eBay Announces They Will Start Collecting Sales Tax in 2019
Ever since the US Supreme Court ruled in the favor of South Dakota in South Dakota v. Wayfair and eliminated the need for a physical location to define nexus for remote sellers when they must collect sales tax, small businesses have been wondering how this will impact them.
Amazon and Etsy already had started to collect sales tax on behalf of sellers in three states, Washington, Pennsylvania, and Ohio based on so-called marketplace sales tax laws.
Now eBay is following the other two marketplaces to start collecting sales tax in those three states. The company released a notification to sellers that indicates eBay will be collecting and remitting sales tax on sales to buyers in those starting next year:
- Washington—starting Jan 1, 2019
- Pennsylvania— starting July 1, 2019
- Oklahoma—starting July 1, 2019
“Once we start collecting tax in these states, you do not need to take any action. There are no extra charges or fees for this service. Prior to these dates, please continue to collect and remit tax in these states and comply with any other applicable requirements they impose.”
“There are no opt-outs for selling items into the states listed above, or out of eBay automatically collecting sales tax for items shipped to the states above.”
eBay Statement
While other states have not enacted similar marketplace sales tax laws, it is likely they will do so in order to achieve higher compliance with their new requirements.
eBay Sellers May Still Be Responsible
The delay in implementing the collection of sales tax in those three states also still means that sellers are still responsible for possibly collecting sales tax based on 2018 in those states.
Why eBay chose not to include Pennsylvania and Oklahoma to avoid this problem is a bit of mystery. If eBay would have started the collection on January 1, 2019 for all three states, this possible problem could have been avoided.
eBay also said that sellers can stay informed about changes to sales tax collection on the marketplace by visiting their Help Section.
Richard Meldner
Richard is co-founder of eSeller365. He has over 17 years of experience on eBay which includes tens of thousands of sales to buyers in over 100 countries and even has experience with eBay’s VeRO program enforcing intellectual property rights for a former employer. And for about two years Richard sold products on Amazon using Amazon FBA in the US.
To “relax” from the daily business grind, for a few weekends a year, he also works for IMSA as a professional race official.
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Well Washington State likes to be the first State to screw their own citizens! We are now the highest taxed State. I have just stopped my bid on Ebay and will not bid or sell anything more on line !
I think our Government is failing us tax payers . They should use our taxes for it’s intended purpose and learn how to live on nothing as they know we the tax payers have to because of them trying to build their own legacy on our back!
The “gross amount” on the eBay Transaction details report includes the WA sales tax.
I report the ‘gross amount’ to the IRS as the amount we received from the buyer.
It works for 49 of the 50 states in which we sell but it’s not true anymore for WA.
In the case of WA the sales tax is NOT SHOWN on the Transaction details report.
In the case of the PayPal report the eBay ‘gross amount’ is reduced by the sales tax amount.
Therefore, sometimes the gross amount is accurate enough to report to the IRS and sometimes it isn’t.
The only thing this is going to do is reduce the sales margin for the seller, just like it did when eBay started charging Final Valuation Fees on shipping. A buyer computes their bottom line cost when bidding. If I think I’d pay XX dollars for something on Craigslist, that’s probably what I’d pay on eBay, no more. So, if sales tax, shipping, and handling exceed my limit, I’m bidding lower to account for that. So, the seller is the one ultimately screwed.
crap no more ebay advantages over amazon or else…
As an eBay seller, I am starting to get low ball offers on items I sell. from customers in Washington, Pennsylvania and Oklahoma thanks to the sales tax fiasco. I am discouraging people from those states to bid on my items
Why would someone want to buy $100 item with 9% sales tax, when they can get it somewhere else without paying sales tax. Looks like we’ll be loosing many costumers in a working class neighborhoods. RIP eBay.
I’m going to bring my business elsewhere. I constantly shop on eBay. No more looking for items on eBay unless I can get the item cheaper to reflect the incresed amount for the taxes.. I just spent days researching looking for deals narrowed it down compared my prices to other online retail, only to then have $40 added to the total when I went to check out. I will start buying directly from the seller through PayPal and bypass eBay and avoid this fees and taxes. eBay should have invested some money into good lobbyists to prevent this law from passing. Good job eBay for failing.
