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Do dealers now have to pay sales tax on eBay?
MrEureka
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Now that eBay is starting to collect sales tax on all sales in an ever-expanding number of states, how does a legitimate dealer with a resale certificate avoid paying sales tax on his business purchases?
Andy Lustig
Doggedly collecting coins of the Central American Republic.
Visit the Society of US Pattern Collectors at USPatterns.com.
Doggedly collecting coins of the Central American Republic.
Visit the Society of US Pattern Collectors at USPatterns.com.
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Do you have an resale certificate for all 50 states, or only your home state and what ever state is reciprocal with them? The easiest way to handle it is take the deduction for the sales take you paid when you file your dealer sales tax form.
Why would New York State let me keep sales tax I collected on their behalf? Certainly not because I paid sales tax on my purchases from an out-of-state seller.
Doggedly collecting coins of the Central American Republic.
Visit the Society of US Pattern Collectors at USPatterns.com.
I used my quarterly 'certificate' for ebay shipping supplies yesterday and had to pay sales tax for the first time.
Years ago, when I had a thriving bachelor pad, parties and card games were common place. I made up a little sign for my kitchen, "Shoe tax- 2.00"....No one was amused......
I was just wondering about this earlier. I'm not a dealer, just a collector and I was going to list a few duplicates when the sales tax section came up while I was filling out the listing. I backed out and figured I'd ask my tax guy.
Even if I sell just a few coins per year and make just a couple of bucks I have to collect sales tax and pay income tax?
Isn't there a threshold amount where there's no tax until met?
What about if I sell at a slight loss?
What about if I sell at a profit, I assume I'm ONLY taxed on the difference between what I bought and sold for?
Is PayPal and eBay reporting this to the IRS and the states?
I tried reading the explanation on eBay but it wasn't really specific to my state. So I found the website on this very issue for my state's website...... totally written in Martian.
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Sales tax and the loss of PayPal is really going to hurt Ebay...
Ask ebay. There are a lot of re-sellers on ebay who have state sales tax exemption certificates for their inventory purchases. Also, if you have a CPA ask him/her.
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As for sales tax, I don't believe that there is a threshhold for each seller. That's because eBay does more than 100K in each State, and it's their volume that is considered, not yours.
As for income tax, nothing has changed. You make a profit, you're obligated to pay the tax. But eBay is not involved in that yet.
Doggedly collecting coins of the Central American Republic.
Visit the Society of US Pattern Collectors at USPatterns.com.
I do have a sales tax exemption certificate, and I know that I'm supposed to be exempt from sales tax on my purchases. The problem is that eBay does not know that. And even if I tell them, they're probably not ready to do anything about it. But I'm not sure about it, so I asked the question in the OP.
Doggedly collecting coins of the Central American Republic.
Visit the Society of US Pattern Collectors at USPatterns.com.
Selling over $21,000 on eBay will get you a tax form, regardless of how many accounts are used.
Any time I sell over $21k in a year I get tax forms. Under that, Nada.
Edit to say, that was income tax forms. I have never had to deal with sales tax, for any state, yet, but I am not a dealer, I just sell extras and random stuff on eBay, mostly coins. But I have sold Lego, comics, tools, books, and various sporting mechanical parts and pieces.
Also I do not get any tax money that eBay collects.
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Andy,
already had a couple of dealers complain to me about this, but I don't think ebay has a way to differentiate exempt buyers from normal buyers at this time. Everyone in a specific state thier collecting for is considered equal and therefore taxed the same.
That's for income tax and not sales tax. If you do over so many transactions or dollar volume then eBay will report or send you a list of your sales.
My state doesn't charge sales tax, so if I charged it, I would be committing fraud. May be cheaper for some collectors to purchase from states without sales tax, which will hurt states coffers that do.
Andy. EBay does not plan on collecting sales tax from You, or anyone in New York, at this time - agreed? They have started collecting it from MN and WA residents only and will start collecting it next month from IA residents. More states to follow in April - July, but not NY. So, no issue for you right now. Storm clouds ahead- I fear so!
Wondercoin.
No sales tax in WA state for coins/bullion, so if it is coins/bullion related, not sure why ebay would try to collect it "on behalf of WA state".....
I've been told I tolerate fools poorly...that may explain things if I have a problem with you. Current ebay items - Nothing at the moment
They already are trying to collect. Every coin or bullion item I've put in my cart, shows a tax to be collected on check out. I have officially changed my shipping address to my parents address in Oregon, just across the river.
I'm ready to go start dumping tea in the harbor!!
I had some ebucks to use, and used the 8% the other day, and purchased a 1/10oz from apmex. I made sure to look....there was no attempt to charge me tax....
Edited to add:
I just "played with" a dozen listings under the Coins and Paper Money category (half cents, bullion, gold, etc) from sellers big and small. None of them showed tax when I put them in my cart to buy.
Looking at another item, NOT in the Coins and Paper Money category, I WAS going to be charged tax if I went through with the purchase.
May screw up things for people that used to get deals from bullion/coins in the non-coin category when coupons would only work outside of the coins/bullion categories....
