Now paying taxes on eBay in US

[Punisher5.0]

I got the ebay email. They said that the change is coming in November. For the last year its been hit or miss for me with getting charged taxes for online purchases. It sucks but most states are in debt and the extra money is needed.

[Dragon Princess Yushira]

Good ol' Uncle Sam. Back when people were free to conduct business amongst themselves then this guy rears his ugly head and tries to ruin everyone's fun. Ebay's the latest victim but other victims include: Paypal, Bitcoin, digital buying. Sooner or later, we have to pay tax on stuff we buy on Craigslist, Offer Up, etc. or do we do that now?

[adamchevy]

I think some states reimburse taxes paid on used goods?

[TheCoolDave]

On 10/10/2019 at 11:55 PM, adamchevy said:

I think some states reimburse taxes paid on used goods?

Good luck with that one.... Never going to happen. I guess if you fight it, MAYBE. It would be mound of paper work that would net you $5 on a $500 item you sold because there would be a processing fee. Sigh..

 

It's like the States to double dip in taxes. It's like buying a used car. People who got the car new, paid a hefty tax on the car, and now that I am buying it, I still have to pay taxes on it.

 

They have been doing that for a while now... It's something I need to figure out on a cost.  So now, item cost+shipping+ taxes=actual cost of item. There has a few items I was looking at (over $100) that I passed on because the TAXES would put it over what I wanted to pay for the item. 

[Blazing Lazers]

This has been having the effect of hiding the actual final cost of items from me until I'm ready to check out. For some basic items (games, DVDs, books, etc) the cheapest item listed may no longer be once the sales tax, if there is one, is factored in. And I may not get to know that I until I've already committed to buy one sellers listing. A few percentage points can really make a difference for the worse. It's especially annoying with multiple accounts and shipping locations for gifts.

[+GoldenWheels]

Believe it or not most of you guys have ALWAYS been liable for those sales taxes (seriously, you're SUPPOSED to self report out-of-state taxable sales in most states, no joke, most states have always wanted that money), there simply was no way to catch you in the old days, or enforce your own state's laws on another state. But since Quill Corp. vs. North Dakota was overturned by South Dakota vs Wayfair, many businesses now have "nexus" in a state based on a sales/order threshhold, as opposed to, you know....actually being IN a state or having ANYTHING to do with the state.

 

(if anyone recalls New Egg DID turn over a bunch of their customers data to several states to allow those states to chase those taxes, once the feds came after New Egg, rather than handle any past "liability" themselves or collect, something any business always could have done but, for obvious PR reasons, they didn't!!!)

 

If a company says "well this nexus thing is BS, we won't become your tax collecting arm" that state's DOR will gladly go to the DOR in YOUR home state and make your life a living hell. All the while assessing you for "back" taxes while you are in "non-compliance".

 

If you fellows like THAT, it gets better: states like Texas, Hawaii and Pennsylvania are now attempting to use those sales tax nexus' to say that companies have to pay INCOME TAX in those states, on the sales made specifically TO those states. And guess what? They'll probably get away with it too. And if they do, don't you think EVERY STATE will soon be taxing every bit of business it's citizens do elsewhere? Of course they will. Real good for the consumer right?

 

The irony that some moron somewhere thought this protected "small business" is absolutely comical, this was always a money grab, but that is government for you. The days of "main street" shopping are gone, and they ain't coming back, at least not due to taxes and some supposed advantage internet companies have. What this did do was HURT small and middle sized business immensely. I run two companies, a web company and a mail-order catalog company. We do very well but we are a large "mid sized" company, AT BEST. But, I spent much of my time the last 18-24 months learning EVERYTHING I could about this stupidity so that the companies would be in compliance. So did several other higher ups here, as there is next to NO Guidance or clarity on a lot of this stuff, many of the states are still getting this all straight themselves. So while my small to mid sized businesses struggled to cope and adapt...what do you think Amazon, or Wal Mart, or any other huge co. did? They threw money at systems off the shelf, or threw money to design systems a small to mid sized business could never afford. And the issue for them of compliance was over with in a blink, and if they mess up well, they know the congressmen to get off the hook. Excessive regulation and taxation HELPS big companies in the long run, and strangles small companies growth and innovation right out of the market.

