Sales Tax on eBay

Jerryc41

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I was surprised to see a separate charge on my credit card for a uke purchase on eBay. I realize that online sellers must now charge sales tax, but it surprised me seeing it as a separate entry. So, be prepared. Reverb doesn't seem to be doing that. Maybe they found a loophole.
 
I was surprised to see a separate charge on my credit card for a uke purchase on eBay. I realize that online sellers must now charge sales tax, but it surprised me seeing it as a separate entry. So, be prepared. Reverb doesn't seem to be doing that. Maybe they found a loophole.

I thought I heard on the news that it was supposed to start on July 1, so Reverb might not have found a loophole.
 
It could be that some merchants include the tax in their list price.
 
I would think some of it has to do with the size of the vendor and location. The one problem that occurred when this was implemented was being able to identify all the various tax rates that can alter by county, not just state. It will drive some sellers away if they end up being liable for the tax.

The easiest solution would be a single nationwide rate. Regardless, I’m not pleased about having to pay sales tax on a used item; a second taxation.

John
 
I was surprised to see a separate charge on my credit card for a uke purchase on eBay. I realize that online sellers must now charge sales tax, but it surprised me seeing it as a separate entry. So, be prepared. Reverb doesn't seem to be doing that. Maybe they found a loophole.

Did you pay by Paypal? Buried somewhere in the listing did it say you would be charged separately for sales tax? If the total amount charged equals what you authorized to be charged, maybe that's just how they have set it up to keep the tax separate.
 
I would think some of it has to do with the size of the vendor and location. The one problem that occurred when this was implemented was being able to identify all the various tax rates that can alter by county, not just state. It will drive some sellers away if they end up being liable for the tax.

The easiest solution would be a single nationwide rate. Regardless, I’m not pleased about having to pay sales tax on a used item; a second taxation.

John

Individuals don't collect sales tax. Only those operating a business do. Individuals don't have a sales tax number, and therefore don't fill out sales tax returns, nor do they have any way to remit the taxes to those states. Only buy used ukes from individuals if you don't want to pay the tax. Antique and second hand stores collect sales tax.
 
Reverb charged it on my last purchase from an individual. Kind of a shock.
 
I saw something recently that eBay will be collecting sales tax for purchases in certain states, rolling out at various dates this year to comply with tax rules for those states. I believe eBay will be collecting and remitting to the states so the seller doesn't have to deal with it. Not sure why I care, living in Canada, but I go down all kinds of strange rabbit holes. :rolleyes:
 
Individuals don't collect sales tax. Only those operating a business do. Individuals don't have a sales tax number, and therefore don't fill out sales tax returns, nor do they have any way to remit the taxes to those states. Only buy used ukes from individuals if you don't want to pay the tax. Antique and second hand stores collect sales tax.

I would agree up to a point for something like Craigslist. Although I imagine some states require the collection and remittance of sales tax buried in their tax laws but it has been unenforceable. Things have changed for online sales through a “selling” site such as eBay, Reverb, Etsy, etc. Amazon has been adding sales tax to most everything for a while. If think that there has always been a requirement for online sales, but enforcement and loopholes made it not practicable.

The old law had a provision that required a physical presence in the state of delivery to require the remittance of sales tax. That has gone away. I believe that some states allow for a threshold that needs to be exceeded if there is no presence in the delivery state, I’m sure that provision is temporary. For the selling/auction sites it will probably always be added since the site has no idea what other transactions have occurred elsewhere.

It is less about leveling the playing field and more about an additional source of revenue. This is easy pickins’ for states and I see no reason that they will give any relief.

John
 
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South Dakota v. Wayfair, Inc allowed states to tax remote sales by large sellers (typically matching SD's 200+ shipments into state or over $100K). Some states jumped on that immediately. Some are gradually starting to do so. Ebay and Reverb are both marketplaces affected by this ruling and publish their sales tax policies to comply with state laws. Prior to this the user still owed the tax, but without reporting on the sales it was essentially honor system.
https://reverb.com/news/what-reverb-sellers-need-to-know-about-new-sales-tax-rules

https://www.ebay.com/help/buying/paying-items/paying-tax-ebay-purchases?id=4771

In my recent purchases, Ebay ran the item and sales tax separately. Reverb put them as separate line items on the same charge. No real difference to me.

Looking up the sales tax for a given destination is pretty easy in the computerized era, and it's been necessary for ages for in-state sales. This is definitely an area where ebooks are better than dead trees!

--Rob
 
Looking up the sales tax for a given destination is pretty easy in the computerized era, and it's been necessary for ages for in-state sales. This is definitely an area where ebooks are better than dead trees!

--Rob

I agree that electronic data makes it easier, to a point. Recently Illinois has added local sales tax to online sales without a physical presence. Not sure what national databases exist and maintaining currency of that data when local initiatives are in the mix.

John
 
Regardless, I’m not pleased about having to pay sales tax on a used item; a second taxation.

This seems wrong. I get retailers who set up online stores on eBay. But it seems wrong philosophically for two private individuals to collect and remit sales tax on used goods. I’m not saying you’re wrong. I’m saying it seems wrong. I agree with you about not being pleased.
 
Check your state laws. In Tennessee, if I buy something from out-of-state and the seller does not charge sales tax, I am supposed to voluntarily declare it and pay a use tax.
https://www.tn.gov/revenue/taxes/consumer-use-tax.html

While I think that may also be true I thought our state law stated that non-retailers defined as someone who makes less than 3 transactions per year and the buyers did not have to mess with sales or use tax. Who knows what the laws are now. My point is it seems wrong and overly taxing (pun intended)
 
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