![]() ![]() In states with no marketplace facilitator law, like Florida or Missouri, sellers with sales tax nexus (an obligation to collect sales tax) are still required to collect sales tax from buyers via eBay. If the buyer is located in a state with a marketplace facilitator law, then eBay will add sales tax to the purchase. eBay collects sales tax for most, but not all, states. Do I have to collect tax on my eBay sales? And, in many cases, sellers win because they no longer have to worry about collecting sales tax from buyers in states with marketplace facilitator laws. The states win, because they receive large sales tax payments from marketplaces. Individual states can now require sellers to collect sales tax based on the number and value of sales to the state, called economic nexus, not just physical presence.Īnother way states have now exercised their new right is by requiring the big marketplaces like Amazon, eBay, Walmart and Etsy, to collect sales tax from buyers on behalf of third-party sellers. This means states now have much more leeway when it comes to requiring online sellers to collect sales tax. And the Supreme Court agreed with the states. The state of South Dakota went so far as to take a case regarding ecommerce sales tax all the way to the Supreme Court. And the states realized that they had a better chance to get that revenue from online marketplaces like eBay, Amazon or Walmart than they do from small sellers who might not understand their sales tax obligations. States use this revenue to pay for things like schools, roads and public safety. Long story short, states are always on the lookout for sales tax revenue. The Wayfair decision changed the sales tax landscape by introducing the concept of economic nexus, and paved the way for individual states to pass “marketplace facilitator” laws. ![]() So, most of the time, buyers could avoid sales tax just by purchasing from sellers outside their own state. It would only be added if the seller had set up their eBay account to charge sales tax in the buyer’s state. Why is there sales tax on eBay now?īuyers on eBay, and other marketplaces, used to have something of a free ride when it came to sales tax. If the buyer is located in one of the many states that have introduced these laws, then eBay will charge sales tax.ĮBay collecting sales tax has been a great relief to many sellers, who no longer have to worry about receiving sales tax from the buyer and then remitting that sales tax to the state.Īlso see our free eBay Fee Calculator to maximize your profits. This is to comply with marketplace facilitator laws, and happens automatically during the checkout process. Yes, eBay charges sales tax on many purchases on behalf of the seller, without the seller setting up anything at all. We are here to answer tell you exactly how to deal with new regulations and ebay sales tax processing systems. But eBay does not collect sales tax for every state where it could be due, and your buyers still care about sales tax – and how much you appear to be charging them – even if you don’t. They can just sit back and let eBay take care of it for them. On the face of it, these changes should help simplify sales tax for eBay sellers. Then, many states brought in “marketplace facilitator” laws that require sites like eBay to collect sales tax for third-party sellers, rather than relying on the sellers themselves. Most states quickly took advantage and introduced new “economic nexus” laws. Wayfair meant that states could require sellers to collect taxes based on sales rather than just physical presence. Do you pay tax on eBay sales? How are these new regulations affecting eBay sales tax processes? Is there an eBay tax exemption?įirst, the Supreme Court ruling in South Dakota v. So many people are asking the same questions. There’s been a revolution in sales tax and it affects online sellers everywhere, including on eBay. This post is by Mark Faggiano, founder and CEO of TaxJar. ![]()
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