ebay & tax

Zman

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Looks like I won't be making any more expensive purchases on ebay. Last night I bought a used lens at what I thought was a fair price, and at checkout was shocked to see a significant 8.8% NYS sales tax charge added. After decades of ebay buying this was a first. Checking around their website I found the info that they are now collecting NYS sales tax beginning June 2019. Never received a word of this from ebay in my messages area. I don't mind paying tax if a business has brick & mortar stores in my state, but feel this is just another NYS money grab. The lens wasn't from an ebay store seller, just a photographer looking to sell some of his equipment. Unfortunately for me and the seller, I cancelled the purchase because the value no longer was there.
 

Bidkev

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Yup. Similar negative vibes re ebay here. They are now charging 10% on all overseas sales which is a rule imposed upon them by the Aus Gov't to give Australian retail a more level playing field. That can't be helped I guess but they are also now deducting a 10% goods and services tax on ALL sales, even though the seller may be a private individual. They again say that it is a law imposed upon them by the government although I can't see that being the case as Gumtree, which is also owned by Ebay, doesn't collect the GST
 

tkbslc

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Yeah...Pretty much the end of my ebay purchasing.
It's going to be a problem for those of us that sell there, too. I don't run a business or anything, but I sell a lot of my stuff there. Probably $2000+ per year. Anything from the kids old video games to upgraded computer parts to cameras and lenses. It's going to definitely take a cut out of the profit potential.

I have a relative who runs a side business selling used motor parts on ebay, and I'd imagine this is going to pretty much kill his margin.
 
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exakta

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Especially for used items, I would never owe tax on a personal sale or purchase outside of ebay.
Better read the fine print in your location's tax codes. Most US states charge sales tax on used cars, even private sales...the buyer, not the seller, pays this when registering the vehicle. In Massachusetts tax for non-vehicle sales it comes down to whether you are considered a "vendor" or not. In this case, using eBay to sell stuff might qualify you as a vendor. If you have an eBay Store, you're going to have a hard time explaining why you are not really a vendor/business.

Private sales can even trigger income tax liabilities. I started getting 1099s from Paypal two years ago...if I sent a request for money to a buyer, Paypal was reporting it as income to the IRS. If I simply ask the buyer via email to send me money using Paypal so that they initiate the transaction, it's not reported as income. I can't imagine what sort of paperwork I would have to provide the IRS to show my true income (usually a loss) when being audited after using Paypal for photo gear sales.
 

davidzvi

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Yes in many states when you buy something on line you are suppose to report it and pay the sales tax, it's been that way for years (decades, longer?). But most people don't. And because of that.....

wiki/South_Dakota_v._Wayfair,_Inc.

Companies are now being required, nationally in the US, to collect the taxes. But it should be the ship to address.
 

Wisertime

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It's about time for a tea party. Should not be taxes on used items. Period. That said I only rarely get charged sales tax (PA) on ebay and the state knows where they can stick their use tax. I'll toss them $1 every so often. Olympus store is in PA, so they charge me sales tax too.
 

tkbslc

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Yes in many states when you buy something on line you are suppose to report it and pay the sales tax, it's been that way for years (decades, longer?). But most people don't. .
You don't normally owe use tax on private sale and purchase of used items and even new items below a certain threshold (vehicles excluded). I mean you wouldn't be expected to report items you bought at a yard sale or on craigslist.

There's a case to be made for tax when buying from a retailer via ebay, but it seems like ebay could easily flag for that.

We really do make it confusing with 50 different state tax laws in this country. Should just have a national VAT and one set of laws like the rest of the world.
 

PakkyT

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Companies are now being required, nationally in the US, to collect the taxes.
To nitpick, I believe the rules only made it so states can, if they so choose to, require retailers selling to their residents to collect sales tax. It did not make it so all companies now must collect sales taxes for all state going forward. Or put another way, the ruling did not immediately change anything other than giving states authorization to require online retailer to charge their residents sale tax.
 

davidzvi

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You don't normally owe use tax on private sale and purchase of used items and even new items below a certain threshold (vehicles excluded). I mean you wouldn't be expected to report items you bought at a yard sale or on craigslist.

There's a case to be made for tax when buying from a retailer via ebay, but it seems like ebay could easily flag for that.

We really do make it confusing with 50 different state tax laws in this country. Should just have a national VAT and one set of laws like the rest of the world.
100% agree, but where is the line and how to you stop abuse of "I'm not a business"? Without getting into political or legal areas, it's a hard line to walk and it will probably take a while to shake out.

To nitpick, I believe the rules only made it so states can, if they so choose to, require retailers selling to their residents to collect sales tax. It did not make it so all companies now must collect sales taxes for all state going forward. Or put another way, the ruling did not immediately change anything other than giving states authorization to require online retailer to charge their residents sale tax.
True, I was generalizing. But I work with accounting SW so I figured a straight simplification was better than trying to get too far into the weeds.
 

jdcope

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It's about time for a tea party. Should not be taxes on used items. Period. That said I only rarely get charged sales tax (PA) on ebay and the state knows where they can stick their use tax. I'll toss them $1 every so often. Olympus store is in PA, so they charge me sales tax too.
Or move to a state like Oregon with no sales tax. :)
 
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Thanks for the heads up. I noticed years ago that some stores with a brick and mortar presence in my state of CA offer sales tax but so far no sales tax when purchasing from the little guys in the same state. It will definitely change my buying strategy if this gets rolled out on a wide scale.
 
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fleaBay, B&H, NewEgg pretty much every tax free site now charges tax in WA state address delivery. Even ridiculous, AliExpress/Alibaba charges tax in WA too for slower than molasses shipping.
My replacement for first 3 websites is now Adorama who are yet to start charging tax in WA and instead of AliExpress I go to Gumptrade (much faster shipping and lowest prices anyway).

Edit: Amazon has suddenly become my go to site now for photo equipment considering you end up paying same but get incredible customer support and super fast shipping.
 

Biro

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Just so everyone is clear on the law, the U.S. Supreme Court ruled about a year ago that states are within their authority to demand sales taxes on Internet sales. This is why you're seeing this now -- it's not eBay's call.

Supreme Court rules in internet sales tax case: States can charge online shoppers

The states want it because they're losing tens - if not hundreds - of millions of dollars a year. That, in turn, is because brick-and-mortar retail is in free fall (like many parts of our economy) as most Americans have made a wholesale switch to the Web.

If it makes you feel better, many of those brick-and-mortar stores are now suddenly competitive again - meaning they might actually be around for those who want and/or need them.

But for truly small businesses or private sales, yes, it's a bit of a mess.
 
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If you complete an exemption form and send it to evilBay, they will deduct the sales tax. But they may report you to your state, and you may have to prove that you qualify for the exemption.

In general, purchases are exempt from state sales tax for farm use, re-sale, non-profit, educational, or numerous other reasons that are different in each state. If you are exempt in your state when making a brick-and-mortar purchase, you should be exempt via evilBay, as well.

In short, if you have a business, you probably have grounds for filing the form with evilBay.

Each state has their own customized version of the general form linked above. It may be worth filing the proper form for your state, since it may mention other special cases that may qualify you for the exemption.
 
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