 

Another tid bit...when Massachusetts saw the Wayfair case upcoming, they wrote their own law that was RETROACTIVE, that is, that their sales tax should be collected and remitted immediately, pre-Wayfair. The law was basically always that but they RE-codified it in clearer language. Why? They had no way to enforce it THEN, but if Wayfair lost, they knew they would. Well, Wayfair lost, and so Massachusetts did a nice double dip: You HAD to go to them to be in compliance as soon as the law changed if you met the nexus rule, THEN THEY HIT YOU FOR FOUR QUARTERS OF BACK TAXES for you trying to to BE IN COMPLIANCE WITH THE NEXUS RULE. Thankfully they are the only state that did so!

 

And forget us dinosaurs in the mail order world....do you know much it sucks to throw out thousands of orders forms because new taxable states came on board that month? or changed their rate suddenly? Not having taxes was a big advantage to my rural, older customer who still depends on catalogs and checks. Now I get letters once a week basically saying "If I wanted to pay tax, I'd go to Wal Mart. Take me off your mailing list". Mail-order EVERYTHING is hard now...my customer has to do ridiculous math they never had to before, and did you know in some states shipping is taxable, but not handling, in some it is the other way around, and in others it depends on if you COMBINED THE TERMS???? Gaaahhhhhhhhhhhhhhhhhhhhhhhhhh!!!!!!

 

With EBay and Amazon (not my forte as we no longer sell on either) I think pretty much everyone has to register as you are considered a "marketplace seller" and many nexus laws have SPECIFIC clauses regarding marketplace sellers (so obviously they are least partly designed to GET Amazon and EBay third party sales)

 

Oh AND....every state sets their own nexus law (most are something like $100,000/200 transaction, some say AND with those two clauses, some say OR, some have limits as high as 500k). Until you hit those tiers, you don't need to register or collect. But the MINUTE you do in ANY YEAR, you need to collect and remit from there on out. So you need to know the nexus rules of like 45 states (I think it is 5 with no sales tax), find out if you are over/under, and ALSO know IF/WHEN you'll go over!

 

Where is Congress to at least help install a flat, uniform "internet" tax that could be easily handled by all 50 states in one system, making at least EASY for businesses to comply? Nowhere to be found (No they don't really have the right but neither should these damn states to do this!!!). So if you collect in Colorado, but also don't collect and remit to those home rule cities, you're in violation in many cases, you're not collecting the whole tax. If you collect in Louisiana but collect only state taxes but not the PARISH taxes (yup) you're also in violation. It is the freakin' Wild West so far as states seeing dollar signs and grabbing at every dollar they can right now.

 

And amazingly...do you hear from your local governments how much extra tax dollars they suddenly have? This should be a big boon right to state budgets? The states just tapped into a HUGE reserve of taxable sales they couldn't get before. But are YOUR taxes going down locally? I bet they haven't.

 

Fucking out of state sales taxes! Don't get me started!!!! (TOO LATE!!!)

 

 

 

[Schlortt]

It doesn’t look like there is much hope of this being addressed anytime soon.   
 

https://sentinelksmo.org/wayfair-decision-hammering-catalog-sellers-into-extinction/
 

 

[+LS650]

What happens if you sell to an overseas buyer, say like me in Canada?

[RodLightning]

The black market is looking better and better

 

Used goods?  Damn them all to hell!

[ianoid]

I filed for an exemption as a reseller and succeeded. Mind you I do pay taxes on what I sell on eBay already. Not that they asked, I doubt it matters to them. I also have a seller certificate and tax id in my state. Now I am not paying sales tax on purchases. 

