casual sales where the party selling does not normally sell things as part of their business, and in such cases those sales may be exempt from sales tax in those particular states. And in that case, a garage sale by an individual would likely meet the casual/occasional sales exemption. And you're right, most states don't have the personnel to go out and track down sales taxes from things like garage sales, so they end up putting such laws in to exempt them from sales tax so they never have to waste the time. But you mentioned someone selling 10-20 items a year maybe, and doing so on Ebay, which is an online marketplace. That is not the same as a garage sale type of casual sales activity. And even though the number of sales you mentioned aren't that many, I don't believe states that allow such a sales tax exemption for casual/occasional sales actually have defined what qualifies as such using a specific number of sales or dollar amount.

Plus, don't forget that it is online sales that triggered this whole sales tax thing coming from the Supreme Court's ruling in the S Dakota vs. Wayfair case back in 2018. So the authorities are saying online sales platforms are most definitely generating business sales, especially since records of the transactions and the parties involved, as well as dollar amounts of all sales, are maintained by the party providing the online platform and can be accessed if need be by tax authorities. That info and data would likely never be kept by someone doing a garage sale. So your question/point is a possible grey area and may or may not be arguable, depending on what specific state you are in.

Well the whole thing is very convoluted. On the one hand, your saying sales tax shouldn't be triggered unless you exceed $100K and 200 transactions (I realize it may vary by state) and on the other your saying every sale made online is a business sale and should have tax collected. If the government really wanted to boost tax revenue for this country, they'd simplify or at least clarify the rules so people knew what they were supposed to do. The whole thing is one big gray area that simply compels people to pay tax 100% of the time, whether it's really required or not. Maybe that's intentional.

[BobC]

Originally Posted by Gusturd

Well the whole thing is very convoluted. On the one hand, your saying sales tax shouldn't be triggered unless you exceed $100K and 200 transactions (I realize it may vary by state) and on the other your saying every sale made online is a business sale and should have tax collected. If the government really wanted to boost tax revenue for this country, they'd simplify or at least clarify the rules so people knew what they were supposed to do. The whole thing is one big gray area that simply compels people to pay tax 100% of the time, whether it's really required or not. Maybe that's intentional.

You don't really understand this at all, do you? It all starts with the Supreme Court saying decades ago that a seller wasn't liable to collect and remit sales tax to a state in which they had sold/shipped something to the buyer, unless that seller had a physical presence in that same state. That means they have a building, inventory, employees, something in that same state as where they just made the sale to. The recent Supreme Court ruling from 2018, setting the $100K or 200 transactions thresholds, only has to do with a seller that does NOT have a physical presence in a particular state. It now makes a seller who surpasses those sales threshholds in a state they do not have a physical presence in liable for now having to collect and remit sales tax in that state, the same as if they had a physical presence in it. A seller is still always liable to collect and remit sales tax in states they have a physical presence in. So in your example, the 10-20 items per year your wife may sell on Ebay, if she sells something to a person that lives in the same state she lives in, your wife is physically present in that state and technically should be collecting sales tax on those same state sales if those sales are deemed as being retail business sales and the items she is selling are subject to sales taxes for that state. The sales she makes to people who live in a different state than where she physically lives are counted in determining if she meets the $100K/200 transaction threshhold for any of those other, non-resident, states then. She would only be liable to start collecting sales taxes for those other non-resident states that her sales volume/quantity hits either of the threshholds then. That is not a grey area, you are always going to be liable to collect sales taxes on taxable business/retail sales in the state in which you live and have a physical presence in, if that state has a sales tax. The grey area I was referring to had to do with whether or not 10-20 sales per year could be argued as being exempt from sales tax as casual/occasional sales, depending on the state you are in and if they even allow such an exemption, and what their specific rules and definition of casual/occasional sales are.

I was then saying that in light of the courts in now looking at online sales more rigorously in regards to taxes and all, the courts and tax authorities may view parties selling items online with someone like Ebay as a true business as opposed to having a garage sale. And by the way, are you familiar with Ebay's current reporting requirement to tell the IRS how much your wife may have sold on Ebay each year? It is currently set at $20K AND 200 or more transactions. So I'm assuming your wife doesn't currently get a 1099 for her 10-20 sales a year. But guess what, starting in 2022 the IRS reporting threshhold for sending them a 1099 to show how much your wife had in Ebay sales for the year is being lowered to just $600, with no minimum number of transactions. So it is possible you may have to start reporting her "business" on your income tax returns if she hits $600 in sales for a year. And if the IRS is going to consider that level of activity as a retail business, what do you think a state sales tax authority is going to do? Now do you see the difference between a garage sale and selling on Ebay?

I need to start charging you people for all the free advice tax advice I keep giving on here, especially when I get questioned like I don't know what I'm talking about and have to explain even further to get some to understand.

[Gusturd]

I think it's you who can't understand what I'm saying because nowhere in your bloviated wall of words did you contradict anything I said. If you did, please identify. I can't find it.

Despite eBay being a worldwide marketplace, you seem to be hung up on the belief, that all of my wife's 10-20 sales are to residents of our own state. You do know how ebay works right? In reality maybe one was? Possibly two. Maybe none. Wouldn't that mean, using your explanation, that eBay unnecessarily collected sales tax on the rest? And charged a fee on top of it?