No laws were passed. It was a Supreme Court opinion that overturned two previous opinions. After that happened, it opened up the floodgates for states to collect sales tax across state lines. Over the next few years, this will eventually catch up to many sellers. While you are right, a small seller will likely be able to stay below some of the thresholds set by states, it will become more and more difficult to find these sellers that can legally avoid collecting sales tax.
Richard
People understand that your just the messenger it’s the frustration small sellers have with their states and selling platforms. It’s this simple sales must have a huge cost to sale ratio or profit just isn’t feasible, profit not possible sellers either go elsewhere or they close up shop they close up shop nobody makes anything States, sales platform or the seller.
Washington now gets tax not just on purchases from other states. eBay recently started charging me sales tax on items that I’ve ordered from China. Absolutely ridiculous. Starting to hate Washington as much as California where I’m from.
This is not just Washington state, all states with marketplace sales tax laws are doing it (or will be soon).
Richard
Wash. State is becoming a socialist state,haves taking care of the have nots.And our governor wants to run
for President.Good luck to all of us if this kind of mentality becomes president.I hope this means most ,who
still believe people should be responsible for their own well being.We’re being taxed to ( ).
Thanks ?
You should move, clearly you don’t wish to abide by the social contract you agree to each day you remain there.
Just like all the idiot liberals out there Whatever happened to those who were moving to Canada if Trump won the election
What concerns me is that eBay might collect sales tax on everything, including clothing, which is not taxable in PA. We shall see. This wouldn’t even be legal. Who keeps that money? Even if they did send it to PA treasury, it’s still illegal, deceptive. eBay has no right to collect it and PA has no right to receive it.
eBay is going to collect sales tax based on listing categories. So in states that have exceptions to sales tax for food, clothing, or in other categories, eBay would not collect them. But it is up to the seller to use the right category. Most sales tax reporting services handle these type of exemptions very well, so I assume eBay is either using one of them or is using the same data points. Sales tax exemption holidays could be a different situation, but they may also no apply to online interstate sales either as they are usually meant to stimulate the local economy.
Exactly!! There is no sales tax in NYC for clothing or shoes under $110 either!! I just bought clothing items from JAPAN and was charged sales tax!! The Japanese Seller didn’t even know what “tax” was yet all EBay would say is “Talk to your tax advisor” and “We’ve been mandated by the government to collect sales tax”. Im wondering the same-who is keeping this money?
Richard; untrue that they are taxing pre shipping charges.. I just had a sale FINALLY to Washington and it made me charge the customer 10.19%, and the box was ticked ‘Tax is applicable to shipping and handling’.. and it was all grayed out, NO way for me to change or amend it.
Guess I need to spend the morning trying to figure out where I need to remit this WHOPPING $1.25 I had to charge the customer!
Ebay just started collecting tax on NJ buyers on out of state purchases as of 5/1//2019, what BS! It will certainly curtail the amount of purchases I make on that site, too bad!
i have been on ebay for twenty years and have purchased thousnds and thousnda of items for a ton of money i live in nj and now that ebay is charging me tax they will see very little of me. ebay is losing money on thiis one
This is stupid. Craigslist, Garage sales, local ads…no taxes on used goods! How can they charge full retail sales tax on personal used items? Now I cant buy anything in my own state unless its way low enough to make it a good deal WITH taxes. Sellers in those states are going to lose big time. SO the sellers in states that do NOT charge taxes will be the ones making more money since people will only buy where they won’t be taxed from.
What a scam.
Utterly and completely ridiculous to tax USED items that have already been taxed the first time they sold. I would think this is a form of double, or even triple taxing (depending on how many times an item was sold, re sold, etc). Also, since when did eBay have the authority to charge ME tax; That should be at my discretion. eBay is in full and complete control…Just how they like it. Yet there is zero oversight for fact that China is the biggest scammer on all of eBay; they flood every single market with their garbage; claiming its American made, or from USA, etc. all a scam. And eBay does nothing to restrict them. Also, if eBay is so into “following the rules”, why aren’t they charging China a tariff to sell goods to the US? Hmmm? Seems to me that if China wants to sell goods thru eBay, they should be charged a 25% tariff! At least until this trade war is over. China knows this, that’s why there’s been a surge in listings on eBay that are from China. After all, eBay is charging me tax….Seems only right.
eBay charging sales tax for some states is because of so called “marketplace facilitator” laws passed in those states. It is no longer at the discretion of the seller but eBay complying with new laws.