[Tanooki]

I bought Gradius II (PCE CD) the other day from Japan and got slapped with just over 2.50 in taxes.  What the hell and who gets it?  I'm curious how this is even legal let alone justified since I didn't buy it from an American or anyone using an American state/territory to do business.  As someone who does use ebay actively locking in US only locations I've been seeing it be a bit harder to move items, and worse, since those pricks collect that FVF I'm being taxed on shipping too from the looks of it (and if it is) which is even more disgusting.  So what do I got to do, raise my flat shipping charge 50 cents or a dollar across the board to counter balance this abuse?

[phoenixdownita]

4 hours ago, Tanooki said:

I bought Gradius II (PCE CD) the other day from Japan and got slapped with just over 2.50 in taxes.  What the hell and who gets it?  I'm curious how this is even legal let alone justified since I didn't buy it from an American or anyone using an American state/territory to do business.  As someone who does use ebay actively locking in US only locations I've been seeing it be a bit harder to move items, and worse, since those pricks collect that FVF I'm being taxed on shipping too from the looks of it (and if it is) which is even more disgusting.  So what do I got to do, raise my flat shipping charge 50 cents or a dollar across the board to counter balance this abuse?

For a buyer it's relatively simple these days.

If you live in one of the "taxed" states in the US, no matter where you buy from (eBay, Amazon etc...) and where the good originally is shipped from (same city or internationally) you get charged your own state sales tax.

In a way it's fair, your state gets to collect money as it does from any other sales on the land (so to speak). It doesn't matter where the seller is located (international or not) ... the not so "fair" part is that the tax is collected directly by eBay/Amazon/etc... despite the amount of business that that particular seller has performed in the state and that means some tax inevitably is collected that shouldn't (some businesses do stay under the limits but I don't think eBay/Amazon/etc are keeping tabs on that).

 

In the end though as long as the local police station, fire station, homeless shelters, schools and whatnot gets to see some/enough of the tax money I don't feel bad one bit. If that money goes into the pockets of some corrupted politician it is a different matter but the solution is not by avoiding the tax. In a way the internet tax loophole was in general unfair to local business, having the tax match the sales tax of where the good is directed seems somewhat reasonable and on par with other purchases of taxable goods you would do when living in said state.

 

We can for sure question if there should be a tax on used goods or not, but for example for cars the tax is definitely there (at least in my state), and yes it did change some of my purchasing habits, some time I do not buy at all, some other times I did find local options that where on par or even cheaper ... in the end my world did not get turn upside down however annoying I found the tax in the beginning, especially the fact that postage is taxed too, I understand that if it wasn't it would be abused similarly to when eBay didn't charge a fee on it, it's a matter of 2 wrongs here but at least the actual tax on the postage tends NOT to be the deal-breaker.

[adamchevy]

I think it’s stupid that we have to pay taxes on used goods. I can understand paying sales tax on new items from a store or site like amazon. I can understand even paying taxes on items sold by sites like Newegg and Atariage on eBay that have seller accounts. But buying items from individuals that resell their new items seems like I’m still buying it used or second hand. And paying taxes on it seems like a cash grab.

 

 

[Tanooki]

Phoenix look I agree with you entirely in principle as it would be pretty stupid and awful not to, taxes sucking or not, in a crude sense keep the lights on and you relatively safe.  But, where I was nitpicking is that I bought from a Japanese ebay member living in Japan and paid US tax to what??? whom??? exactly.  They don't need to collect American tax, same thing happened also with another item I picked up in Canada too, same bs, and I'm really sure ebay sent Canada a nice tax check right along with Japan.  They pocketed it as far as I'm concerned.

