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 Post subject: eBay Now in Sales Tax Collection Business
PostPosted: Fri Jul 05, 2019 2:46 pm 
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Victor Jr
Joined: Mon Apr 22, 2019 9:22 am
Posts: 13
Dear Buyer, 

eBay is now legally required to collect and remit sales tax on behalf of sellers, for items shipped to buyers in certain states. If you are a tax-exempt buyer (e.g. a charitable entity, reseller etc.), you can submit a tax exemption certificate to eBay and make purchases on ebay.com without paying tax. 


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 Post subject: Re: eBay Now in Sales Tax Collection Business
PostPosted: Fri Jul 05, 2019 2:57 pm 
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Victor O
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Look for the Dog
Joined: Fri May 18, 2018 7:49 pm
Posts: 83
Location: Indianapolis, IN
Something else to this Ebay sales tax thing. I live in Indiana and I just purchased yesterday an item from a fellow in Florida. Ebay calculated the sales tax on the purchase price AND the shipping cost combined. This is not legal when the shipping is "stated separately" on an invoice. And if you think about it, other that free shipping, when is the shipping not stated separately? If the shipping is not stated separately then yes the sales tax can be on the entire amount. This I found directly from the Indiana Sales Tax site. Ebay better get their act together on this one!

Carlton Smith
Indianapolis, IN
electrolaman 64


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 Post subject: Re: eBay Now in Sales Tax Collection Business
PostPosted: Fri Jul 05, 2019 6:35 pm 
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Victor VI
Joined: Tue Mar 23, 2010 7:00 pm
Posts: 3711
Location: Western, WA State
This has been going on since 1 JAN 19. This is not ebay's fault. The sales tax states have now pushed ebay and other online retailers to collect sales tax. If they don't, then the attorney generals will sue ebay, and other online retailers , so they have to comply. I live in WA State, and that was one of the first states to start this nonsense. When I bid, I take into account the sales tax within my bid. When there is a buy it now, and an offer, I'll do the offer within the tax. If the seller accepts my offer, great I thank them. I let them know that it helps with the sales tax.
Harvey Kravitz


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 Post subject: Re: eBay Now in Sales Tax Collection Business
PostPosted: Fri Jul 05, 2019 10:34 pm 
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Victor V
Joined: Tue Jan 21, 2014 12:55 am
Posts: 2447
Location: Eugene/ Springfield Oregon USA
Phonofreak wrote:
This has been going on since 1 JAN 19. This is not ebay's fault. The sales tax states have now pushed ebay and other online retailers to collect sales tax. If they don't, then the attorney generals will sue ebay, and other online retailers , so they have to comply. I live in WA State, and that was one of the first states to start this nonsense. When I bid, I take into account the sales tax within my bid. When there is a buy it now, and an offer, I'll do the offer within the tax. If the seller accepts my offer, great I thank them. I let them know that it helps with the sales tax.
Harvey Kravitz


Yup- it's not an eBay thing. Other online retailers are doing it too. The Supreme Court decided to overturn precedent on a previously decided case from 1992- Quill v. North Dakota- that stated a state cannot charge sales tax on mail order purchases when the retailer has no presence in that state.

There are thresholds stipulated that almost all small sellers will never reach, however, part of that ruling stated that he who collects the money must charge the tax, and since sellers invoice buyers through eBay, eBay must collect the tax because they easily exceed the limit.

Amazon has actually been doing this for some time.
"He who dies with the most shellac wins"- some nutty record geek


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 Post subject: Re: eBay Now in Sales Tax Collection Business
PostPosted: Sat Jul 06, 2019 2:05 pm 
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Victor III
Joined: Sat Apr 20, 2013 3:01 pm
Posts: 620
Location: Coos Bay, Oregon
Oregon does not have sales tax. So if a sale is made in Oregon, the buyer does not have to pay sales tax, even if they are an out of state resident.