Richard
Kevin if you buy used goods at a retail store you are charged sales tax. The Supreme court overthrew the Quill vs So Dakota ruling that only required sellers to collect taxes ONLY if they had a physical presence in the state where the goods were shipped.
By the end of 2020, all online sellers will be required to collect sales tax to comply with the Supreme Court’s rulings and the Marketplace facilitator laws.
EBAY: will die of a slow death
not much point in using eBay anymore now that they collect taxes. i’m not talking nickel and dime stuff but bigger ticket items. definitely going to hurt sellers.
also Now the USPS is also raising their Priority Boxes especially using Regional A and B Boxes and ebay charges you 10% extra lol What is the worst is that a buyer can rate your shipping price even when you charge less than shipped price. Ebay make millions on shipping. You think they are giving you a break but they take it right back
eBay is much less relevant for me now. In my eyes, it stood above the competition because I could score free shipping, WITHOUT a membership fee, and I could generally avoid taxes. Sure, eBay still is a great place to find just about anything, especially used and/or vintage/rare items. The bottom line is the bottom line though. As buyers, THAT is what we pay attention to. We don’t care what factors play into the grand total, and what does or does not go into a seller’s pocket. We care about getting deals, and saving money. With the new tax ruling in effect, this has become MUCH harder for both sides. Sellers are going to get lowball offers left and right, especially in states with high tax rates. Between eBay fees that have long been in place, coupled with being forced to charge tax, many if not all eBay sellers are going to start feeling their bottom lines drop out. Buyers will be much more hesitant to spend on eBay. It’s going to push more of us back into brick and mortar stores, as well as have us seek means of doing business with sellers directly or elsewhere, OUTSIDE of eBay. I will be spending my last and final eBucks certificate when it comes, and then I’m out. Chances are, the certificate won’t actually save me any money on the item I purchase. It’s much more likely that it will only cover the tax added to what I buy.
I am a long time supporter of eBay. I have talked it up for years, bringing both my family and friends to the site. We are all on our way out now. Thanks for the years of fun eBay…
R.I.P.
eBay has become each States little tax collection stooges. I hope that whatever little percentage each state pays you that it will help cover some of your revenue losses. Disappointed.
I agree. I haven’t bought anything from Ebay in a few months so it was a huge suprise when recently I added something to my cart and it was $40 something dollar in tax. I use Ebay’s for the deals on special items like autographed items, limited edition, and sometimes imported stuff, and now you don’t get any deal than anywhere else. You spend all that time comparing prices and ebay sometimes offer coupons like the recent 10% off one time use coupon, and that 10% only really covers the tax. I didn’t even know they had added taxes so I ended up not buying the item because I thought the 10% would go toward the cost of the item. I really wasn’t saving anything. Besides some unique items you can get from ebay, there is not real reason to buy it off ebay than other places like amazon now. Now you have to considered the cost of taxes when you bid and buy items. It hurts the seller, and the buyer. I’m just lucky I sold one of my big priced items before the stupid taxes were added.
So, would it benefit sellers/buyers to list an item at a lower price and have the shipping price higher, on lower priced items at least?
When you buy products in Ethe E.U., the VAT (Value Added Tax) is applied to the product’s price, no surprise at checkout. A man’s shirt listed for € 49.00 costs € 49.00 out the door.
And they pay the people in the service industries living wages, No tipping; as in the USA.
The United States of America federal government requires a wage of at least $2.13 per hour is paid to employees that receive at least $30 per month in tips.[4] If wages and tips do not equal the minimum wage of $7.25 per hour during any week, the employer is required to increase cash wages to compensate.[5]
How does my State of NJ get away with charging an eBay sales tax on a piece of used clothing costing under $110? If Kohl’s, Targets, Marshalls, TJ Max, Modell’s etc doesn’t charge that sales tax then how can eBay collect that sales tax? And where does that illegal collection go? Something does’t seem right here.