That's the only point I'm trying to make. If that is wrong, please say so.

[BobC]

Originally Posted by Gusturd

I think it's you who can't understand what I'm saying because nowhere in your bloviated wall of words did you contradict anything I said. If you did, please identify. I can't find it.

Despite eBay being a worldwide marketplace, you seem to be hung up on the belief, that all of my wife's 10-20 sales are to residents of our own state. You do know how ebay works right? In reality maybe one was? Possibly two. Maybe none. Wouldn't that mean, using your explanation, that eBay unnecessarily collected sales tax on the rest? And charged a fee on top of it?

That's the only point I'm trying to make. If that is wrong, please say so.

You originally said/asked:

"I'm talking about the people like my wife that sell 10-20 items a year to clean out the garage/closets. These types of transactions don't require the collection of sales tax."

You specifically said those types of transaction don't require the collection of sales tax......period!!! My "bloviated" responses were trying to get you to understand you are wrong and that even some transactions like your wife's can be subject to sales tax. So the first thing I ever posted in response to you was to say you weren't right with what you stated and to contradict you, go back and read the very first line I wrote in Post @12. Forgive me for trying to be nice in the way I contradicted you. But as you so clearly stated in your last post, shown above, "nowhere in your bloviated wall of words did you contradict anything I said." So your accusation is 100% wrong, yet you didn't even realize it!!!!!

And then your response back to me was:

"LOL You're going to have to convince me with a precedent of a garage sale getting busted for not collecting and reporting sales tax. Or even a garage sale that collected sales tax. That would be good enough. Otherwise, in every practical sense, it's not really required."

So now you're laughing off what I said, AND asking me to prove it to you. But now you're talking about strictly garage sales and ignoring the fact this was all about Ebay and Ebay sales to begin with. So I took you at your word and went to the trouble of trying to explain in more detail how sales taxes work and how your wife's transactions if selling on Ebay could be construed as subject to sales tax. But again, that still isn't satisfactory enough for you and you come back and say:

"Well the whole thing is very convoluted. On the one hand, your saying sales tax shouldn't be triggered unless you exceed $100K and 200 transactions (I realize it may vary by state) and on the other your saying every sale made online is a business sale and should have tax collected. If the government really wanted to boost tax revenue for this country, they'd simplify or at least clarify the rules so people knew what they were supposed to do. The whole thing is one big gray area that simply compels people to pay tax 100% of the time, whether it's really required or not. Maybe that's intentional."

Based on what you just said in that post, you don't clearly seem to understand how sales tax works, or what the recent Supreme Court case was really about, or the differences in sales to states where a seller has a physical presence or not. Yes, sales taxes are not easy, and can be very confusing. So I made the mistake of again trying to be nice and use more "bloviated" words to further explain why you were wrong and how some of your wife's transactions on Ebay could be deemed taxable sales subject to the collection of sales taxes. And I wasn't just doing that for you, I was really doing it more for everyone else on here that read your post and would otherwise take what you had said about your wife's sales not being subject to sales tax collection to automatically be true!

I never said 100% of your wife's sales were all to sellers in the state she lives in. And yes, even if the in-state sales she makes are subject to sales tax, the sales to out of state sellers would likely not be subject to sales tax in other states because she doesn't reach the threshold for the required number of transactions in those other states. So in that instance, yes, Ebay didn't really need to collect sales tax on your wife's behalf for the out of state sales. I agree with that 100%, and in the 2nd paragraph of Post #12 I even guesstimated what percentage of total Ebay sales may not actually be subject to sales tax collection, in response to your question.

I wasn't disagreeing with that point about Ebay collecting fees on sales taxes they didn't really have to collect at all. I was disagreeing with your statement that all your wife's sales transactions if done via Ebay were simply not subject to sales tax collection at all!!! Go back and read the very first line I wrote in Post #12, where I did exactly what you are now saying I did not do!!!!!

And before coming back with some lame ass response stating that isn't what you were saying or that I don't understand what you meant......you said, "These types of transactions DON'T require the collection of sales tax" (emphasis added). Not that they normally don't, or generally don't, or in any way, shape or form ever implied that there might be any exception to what you said, you just stated they don't require the collection of sales tax, period!!!

Aaaarrrgggghhh!

[Gusturd]

Holy Cow Bob...You're going to give yourself a stroke. Take a Xanax. Nobody is questioning your knowledge of tax regulations, just your reading comprehension. All you had to say is quoted below. Probably could've said just the last 5 words in fact. Would've saved yourself a lot of effort and stress.

Now that you realize we're saying the same thing, have a good night.

Originally Posted by BobC

I never said 100% of your wife's sales were all to sellers in the state she lives in. And yes, even if the in-state sales she makes are subject to sales tax, the sales to out of state sellers would likely not be subject to sales tax in other states because she doesn't reach the threshold for the required number of transactions in those other states. So in that instance, yes, Ebay didn't really need to collect sales tax on your wife's behalf for the out of state sales. I agree with that 100%,