Here are a few links which explain it:

https://www.sapling.com/8326260/do-sale ... -purchases
If you have the sofa delivered to an out-of-state address or purchase seeds from a catalog company based in another state, you don't owe sales tax because you took possession of the item in a location the state is constitutionally barred from taxing.

https://smallbusiness.findlaw.com/busin ... hases.html
Where the Buyer Is Located;
Generally speaking, if an online retailer maintains a physical presence in a state that charges a sales tax on most purchases, then that online retailer must charge sales tax on any items that are sold to customers within the home state. However, if the online retailer is selling an item to a customer outside of its home state where there is no nexus, then it is not required to collect sales tax from that customer.


Basically, that means that an internet sale where the seller is located in Oregon, is not sales taxible, even if the buyer is out of state, because the point of sale is in Oregon (the exception being the case where the seller has a branch store in the same state as the buyer, then the sale is subject to sales tax in the buyer's state). The Uniform Commercial Code (UCC), maintains that the point of sale is the place where the buyer takes possession. Also according to the UCC, most shipping companies act as the buyers agent (If the buyer pays the shipping), thus the buyer takes possession when the seller physically delivers the item to the shipper.

Additionally, the State of Washington exempts Oregon residents from sales tax, at least in the Southern Washington area.


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 Post subject: Re: eBay Now in Sales Tax Collection Business
PostPosted: Sat Jul 06, 2019 2:37 pm 
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Victor V
Joined: Tue Jan 21, 2014 12:55 am
Posts: 2447
Location: Eugene/ Springfield Oregon USA
startgroove wrote:
Oregon does not have sales tax. So if a sale is made in Oregon, the buyer does not have to pay sales tax, even if they are an out of state resident.

Here are a few links which explain it:

https://www.sapling.com/8326260/do-sale ... -purchases
If you have the sofa delivered to an out-of-state address or purchase seeds from a catalog company based in another state, you don't owe sales tax because you took possession of the item in a location the state is constitutionally barred from taxing.

https://smallbusiness.findlaw.com/busin ... hases.html
Where the Buyer Is Located;
Generally speaking, if an online retailer maintains a physical presence in a state that charges a sales tax on most purchases, then that online retailer must charge sales tax on any items that are sold to customers within the home state. However, if the online retailer is selling an item to a customer outside of its home state where there is no nexus, then it is not required to collect sales tax from that customer.


Basically, that means that an internet sale where the seller is located in Oregon, is not sales taxible, even if the buyer is out of state, because the point of sale is in Oregon (the exception being the case where the seller has a branch store in the same state as the buyer, then the sale is subject to sales tax in the buyer's state). The Uniform Commercial Code (UCC), maintains that the point of sale is the place where the buyer takes possession. Also according to the UCC, most shipping companies act as the buyers agent (If the buyer pays the shipping), thus the buyer takes possession when the seller physically delivers the item to the shipper.

Additionally, the State of Washington exempts Oregon residents from sales tax, at least in the Southern Washington area.


Correct, but if an out of state buyer buys from me in Oregon on eBay, eBay is required to collect sales tax on that sale per the recent SCOTUS ruling.
"He who dies with the most shellac wins"- some nutty record geek


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 Post subject: Re: eBay Now in Sales Tax Collection Business
PostPosted: Mon Jul 08, 2019 3:42 pm 
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Victor III
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Joined: Sat Jul 14, 2012 9:44 am
Posts: 707
Location: Davie, FL
George,

You are correct. For years, Florida and other states referred to this as a Use Tax, and residents here were expected to pay it on all out of state purchases. The compliance level was very poor. Hence, they are bearing down on the mainstream sellers to comply and remit.

As an aside, I would like to warn those among the collecting community to be careful. Many states are very reliant on Sales Tax revenue, and even casual, part-time sellers should be wary of the consequences when Big Brother looks your way. I have had personal experience in this regard, and can tell you it ain’t fun to be audited and fined 200% of the uncollected taxes + 18% interest.

In my opinion, eBay and PayPal are doing us all a favor, leveling the playing field and taking care of the collections and remittances.

Raphael


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 Post subject: Re: eBay Now in Sales Tax Collection Business
PostPosted: Tue Jul 09, 2019 1:48 pm 
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Victor V
Joined: Tue Jan 21, 2014 12:55 am
Posts: 2447
Location: Eugene/ Springfield Oregon USA
Raphael wrote:
George,

You are correct. For years, Florida and other states referred to this as a Use Tax, and residents here were expected to pay it on all out of state purchases. The compliance level was very poor. Hence, they are bearing down on the mainstream sellers to comply and remit.

