OT: Ebay now collecting sales tax on NJ buyers

[merckxman]

I started seeing sales tax being charged by Ebay on my PayPal account this month, no such charges last month. All the purchases were from out of state, small sellers. Fortunately, I didn't buy anything expensive. There was nothing in the listings themselves that indicated sales tax. The PayPal account shows a separate line item from ebay Inc for the sales tax charge.

I found the following in the ebay forum:

"As a result of a fairly recent decision by the Supreme Court of the United States, individual states can now charge state sales tax on internet sales. eBay collects this from the buyer and remits the tax to the appropriate department of the appropriate state. The seller is not expected to keep track of anything.

So far, the states that have enabled this are Connecticut, Washington, Iowa, Minnesota, Nebraska, DC and New Jersey, more to follow."

[AngryScientist]

interesting!

i noticed that this morning when i bought something small also, but didnt know what to make of it.

damnit.

[cribbit]

Somehow California hasn't done this yet. Though with most retailers already operating in state it's largely a moot point.

I remember when it was a big deal that Amazon finally opened offices in California. They only did so because it was determined more economical to have CA sales tax, CA warehouses and avoid a costly fight with CA's legislature. Until then all their CA "offices" were wholly owned subsidiaries of Amazon.

[dem]

This is a result of the "Wayfair" Supreme court case that allowed states to collect tax on Marketplace transactions.

You can see your state's status here, the "Marketplace Nexus" is the relevant one for eBay:
https://www.salestaxinstitute.com/resources/remote-seller-nexus-chart

California appears to start in October.

[vincenz]

Wow it’s really one of the few reasons I use eBay these days, to avoid charges for tax and shipping that other retailers charge. I’d skip buying on eBay if this weren’t true anymore.

[duff_duffy]

Thanks for the heads up on this! I did not know this and definitely will impact buying higher ticket items.

[AngryScientist]

The more i think about this the more it irritates me.

it seems like it would have been a little fairer to apply this to ebay vendors, power sellers or whatever, but to have to pay sales tax on used items bought directly from individual sellers - sucks.

[NYCfixie]

The more i think about this the more it irritates me.

it seems like it would have been a little fairer to apply this to ebay vendors, power sellers or whatever, but to have to pay sales tax on used items bought directly from individual sellers - sucks.

I am sure eBay/Paypal wanted to "protect" all sellers from having to deal with collecting, processing, and paying to all states sales tax so they are doing it themselves.

I do think this will hurt eBay, again, by having more people back out and not use the service anymore. I will personally not bother with eBay in the future because once you add tax to "pre-owned" items and shipping it is often not worth it and one might as well purchase new in many cases. Unless it is something unique and/or difficult to find, it may not be worth it anymore.

Also, does this push many on the "sell side" back to craigslist and local?
(with its own problems of dealing with people that ask 100 questions and then just disappear before actually buying anything)

[madsciencenow]

The more i think about this the more it irritates me.

it seems like it would have been a little fairer to apply this to ebay vendors, power sellers or whatever, but to have to pay sales tax on used items bought directly from individual sellers - sucks.

You make a good point and this seems to be how the state of IL is handling this (see below). What I don't like about this is it seems difficult to enforce and as an IL resident we need all the help reducing taxes we can get. In addition, it makes me wonder what the PayPal and Ebay User Agreements say about their respective rights when it comes to data sharing. Given that it comes to complying with law they probably have very broad rights.

Pursuant to the enactment of Illinois Public Act 100-587 and the subsequent U.S. Supreme Court decision in South Dakota v. Wayfair, Inc, remote (out-of-state) sellers with either cumulative gross receipts from Illinois sales of $100,000 or more, or 200 or more separate Illinois transactions, are required to register to collect and remit Illinois Use Tax for sales of tangible personal property made on or after October 1, 2018.

Remote sellers seeking to determine whether they must begin collecting and remitting Illinois sales tax beginning October 1, 2018, should review the resources below to better understand how the changes in Illinois law and filing requirements apply.