I will no longer purchase items on Ebay,I agree to sellers price and Ebay tacks on more money after the sale,going elsewhere to buy!!
Amazon, eBay, and many other online retailers have destroyed many local communities because they had an advantage that the local Music, Computer, dept store did not They did not collect sales tax. if the retailer matched Amazon etc, in many cases that could have been much of the profit they would have made.
Also in almost every state, you are required under law to remit the equivalent of sales to the state as a use tax. I learned about when I was audited by may state, here is always a trail with online purchases, An invoice debit card , credit cards, digital payment thru your bank. They looked thru four years and I had to pay use taxes for everything purchased out of state and I was fined.
done with ebay! this is pure corruption! taxing taxed items is unconstitutional!
I’ve been on eBay since the beginning. Sellers only accepted check or money orders. They didn’t ship until payment was received.
Things work until they dont. eBay no longer works for me under this new scam. Fun while it lasted.
Your state officials want you to spend your money locally instead of buying from eBay. If you do buy from eBay they want their cut. With the increased revenue you’ll get no additional services but they will hire more of their relatives, waste the new money, then raise your property taxes.
From now on I will just use eBay to get an idea what something is worth and buy elsewhere. Ive been with eBay since 1999 and this too shall pass. Thanks for not working harder to negate this new policy eBay you shall surly die a slow death now, between the taxes and the untruthful Chinese sellers on eBay. Saying items are in the US and actually sending them from China. Free shipping killed every thing, eBay forced sellers to compete with free shipping. Some of us that sell items that are used couldn’t compete. Loosing money on fees to begin with and then more on shipping and now on taxes. Taxing items that have already had taxes paid on them is just plain wrong. I purchased my last items from eBay last night and other than maybe one more purchase to get my eBay bucks out that’s it. After 20 years eBay and I will part ways. I’ll have to find some other venue to sell nearby for my items.
I just got a bank statement from my bank & it showed up all these sales taxes i wasn’t aware of.Not only is this absolutely absurd 2 charge taxes on Ebay now its all messed up on my bank statement.My statement has the price then all the taxes below it,just like on Paypal.U have 2 try & match this all up & figure it out.It’s so confusing & now i can’t just get my statement & run down my ledger & check it off,now i have 2 deal with all the taxes,what a mess.This is going 2 hurt Ebay more than help it & they will see their sellers & buyers leaving.I bought many things on Ebay & i used 2 sell also some yrs back but now i want nothing 2 do with the whole scam.Bye Ebay.
Does anyone know of an alternative? I mainly use ebay for used / vintage / weird items, so CL, garage sales, thrift stores are good, but don’t have the same mass of items.
I can agree to taxes on new items, but I don’t think the used items I buy and sell should have it tacked on. Goodwill stores in Iowa don’t charge sales tax. I know they do in Nebraska, not sure about other states. Nebraska is another state good at over taxing! Omaha has a restaurant tax that is computed AFTER the sales taxes has been applied to the total!!
Any marketplace is going to be like eBay as the states are making the marketplaces liable for sales tax. As far as used vs. new, that is a common misconception that you don’t pay sales tax on used items. Some states may have some exemptions. But generally, any tangible property in any condition is subject to sales tax when sold. Open stock in retail stores is technically “used”, so that is taxed. Used cars, trucks, trailers, RVs, etc. are taxed. Refurbished items, such as smartphones are taxed. So the idea that you don’t pay sales tax on used items is really incorrect (again unless specifically exempted).
Richard
This is really an outrage, and I’m not easily outraged. I just bought a $350 item and was charged $30 in sales tax. That’s it Ebay I’m don with you – as if they didn’t make enough money now I need to pay sales tax on used items! RIP
This is not eBay’s doing, they are being forced to collect the sales tax by these new state laws. If you want something to change, you need to contact your local Congressperson as both chambers have internet sales tax proposals in committees. If that would change how marketplaces such as eBay have to collect sales tax is unlikely, but it may relieve some small businesses.