As an aside, I would like to warn those among the collecting community to be careful. Many states are very reliant on Sales Tax revenue, and even casual, part-time sellers should be wary of the consequences when Big Brother looks your way. I have had personal experience in this regard, and can tell you it ain’t fun to be audited and fined 200% of the uncollected taxes + 18% interest.

In my opinion, eBay and PayPal are doing us all a favor, leveling the playing field and taking care of the collections and remittances.

Raphael


Here's a chart for you to see when you are actually liable:

https://quaderno.io/blog/us-sales-tax-f ... to-comply/

Note that this does NOT apply when you are selling in your home state or a state in which you have physical nexus. You are responsible for applicable taxes from the get- go in these cases.

Hope this helps.
"He who dies with the most shellac wins"- some nutty record geek


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 Post subject: Re: eBay Now in Sales Tax Collection Business
PostPosted: Tue Jul 09, 2019 3:17 pm 
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Victor III
User avatar
Joined: Sat Jul 14, 2012 9:44 am
Posts: 707
Location: Davie, FL
gramophone-georg wrote:

Here's a chart for you to see when you are actually liable:

https://quaderno.io/blog/us-sales-tax-f ... to-comply/

Note that this does NOT apply when you are selling in your home state or a state in which you have physical nexus. You are responsible for applicable taxes from the get- go in these cases.

Hope this helps.


Most of that link covers interstate transactions with compliance thresholds that probably exceed what most sellers here need worry about. What I was previously warning other readers about was their own home state. Perhaps I was not clear in that regard, so let me clarify: the state you live in (if it has a sales tax) will be the one primarily interested in your sales activities and tax collections (or lack thereof). Even the most casual purchase bought from another private person (in-state or out) must have either a paid sales tax receipt or is subject to Use Tax. The only way to avoid this tax, other than by ignoring it, is to have a valid State Resale Certificate and be able to show that you actively resell what you purchase. If you ignore paying the Use Tax, good luck to you, but with computer technology, tracking numbers, etc., Big Brother is ever more able to know what you're buying and when.

Also, when going through a FL state sales tax audit a few years back, the auditor made note of a number of my large-$ sales that went to other states where they have "reciprocity", and notified those states of the lack of collected sales taxes. I had no control over this, but several of my customers got hit with large tax bills and penalties.

On another note, I have asked eBay and PayPal about their reporting procedures, and they say if you have over 200 transactions in any given year, the total of all transactions are then reported to the I.R.S. and your home state.

Raphael


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 Post subject: Re: eBay Now in Sales Tax Collection Business
PostPosted: Tue Jul 09, 2019 3:49 pm 
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Victor IV
User avatar
Joined: Thu Jan 08, 2009 9:48 pm
Posts: 1454
Location: SF Bay Area, Calif.
When I had a business here in California I had a state resale tax certificate. I was fortunate to never be audited, probably because the amount of business I did in-state was not very much. I did collect sales tax on California sales, and faithfully remitted them, but most of my income came from non-taxable repairs.

Once I retired I gave up my resale certificate and thought nothing more of it.

Two years ago I got a letter from the state tax authority saying that I had failed to report use tax on something that I had imported from Europe. I was clueless as to what they were referring to, and how they knew about it. They didn't tell me the amount of the purchase, or my tax liability, all they did was demand immediate payment with interest. I went in circles trying to figure out what they were referring to, and finally decided that a watch I bought from a dealer in Paris was probably reported by Customs when it came in to the country. It wasn't expensive so I went ahead and calculated the 9% tax plus interest and mailed in my use tax payment, all the while thinking about the liability I'd have if every out of state or out of country purchase had been reported.

A month or so later I got a notice of underpayment. This time they did tell me the total amount due. It seems that Fedex was responsible. I had bought an original tinfoil phonograph from Europe, and it was shipped by Fedex. They reported the declared value to the State and suddenly I was liable for a huge unpaid tax bill.

Ouch.

For sure, you're taking a risk whenever you buy from out of state and don't pay your own state's tax. The odds of getting caught used to be very slim. With everything computerized today, those odds are a lot less favorable.


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