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#1
10-19-2019, 01:49 PM
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eBay sales tax issues
As many of you are aware, the wayfair case introduced new nexus concepts that states have almost all adapted to in order to collect sales tax on internet sales (in many cases this will expand as states and localities apply this for other taxes as well). eBay collects sales tax on behalf of sellers...
In PA, clothes are exempted from sales tax, but eBay is still collecting, and I assume remitting, sales tax on these exempt purchases. Since it’s been happening for nearly a year, I’d assume they’re aware of the issue. Has anyone else noticed eBay inappropriately charging sales tax when it doesn’t apply? Also wondering if they have any liability (though consumers can file for a refund with the DOR in PA) for their erroneous collections. 
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#4
10-19-2019, 04:23 PM
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This is what I found for Ohio
https://www.tax.ohio.gov/taxeducatio...our_stuff.aspx Selling Your Stuff: Do you have some things you would like to sell for some extra cash? There are many ways to sell your personal items these days; whether it’s through an internet sale, an advertisement in the paper, or a yard sale, they are all considered to be the same type of transaction: a casual sale. Casual sales are not taxable transactions, as sales tax was paid on these items the first time they were purchased. For example, if you decide to sell your old mp3 player on an online auction/shopping website then you would not need to charge the buyer any sales tax. In this example, you are selling a personal item that you originally purchased for your personal use, therefore you are not required to charge sales tax. This would also be the case if you were selling the mp3 to a friend, at a yard sale, etc. On the other hand, if you purchase an mp3 player at a very low price with plans of reselling it to try and make some extra money, you would need to charge sales tax. In this case, the item was not purchased for your personal use. There's really no way for eBay to know if you're flipping or selling personal items.
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#5
10-19-2019, 04:44 PM
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MA is the same for "casual sales" in that no sales tax should be charged or collected:
https://www.mass.gov/regulations/830...isolated-sales eBay has no way (or desire) to figure out if it should (or should not) charge sales tax on items you list as a seller. As mentioned in other eBay related threads on this forum, eBay could care less about the individual seller as most of their income now comes from professional and commercial sellers. As such, they collect tax on all sales to keep in the good graces of the states knowing they may need to use that Good Karma some day with state/political officials if any laws are passed that might actually affect eBay's profits. So, the states and eBay are basically saying bend over and take it where the sun don't shine to the individual seller making a "casual sale". Do you see anyone going after craig's list? No, because the tax revenue is not worth it for the states. Most of them are in-person cash-based "casual sales" which cannot be tracked as easily and would not result in tax revenue aanyway. Last edited by NYCfixie; 10-19-2019 at 04:47 PM.
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#6
10-19-2019, 08:26 PM
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Your CL argument isn’t apples - apples because there are no fees, typically there are local sales, and CL has no role in facilitating a purchase. Many states certainly do have folks that go out and collect at flea markets. If CL was facilitating purchases, states would be sending them notices. When you do business in a state, and wayfair extended nexus, you’re on the hook for their laws. Last edited by Aaron O; 10-19-2019 at 08:31 PM.
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#8
10-19-2019, 09:07 PM
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#9
10-19-2019, 09:25 PM
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__________________
Instagram - DannAdore Bicycles
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#10
10-20-2019, 08:51 AM
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Therein lies the problem, if one lowers their selling price to make the listing more attractive knowing eBay collects sales tax, you get less on the sale so once again eBay now favors commercial sellers.
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#11
10-20-2019, 09:08 AM
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if they collect sales tax from everyone, it's not really an advantage to commercial sellers. I don't see any reason to report them to anyone, the state gets sales tax revenue, not ebay, so there is no tax fraud. I think ebay looks at private sellers as just being a pita and would rather become alibaba for the U.S. I know they have discouraged me from selling much.
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#12
10-20-2019, 09:20 AM
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Interesting topic about "casual sales" . I just read NJ law on this and says:
"The Sales and Use Tax Act allows a casual sale exemption under N.J.S.A. 54:32B-2(u). The Sales and Use Tax Act defines a casual sale as one which is "... an isolated or occasional sale of an item of tangible personal property... by a person who is not regularly engaged in the business of making retail sales of such property… where the item of tangible personal property… was obtained by the person making the sale, through purchase or otherwise, for his or her own use.”
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#13
10-20-2019, 09:31 AM
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Disagree with the sales tax arguments as part of price...
There’re applied after the bidding/buy now price. Everyone understands how sales tax works (and it’s invoiced as a separate line item). I doubt that many people are subtracting sales tax from what they’re willing to pay, and the eBay market is rarely competing with garage sales avoiding sales tax anyway. People can, and have, challenge sales tax as a regressive form of taxation, but if bricks and mortars are abiding by it, not applying it to online sales is privilege and anti-competitive. What is interesting is that the wayfair nexus standards have an element of scope...a fixed number of sales, or a price threshold. If an eBay seller is under that threshold, and were selling on their own, they’d have no obligation to collect sales tax. Logistically, it would be a nightmare for eBay to make that determination, but it is interesting that not all sellers are required to collect sales tax. How eBay fits in as a facilitator under those nexus standards, I have no idea. I’m not a SME, but I’d think that if eBay is collecting exempt sales tax, knowingly (and it has been going on long enough that they know), they’re liable to the buyers for what they incorrectly collected. I’d also love to see if it was actually remitted. I have an attorney friend who heads up sales tax for a firm - I’m going to ask him. I think a clever lawyer could collect a pay day on class action fees. Last edited by Aaron O; 11-01-2019 at 02:01 PM.
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#14
10-20-2019, 12:55 PM
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I feel like ebay could have a check box saying that it is a casual sale, one time, of an item purchased at retail. Granted, they would have to know if the seller's state had casual sales exemption. Some states will let you sell without tax in certain circumstances, but not at others. For example, at a consignment shop.
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#15
10-20-2019, 03:00 PM
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I was thinking a few weeks ago in what the op is asking about. Some states charge taxes, other ones dont... ebay or paypal have no idea if you are selling use (they have the check mark at the time of listing the product tho) and other details which make them in short to just charge everybody evenly.
Yes they can be reported to the IRS because at the time to pay or send that money to PA as the OP says, PA will return that money to them but is sure ebay/paypal wont reinburse the money back to you at all. Maybe for 1 seller is like 10 cents but doubt PA has only 1 seller, they might have millions of them and maybe 10 of millions if we add other states that have the same tax regulations, which IMO is fraud at the ebay side. Will be interesting if some .ORG is willing to fight this one for US for free.
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