This marketplace sales tax collection is also happening on other marketplaces. Used or new is not a factor in determining sales tax. Thrift shops, used car dealers, etc. all charge sales tax (unless otherwise exempted by law). Just because sales tax was not collected on many used items in the past was mostly an enforcement issue, not a legal issue, as those laws have been on the books for decades.
Richard
Why are you defending e bay !! They have been rip off artist from the beginning. Look at all the money they make. As for used items being taxed they may be doing it but that does not make it right !! The item was taxed once and should not be taxed the second time !! Government is out of control !!
It boils down to a wasteful and greedy government thinking that collecting more taxes will increase it’s revenue when what it usually does is suppress the the economy (or a particular marketplace like eBay) and hurt everyone. Boils down to taxation without representation, which is what prompted the original tea party. So sad.
Right on !!
I don’t understand Ebay’s new tax collection rules, from what I’m reading it looks like both buyers and sellers are being charged sales tax and I don’t understand how they or any site selling used items can tax an item that was charged tax when first purchased in most cases many years prior so if they are to collect taxes again and there’s no way to know how many times an item has been sold they could in fact receive monies every time the item is sold, this can’t be legal, I mean they could get tax monies over and over again on the same item. This is nuts and it will effect me as a seller as I can’t afford to lose that kind of money on a used item.
What right do they have to impose sales tax on pre-owned items? The sales tax was ALREADY paid by the original owner when they originally bought the item. This is theft, plain and simple. The state will graft money out of every crevice of human civilization if given the opportunity. If only “moral politician” wasn’t an oxymoron.
I just got charged sales tax on a used laptop purchased from a very small-time seller in another state. This was literally the only item he had listed for sale. There was NO mention of any sales tax being added to the price until AFTER the auction ended and I was at the checkout! SURPRISE!!! I contacted eBay about this and was given a bogus phone number to call for more info about their sales tax collection. Now I’m pissed.
I also don’t understand the consistency…I can look at various listings for the same item on eBay and with some sellers it adds sales tax and with others it doesn’t. WHAT GIVES!? God I hate our government.
To make matters worse with this issue, I just purchased insulin pen needles from an eBay seller, and for the first time ever, I was charged sales tax. I am a diabetic living in Pennsylvania, where these types of medical supplies are exempt from tax. The eBay seller ships from New Hampshire.
As someone previously mentioned, you have no idea that you will be charged sales tax until the final step of checkout. When I complained to the seller, she essentially told me that her hands are tied. It’s eBay who is automatically applying the tax. Now I have to decide if it’s worth the time and frustration of contacting eBay about being charged sales tax on a tax exempt item.
Jim
Whine and complain all you want, but show me anyone out there who sells without a tax added to the final total. Ebay was the exception for many years.
Buyers have been pampered too long by Ebay and Amazon, just to name a few. For years the price you bid is what you paid. Free shipping, no taxes… It was good while it lasted.
Meanwhile USPS, UPS and other shipping carriers are going bankrupt because of concessions that have allowed this to happen. Amazon Prime has the nerve to come up with their own shipping fleet so they can facilitate the “illusion”, that people are getting “free shipping”. Wake up! It is hidden in every purchase.
Without taxes being paid, we are neglecting to realize that these taxes are what fund the infrastructure of our economy’s. The needs of the many out weigh the needs of the few or the one. Things like Medicare, CHIP, Social Security and many more programs would not exist without taxes.
It would have been better to have a straight forward approach and display the VAT (value added tax) before customers got to check out and realize what the “tax” was. This is a dishonest practice because all price, taxes and fees are not displayed until a person is committed to purchase an item. If you want to cancel, you are penalized. Can you say Coercion? Furthermore, it should specify what state is receiving the tax and not some kind of Supposed “Ebay TAX.” That begs the question… Is Ebay making money through this?
I don’t think Ebay or any other facilitator would stand much to lose if the “bottom Line” is actually the “Bottom Line” and a buyer has a fully informed total picture before completing a purchase.