eBay Sales Tax Update

In July, three more states passed marketplace facilitator laws that will impact sales tax on eBay and other marketplaces.

Marketplace facilitator sales tax laws place the requirement to collect sales tax on marketplaces instead of individual sellers.

For those sellers that only use marketplaces, this simplifies the sales tax “problem” created after the US Supreme Court decision in June of 2018.

READ MORE: The fuzzy math by States in sales tax case South Dakota v. Wayfair

However, sellers who use marketplaces and their own website to sell products may need to contact their accountant for details on how sales tax impacts their business.

List of states with marketplace facilitator laws

Based on laws passed to date, eBay will collect sales tax on transactions when buyers are in the following states:

  • Minnesota – effective January 1, 2019 (However, Minnesota has enacted a small business exemption for out of state unregistered sellers whose taxable retail sales into Minnesota are less than $10,000 in the previous 12-month period. These sellers are not subject to the Minnesota marketplace tax laws, and eBay will not be collecting sales tax on these transactions.)
  • Washington – effective January 1, 2019
  • Iowa – effective February 1, 2019
  • Connecticut – effective April 1, 2019
  • District of Columbia – effective May 1, 2019
  • New Jersey – effective May 1, 2019
  • Nebraska – effective May 1, 2019
  • Idaho – effective June 1, 2019
  • New York – effective June 1, 2019
  • Alabama – effective July 1, 2019
  • Arkansas – effective July 1, 2019
  • Indiana – effective July 1, 2019
  • Kentucky – effective July 1, 2019
  • New Mexico – effective July 1, 2019
  • Oklahoma – effective July 1, 2019
  • Pennsylvania – effective July 1, 2019
  • Rhode Island – effective July 1, 2019
  • South Dakota – effective July 1, 2019
  • Virginia – effective July 1, 2019
  • West Virginia – effective July 1, 2019
  • Wyoming – effective July 1, 2019
  • Vermont – effective July 1, 2019
  • Ohio – effective September 1, 2019 (not confirmed by eBay)
  • California – effective October 1, 2019
  • Maine – effective October 1, 2019 (not confirmed by eBay)
  • Massachusetts – effective October 1, 2019 (not confirmed by eBay)
  • Nevada – effective October 1, 2019 (not confirmed by eBay)
  • North Dakota – effective October 1, 2019
  • South Carolina – effective October 1, 2019
  • Texas – effective October 1, 2019
  • Utah – effective October 1, 2019
  • Illinois – effective January 1, 2020 (not confirmed by eBay)
  • Wisconsin – effective January 1, 2020 (not confirmed by eBay)

The states in red recently passed marketplace facilitator laws. However, eBay has not included them in its official list of states and therefore are not yet confirmed by eBay.

Sellers should assume that eBay will follow the new laws passed and will collect sales tax in those states when required.

eBay wants sales tax simplification

eBay sellers and buyers are often confused and angry at the company for this sales tax mess created by the US Supreme Court.

In reality, the online marketplace continues to push for sales tax simplification through federal legislation, which would effectively neuter the laws passed by individual states.

In response to a recent bill introduced in the US Senate that builds on the previous “Online Sales Simplicity and Small Business Relief Act of 2019” introduced in the US House of Representatives, eBay said:

“eBay applauds Senator Shaheen and Representative Sensenbrenner and their colleagues for their support of small businesses. As small businesses struggle to operate in the tax environment created by last year’s Supreme Court South Dakota v. Wayfair decision, eBay continues to fight for small businesses and is working to improve state tax laws. eBay opposes any attempt to impose Internet sales tax collection burdens on small Internet-enabled businesses that struggle enough as it is to compete with big-box retailers.”

What do you think about sales tax in the US today? Does the US Congress need to step in and simplify the process? Please use the comments section below or head over to our Facebook Group for Small Business Sellers and interact with other small business owners.

Follow us on FacebookTwitter, and LinkedIn to stay up to date with relevant news and business insights for your online business.

Similar Posts

One Comment

  1. Richard,
    I’m glad you posted this update from your early in the year post in January… More people will take notice by the time they start buying items for Christmas gifts come October through December. I’ve shared this on my LinkedIn profile.

Leave a Reply

Your email address will not be published. Required fields are marked *