[Hilltopperny]

All online retailers are now charging NYS tax as well. It's not just eBay, but at least online retailers are selling new goods. It's definitely curbed my buying anything at all from eBay and other online retailers.

I already pay taxes on four properties, sales tax and deposit on most items and a pretty high fuel price. All while the area around me deteriorates and the NYS legislators and Governer gave themselves a 50k pay hike annually to be given over the next couple of years... Complete madness!

My daughter's school is asking for a 35% tax increase this year and 15% next year and are using fear tactics to try and get votes. Upstate is a beautiful area, but it feels like the middle class is being pushed out by lack of well paying jobs and a per capita tax rate that is higher than anywhere else in the country. I totally understand the mass Exodus from Upstate NY...

Sorry for the rant!

Sent from my moto g(6) play using Tapatalk

[HenryA]

Your recourse is through your state legislature. Taxing used goods seems absolutely ridculous, but if your state laws say so, it is so.

[Kobe]

Pennsylvania and probably most states do this on cars. A car that originally sold for $30,000 can be resold 4 or 5 times over it's lifetime. Each time the state collecting 6% on the transaction. Which effectively is a 20-25% sales tax. It doesn't seem fair to me to be collecting it at all on used items.

[onitsuka_luv]

i just had this conversation IRL the other day, it's happening all over the web. in PA they ask you to tell them how much you have spent on "out of state purchases" and pretty obviously nobody actually does

[ultraman6970]

Isnt easier just collect the tax from the seller at the end of the transaction as is done all over the place like a normal store does???

A lot less complicated to track 1 million stores than 3 billion buyers IMO.

[Mark McM]

The more i think about this the more it irritates me.

it seems like it would have been a little fairer to apply this to ebay vendors, power sellers or whatever, but to have to pay sales tax on used items bought directly from individual sellers - sucks.

These taxes have always been required by law. And they are owed by the buyer, not the seller (regardless of who the seller is, or whether the product is used). The recent change is that now more sellers are being required to collect it for the states - but the buyer has always been required by law to pay it to the states. If you hadn't been paying it before, you've been a tax dodger.

[PaMtbRider]

If money changes hands the government wants a piece of it. Always been this way, just never enforced.

[Mark McM]

Pennsylvania and probably most states do this on cars. A car that originally sold for $30,000 can be resold 4 or 5 times over it's lifetime. Each time the state collecting 6% on the transaction. Which effectively is a 20-25% sales tax. It doesn't seem fair to me to be collecting it at all on used items.

Well, multiple taxing is pretty common. A car buyer probably already paid income tax on the money they used to buy the car, and his employer probably already paid other employment taxes just to employ this person. So by the time the sales tax is paid on the car, the same money has been taxed 2 or 3 times.

However, only end users are required to pay sales taxes (which is why they are sometimes called "use" taxes). A re-seller does not pay sales taxes. So when retailers buy inventory from wholesalers, and wholesalers buy goods from manufacturers, no sales taxes are paid. Only when it is sold to the end user are sales taxes paid.

[cmbicycles]

...


However, only end users are required to pay sales taxes (which is why they are sometimes called "use" taxes). A re-seller does not pay sales taxes...



Since we on the forum seem to always resell bike parts we purchase, whether used or new, and we rarely are the last (end) user of said bike parts, we should all be considered resellers and therefore exempt from sales tax. ;)

[jlwdm]

..

However, only end users are required to pay sales taxes (which is why they are sometimes called "use" taxes). A re-seller does not pay sales taxes. So when retailers buy inventory from wholesalers, and wholesalers buy goods from manufacturers, no sales taxes are paid. Only when it is sold to the end user are sales taxes paid.

Actually a use tax kicks in when you buy a product from out of state and do not pay a sales tax. In states with sales taxes there are also use taxes. So if I buy an item online and no tax is charged I am required to pay my state a use tax.

Jeff