Tax on Ebay

TATE

AzB Gold Mensch
Silver Member
I'm in California and I put a couple of old Palmer cues up on ebay. They sold quickly to a buyer on the East coast.

Ebay charged sales tax to the buyer. When did that start? I don't think that's happened to me before.
 

PoolBum

Ace in the side.
Silver Member
I'm in California and I put a couple of old Palmer cues up on ebay. They sold quickly to a buyer on the East coast.

Ebay charged sales tax to the buyer. When did that start? I don't think that's happened to me before.

It started at the beginning of 2019. Caught me by surprise when it started as well.
 

ideologist

I don't never exaggerate
Silver Member
Thank the Supreme Court for saying that online transactions can get the buyers hit with sales tax. eBay has to collect it.
 

TATE

AzB Gold Mensch
Silver Member
Thank the Supreme Court for saying that online transactions can get the buyers hit with sales tax. eBay has to collect it.

It sucks for used items. I guess I have't been paying attention to the news.
 

TATE

AzB Gold Mensch
Silver Member
You go into any store, you pay sales tax. Why should you be free of sales tax on online sales?

Just because they hadn't been charging for the 15 years I've been selling and these are out of state sales (unlike a store). There are other avenues of selling, for example Facebook, Craigslist, AZ Billiards where collecting and reporting tax on used cues is unlikely. It puts ebay at a competitive disadvantage to other venues.
 
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HNTFSH

Birds, Bass & Bottoms
Silver Member
Just because they hadn't been charging for the 15 years I've been selling and these are out of state sales (unlike a store). There are other avenues of selling, for example Facebook, Craigslist, AZ Billiards where collecting and reporting tax on used cues is unlikely. It puts ebay at a competitive disadvantage to other venues.

Always wonder how many people report sales tax (online purchasing) responsibilities on their Federal Tax Return.
 

Bavafongoul

AzB Silver Member
Silver Member
Approximately 3 years ago state auditors and tax authorities contacted eBay about collecting sales taxes.
eBay cooperates and as states demanded tax be collected, eBay complied and automatically now applies
sales tax to taxable transactions using sales tax provided by individual state tax authorities to eBay to use.
 

TATE

AzB Gold Mensch
Silver Member
Always wonder how many people report sales tax (online purchasing) responsibilities on their Federal Tax Return.

I didn't know they had the provision to do so on any Federal return. They do have it on our CA State return,. In California we have "use tax" where you're supposed to report untaxed online purchasesmade out of state and pay the taxes.

I do my business returns and signed up many years ago for use tax returns. I reported a couple of transactions, paid a few bucks in taxes. Then the suppliers started collecting sales taxes instead. Even though I had nothing to report I was still get hounded to file a use tax return, so I just did it - it was zero the last 10 years or so but it's easier just to click and file a zero return. Finally I found the boxes on the state return and just do it that way.

I would say that use taxes and state sales tax are the most misunderstood and commonly overloooked tax. Like you said, how many billions of dollars change hands on Craigslist and other classifieds that go unreported. Probably 99.999% (or more LOL).
 

kkdanamatt

AzB Gold Member
Gold Member
Silver Member
Approximately 3 years ago state auditors and tax authorities contacted eBay about collecting sales taxes.
eBay cooperates and as states demanded tax be collected, eBay complied and automatically now applies
sales tax to taxable transactions using sales tax provided by individual state tax authorities to eBay to use.

Wake Up!
You, the seller, are being charged eBay's Final Value Fee on the Sales Tax that your buyer pays.
PayPal also collects their fee based on the total sale, including the sales tax.
After the fees are charged to you, the seller, then eBay passe on the sales tax to the state in which the buyer resides.
So here's an example:
You sell a cue on eBay for $100, plus $10 shipping, to a buyer in NJ.
The NJ sales tax is $7.29. (6.625%)
Total received= $117.29.
eBay takes out their 10% commission $11.73 + 7.29 sales tax.
PayPal takes out their 2.9% +$.30 commission, a total of $3.70.
So, here's what you wind up getting, net: $100 + $10 + $7.29 - $11.73 - $7.29 - $3.70 - $10 for your shipping cost.......$84.57.
In other words, figure that your sales on eBay will cost you about 15%, if the buyer pays the accurate shipping cost.
The higher the shipping cost, the more money eBay and PayPal get because their commissions include shipping and tax.
 

ceebee

AzB Silver Member
Silver Member
Ebay & Tax Charges

Just had that happen to me. Kinda surprised me, if I have too many of them, I;ll have to file taxes... I'm too old for that. Every time I turn around, ebay is doing more & more to put themselves out of business.
 

7stud

AzB Silver Member
Silver Member
I didn't know they had the provision to do so on any Federal return.
There is no such provision--because there is no such thing as a "federal" sales tax. Sales tax is a state tax, which is collected by the individual states.

Online sales were never exempt from sales tax--contrary to what many ignorant people think. Quite the contrary, all states with a sales tax have a line on your income tax return that requires you to report "Use Tax", which is the sales tax you are required to pay for things you purchased but did not pay a sales tax. Originally, online sellers were not required to collect sales tax on their sales. That gave online sellers a competitive advantage over brick and mortar retailers--because buyers largely failed to pay their Use Tax on their state income tax forms.

Now, if an online seller has enough sales in a given state, they must collect the sales tax.
 
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Bob Jewett

AZB Osmium Member
Staff member
Gold Member
Silver Member
... Quite the contrary, all states with a sales tax have a line on your income tax return that requires you to report "Use Tax", which is the sales tax you are required to pay for things you purchased but did not pay a sales tax. ...
I was startled when California asked me to pay tax on some used books I had bought from Europe. Evidently California talks to the customs people. I had no idea I was liable for state sales tax on that.
 
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