@jtlee321 - care to share a link to one of the items charging you? I can look at it and see if it charges me as well.
I've been told I tolerate fools poorly...that may explain things if I have a problem with you. Current ebay items - Nothing at the moment
Not to mention the escalating fees and shipping. Small seller is no longer welcome.
I am tired of the incessant greedy revenue grabbing by various governments. I currently live abroad and the recent SC ruling made my online purchases taxable. My response was to lower my auction bids accordinly-one increment-and end up losing by that one increment. I believe I will sit on the sideline until I am able to establish a new 'residency' in a tax free state. I am retired, anddon't wish the 'State' along with record keeping to be any party to my hobby.
I agree. Over the years the goobermint at all levels continues to grab, grab, and grab more and more money to keep the monster growing.
The problem is big government. The sooner we recognize that and vote better people into office, the better.
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Andy, you ask a great question.
We posed this question in the ICTA meeting at the FUN show and the short answer is if eBay is collecting sales tax in your state, you will have to pay sales tax for your items. They do not have a way to differentiate your resale certificate from a typical buyer. EBay suggests contacting each state that has collected the sales tax and you should theoretically be able to get it back since it was collected erroneously...
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In California, I have a resale license. I contact the seller, give them my resale number and they take off the tax.
I do the same for other resellers in my state.
I am based in Texas and coins and bullion are exempt here. I have seen no effort from eBay collect tax from me at this time. However will keep your observation under advisement if I see them doing it. I also have a TX resale liscense.
I buy a lot of material from Auction houses out of state, no tax from them either.
Sales tax expense is a part of expenses of the business, and also a sch c write off which I call Opex. I have a fixed budget for this and it is more than offset by what I call theoretical fav reval (which I don’t book) for inventory purchases below CDN bid. On the slab I have a code for cost, CDN bid (basis for CPG) and retail code could be TPG MV, CPG or both. My goal get somewhere between bid and retail MV. If I wholesale a coin at a show it would be bid plus a dollar amount or say bid plus 10 pct say on a coin I purchased for $210 but CDN bid $240. I have no trouble getting CPG but recently I sold a coin for $180 (around CPG) I had $110 in due to fac auc purchase COS wide but bid was $150. Nice coin but time to move it. Variable selling expenses and Opex both a sch c write off.
There is a matrix on ebay to establish if YOU want to collect sales tax:
Here's how to set up your tax table:
Go to Site Preferences in the Account section of My eBay.
In the Payments from buyers section, select Show.
Select Edit in the Use sales tax table section.
Fill in the sales tax rate for any state where you want to charge sales tax. If you're also required to tax shipping and handling in that state, select the Also charge sales tax on S&H check box.
Select Save.
The short version, it gives you a check box for all the states, and you check which one you want to collect sales tax for in your listings. I am in Texas, and I have Texas checked, as I do have a sales tax permit, and I do remit sales tax to the State of Texas.
If someone from (Fill in the state) other than Texas gets charged sales tax, that is not something I control, not something I see, and I do not get a check from ebay to send off to that state. For Items I sell in Texas, the sales tax is added to their invoice, comes to me via paypal, and ebay does not charge a fee on the sales tax amount.
Except for ebay supplies, I have not been charged sales tax yet.
I recently made a purchase on ebay (non-coin) and was charged sales tax....I reside in NYS...I do not have a resale license, but was surprised to see the tax added...Looks like I will take a bit more time and diligence and save on future buys avoiding ebay.... Cheers, RickO
So what I'm gathering here, is as a collector if I sell one or two coins from my collection on eBay and my state does not exempt coins/bullion, I have to collect and submit sales tax even if my profit is just literally a few dollars?
What if I sell at a small loss?
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"What if I sell at a small loss?"
That has nothing to do with sales tax. It goes against your income (tax).
Yes, I should've known that but in my rage that poured over from last night I haven't grabbed any coffee yet, lol.... So no matter what, dealers, casual sellers, sellers that might sell ONE SINGLE THING all year have to collect sales tax and deal with it if not otherwise exempt?
It's just not worth the friggin trouble. I'll sell to dealers at coins shows. For me, it's not about the taxes, it's the hassle of it all. It's BS.
Great transactions with oih82w8, JasonGaming, Moose1913.
For those interested (best I could come up with)...
EBay Collecting sales Tax:
January 1, 2019- MN, WA
February 1, 2019 - IA
April 1, 2019 - CT
May 1, 2019 - NJ
July 1, 2019- PA, OK, AL
So, no problem in NY for OP.... yet!
Wondercoin
P.S. I believe MN may have an exception (possibly even with eBay) for small businesses tied to the amount of business done in their state last year.
Will eBay use software to automatically add the sales tax rates of these states to a seller's listing / invoice, or will the seller be obligated to manually add the rates ?
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I had to pay a sails tax for my gold escudo, of course the coin was worth it but I had to pay an extra $30
Socialism always has its apologists.
If eBay took care of submitting the tax for the sellers it would help a lot.
Great transactions with oih82w8, JasonGaming, Moose1913.
I thought they did.
That's not going to work when eBay is the one collecting the tax.