 

The way I see it with used second hand items, they should and should NOT be taxed depending on the source of said good.  If I go to a Half Price Books or some mom and pop, damn skippy, they're legit taxed business.  Where I draw the line is the crock of shit a select few states in the US pull, one being where my friend Rob lives (Mass) where they tax anything second hand.  They give single people like myself a $600 budget for the YEAR.  If I decide to run a garage sale, a facebook sale of a few items, ebay, whatever... if it crosses $600 they require me to fill out full blown tax forms and pay some sol proprietor level/contractor level tax fee which amounts to after figuring SS, medicare/caid, state and general fed like nearly 50% of what you take in.  That's some extortionate level crap.  Rob basically won't run garage sales, he has abandoned ebay and mercari after coming near the $600 cap and has resorted to under the table stuff through local pick up and isn't reporting it.  I wouldn't report it either as that's sheer evil.  It's no wonder some people rag on that state as Taxachusetts.

[krslam]

10 hours ago, Tanooki said:

Phoenix look I agree with you entirely in principle as it would be pretty stupid and awful not to, taxes sucking or not, in a crude sense keep the lights on and you relatively safe.  But, where I was nitpicking is that I bought from a Japanese ebay member living in Japan and paid US tax to what??? whom??? exactly.  They don't need to collect American tax, same thing happened also with another item I picked up in Canada too, same bs, and I'm really sure ebay sent Canada a nice tax check right along with Japan.  They pocketed it as far as I'm concerned.

 

No, the sales tax collected gets paid to the state where YOU live.  What state or country the seller lives in has nothing to do with it.

 

[Tanooki]

I get that, I just dislike paying taxes on a foreign item because of some crappy rule that was cooked up.

[phoenixdownita]

19 hours ago, Tanooki said:

I get that, I just dislike paying taxes on a foreign item because of some crappy rule that was cooked up.

It's no longer a tax on the good if it ever was. It's a tax on the sale itself (aka money passing hands in exchange for goods/services etc) hence the various states decided to collect it on any and all sales whose recipients live within their boundaries.

 

It's not terrible per se as it levels the playground, I agree it's annoying but for a rather counterintuitive reason. In fact had it had been there all along since the beginning (of internet related sales) we wouldn't even be talking about it.

 

We used not to pay it due to a loophole that on-line retailers exploited to the fullest (can't really blame them either). I think most if not all of the US states but also other countries will follow suit. Seen as a tax on the sale act itself makes it obvious the what and the why.

[+GoldLeader]

It's annoying as shit!   That is all.

[phoenixdownita]

9 hours ago, GoldLeader said:

It's annoying as shit!   That is all.

Agreed, but on the same level as any other tax.

[+GoldenWheels]

On 12/25/2019 at 12:52 PM, Schlortt said:

It doesn’t look like there is much hope of this being addressed anytime soon.   
 

https://sentinelksmo.org/wayfair-decision-hammering-catalog-sellers-into-extinction/
 

 

“When I talked to one state official, I said ‘you’re a CPA.’ ‘Yes, sir. I am.’ ‘You’re a business owner.’ ‘Yes.’ ‘You’re an entrepreneur.’ ‘Yes, sir.’ ‘You’re also a state senator.’ ‘Yes, sir. I am.’ ‘And you understand how disruptive this is?’ ‘Yes, I do.’ ‘Why are you doing this to us?’ ‘Because you don’t vote for me.’

 

Almost sounds like...taxation without representation.

 

“Politicians love to tax people that have no standing, no ability to make them pay the consequences,” Davison said. “Departments of revenue are released from our conversation with them are largely indifferent to all of these issues and concerns.”

 

Worse, when Davison and his colleagues argue on Capitol Hill that this is destroying industries they’re told if the problem is as bad as they say, there would be litigation.

“When I’m on the Hill talking about what a tragedy this is they say, ‘where’s the litigation? If this is as bad as you say, there’s going to be litigation all over the place. We don’t see any litigation. There’s no problem here.'”

 

Unfortunately, the small retailers who are most impacted by Wayfair have the least resources to fight.

 

1000% correct. Our companies had two choices...spend our time and money coming into compliance, or spend it fighting a court battle that wouldn't be decided quickly, and if it goes against you.....the company STILL owes all those taxes.