There's no hassle to the seller. eBay is doing the collection
As each state figures out their laws and rules on sales tax post-Wayfair, their rules are going to apply to sellers. Unequally, unfortunately.
Ultimately, eBay may HELP, but it's your responsibility to collect and remit the appropriate tax.
There is also a nice little trap in the UCC (Uniform Commercial Code) that I read about last week. SD (Wayfair) collects from sellers who have 200 sales or $100,000 in sales to SD customers. What people might not realize is that if you sell a bag of 200 2x2s, the UCC treats each item as a separate sale and POOF you've hit the 200 limit.
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Ok, so to make it clear once and for all, eBay collects it but I have to submit it. Correct?
Great transactions with oih82w8, JasonGaming, Moose1913.
No, supposedly eBay is collecting and submitting in the NEW STATES that have passed internet sales tax. As of now, they do not do it in other states. For example, in NY where I am, I still have to collect and submit on sales to NY buyers only.
Here's the eBay link:
https://community.ebay.com/t5/Announcements/Upcoming-changes-in-how-Internet-Sales-Tax-may-apply-to-your/ba-p/28962962
Thank you. I searched all over and couldn't find answers.
Great transactions with oih82w8, JasonGaming, Moose1913.
eBay and PayPal are taking care of the Sales Tax. If required in your state eBay adds the tax. The buyer pays the tax. PayPal will send you your sales price and send the tax to eBay. It is then eBays problem.
What I don’t understand yet is I live in a state with no tax on coins or bullion. I put some bullion in my cart from APMEX the other day and they tried to charge me tax so I dumped my cart.
They didn’t use to so hopefully they will soon correct this.
Uh, whose sales tax are they collecting? Is it the seller's state tax, or the buyer's state tax?
Buyer. They are trying to keep residents from avoiding the sales tax y buying out of state.
Based on the last email I got from eBay, they currently don't have a way to process a reseller certificate, but note that if you get charged, you may be able to file with your state to get it back.
"Reseller Licenses
As of right now, eBay does not have the capability to process a buyer’s status as a reseller (and hence not charge a tax). We are in development of a buyer exemption system that will allow buyers to submit tax exemption certificate. In the meantime, buyers may be able to get a refund or credit from the state for sales tax paid to eBay. The refund process differs for each state and the buyer should contact their tax advisor or the department of revenue in the buyer’s state for further details on securing a tax refund. "
That's directly from the coins/bullion category manager.
No longer... they bungled the implementation at the start of the year by not excluding non-taxable items.
Ok, I finally found this that should be helpful for anyone in NJ. I don't know if it's the same in other states:
In part:
"Economic Threshold
Consistent with Wayfair, legislation was enacted that requires certain remote sellers to collect and remit New Jersey Sales Tax. For sales made on and after November 1, 2018, a remote seller that makes a retail sale of tangible personal property, specified digital products, or services delivered into New Jersey must register, collect, and remit New Jersey Sales Tax if the remote seller meets either of the following criteria (the economic threshold):
The remote seller's gross revenue from sales of tangible personal property, specified digital products, or services delivered into New Jersey during the current or prior calendar year, exceeds $100,000; or
The remote seller sold tangible personal property, specified digital products, or services delivered into New Jersey in 200 or more separate transactions during the current or prior calendar year.
A remote seller that does not meet either of these criteria does not have to register with the Division of Taxation to collect and remit New Jersey Sales Tax.
Marketplace Transactions
Remote sellers are not required to collect and remit Sales Tax on the sale of tangible personal property, specified digital products, or services delivered into New Jersey when sold through a marketplace, because the new law requires the marketplace facilitator to collect and remit Sales Tax on all marketplace transactions.
The marketplace is required to collect and remit tax, regardless of whether the marketplace seller is above or below either of the economic thresholds. For additional information on Sales Though a Marketplace, see Technical Bulletin 83."
To view the entire page: https://www.state.nj.us/treasury/taxation/remotesellers.shtml
I hope this helps clarify for some of us here.
Great transactions with oih82w8, JasonGaming, Moose1913.
Thanks for the info, can you share where you found these implementation dates?
This is an e-mail from eBay sent to a friend of mine after he inquired about the Sales Tax issue.
This issue will be fun for years to come. The rules change and each state/locality can and will do different things.
Some states say the 3rd party facilitator is the liable party for collecting and remitting the sales tax.....those are the states that Mitch points out in the E-Bay letter
Some states (even exempt states) are talking about collecting the tax and requiring buyers (both retail and wholesale) to apply for a refund. Have fun getting a refund on a $50 coin. Not worth the time and trouble, and the states know it....wallah they get extra revenue from exempt items.
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I've seen this stated a few times, however, I've not actually seen anything official. The South Dakota department of revenue does not use the term "sales" but rather states "The business has 200 or more separate transactions into South Dakota.". It would seem incorrect to explicitly state "separate transactions" and then count multiple items within a single transaction as separate transactions.
Do you have any official links?
So, ebay and PP are handleing everything for the seller and the seller never sees anything about state taxes. Wonder how refunds to a buyer are handled? hopefully all the involved transactions (sales proceeds and taxes) get reversed.
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