 

The giants of the world with the tech ability to handle this easily would never sue to overturn this however...in this case government intervention is squashing medium sized companies who could someday become big ones, and keeping smaller ones from ever WANTING to become medium sized. Why would Amazon or Walmart want to help Wayfair come up on them? They wouldn't.

[Goochman]

On 10/7/2019 at 8:27 PM, Albert said:

How is it different than buying items mail order before there was an Internet? 

Technically you were supposed to line item all your mail order purchases on your State taxes and pay tax on them during filing.  Of course no one did this.

 

 

[ToddL]

If it's based on the buyer's location, why is it that sometimes eBay charges me sales tax and other times not (I'm in Illinois by the way)? And I can't seem to figure out if sales tax will be charged until I put something in my cart--which means I don't know for auctions until after I've won.

 

I just checked the last 15 items I've purchased on eBay, and I was charged sales tax only once. I looked at that particular listing--seller is from another state and I couldn't find any indication in the listing that sales tax would be charged. It just says "Taxes may be applicable at checkout" but it says the same thing for the items for which I didn't pay sales tax.

 

I recall at least one other item last year that I was charged sales tax unexpectedly so it's not just this one seller.

Edited January 9, 2020 by ToddL
Added my state

[krslam]

11 hours ago, ToddL said:

If it's based on the buyer's location, why is it that sometimes eBay charges me sales tax and other times not (I'm in Illinois by the way)? And I can't seem to figure out if sales tax will be charged until I put something in my cart--which means I don't know for auctions until after I've won.

 

I just checked the last 15 items I've purchased on eBay, and I was charged sales tax only once. I looked at that particular listing--seller is from another state and I couldn't find any indication in the listing that sales tax would be charged. It just says "Taxes may be applicable at checkout" but it says the same thing for the items for which I didn't pay sales tax.

 

I recall at least one other item last year that I was charged sales tax unexpectedly so it's not just this one seller.

According to ebay's tax page, they only started collecting sales tax on shipments to Illinois on Jan 1 2020, so you'll likely see it on all purchases going forward.

[Scooter83]

On 10/9/2019 at 5:48 PM, krslam said:

IF they're doing it right, the tax collected goes to the buyer's state, not the seller's,  so if your state has no sales tax you as a buyer should pay no tax. Wouldn't surprise me a bit to find that eBay is skimming a bit for themselves, though.

Either skimming or reinvesting for the time they have it before they have to pay the tab quarterly.  I wouldn't be surprise if they invest the funds  make a little something then pay the taxes when needed 

[Defender II]

On 1/8/2020 at 10:56 AM, Goochman said:

Technically you were supposed to line item all your mail order purchases on your State taxes and pay tax on them during filing.  Of course no one did this.

 

 

You're correct about needing to pay taxes on out of state purchases but to say no one paid their sales tax for online purchases is incorrect. I have and continue to do so, so I'm sure others have as well. Amazon, eBay, etc. collecting those taxes is eliminating my need to track and pay them myself, which us much easier for me. If a company is doing business in a country that country has a right to tax them. If a company is doing business in a state that state has a right to tax them. Income and/or sales. It's a part of why Americans fought and died for independence from being taxed without representation.

 

The only thing I haven't checked yet is... If I return an item this year that I paid taxes on last year will they give back the taxes I paid? Has anyone experienced that?

 

I like the schools, roads and other public services in my state which are paid for by my taxes. A portion of my sales tax in my state is for local sales tax, so it comes back to where I live. I've been to every state except Hawaii and lived in California and North Dakota for many years and seen the conditions where they didn't have the funds locally to build and maintain them.

 

I don't think we should be paying sales tax on used items, but that's the law in my state. Once a sales tax is paid, I think that should be it unless the item has been significantly changed or improved. We can fight these taxes if we want. What's great about the USA is if we don't like something we have various ways to get them changed as mentioned before with lawsuits, but there's also protests, and voting. The best way is to vote for representatives that support our views, such as the elimination of sales taxes if your state has them.