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eBay to Collect Sales Tax for 4 More States in the New Year

eBay to Collect Sales Tax for 4 More States in the New Year

eBay will begin collecting sales tax for four additional states: Hawaii, Illinois, Wisconsin, and Michigan. eBay said, “Regardless of your physical location, if you sell to buyers in certain states, those states may require you to collect applicable taxes on transactions. “

Based on new laws in the four states, it will calculate, collect, and remit sales tax for applicable orders shipped to customers in those states starting January 1, 2020.

However, eBay failed to point out that sellers will be paying the payment-processing fees for the sales tax portion of those transactions despite the fact it’s eBay’s responsibility to collect the tax.

eBay told sellers, “Once we start collecting tax in these states, you do not need to take any action. There are no extra charges or fees for this service. Prior to these dates, please continue to collect and remit tax in these states and comply with any other applicable requirements they impose.”

It added that there were “no opt-outs for selling items to the states listed above, or out of eBay automatically collecting sales tax for applicable orders,” and it said it would likely add additional states to the list.

“For more information on these new tax requirements, we recommend consulting with your tax advisor,” eBay said, and it pointed to its help pages for more information.

You can find Monday’s announcement on the eBay Announcement Board.

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Ina Steiner
Ina Steiner
Ina Steiner is co-founder and Editor of EcommerceBytes and has been reporting on ecommerce since 1999. She's a widely cited authority on marketplace selling and is author of "Turn eBay Data Into Dollars" (McGraw-Hill 2006). Her blog was featured in the book, "Blogging Heroes" (Wiley 2008). Follow her on Twitter at @ecommercebytes and send news tips to ina@ecommercebytes.com. See disclosure at EcommerceBytes.com/disclosure/.

4 thoughts on “eBay to Collect Sales Tax for 4 More States in the New Year”

    1. It’s not sales tax, it’s use tax. I got hit with the same thing when buying from a foreign country.

  1. I paid taxes on a purchase from Malaysia. Everyone’s in on the act.

    It’s usually grouped like this: “Sales and Use Tax”, so either term could be applicable, Sales Tax or Use Tax. Some people escape the state Sales Tax by crossing into a Non Sales Tax state to make a major purchase. When you bring the item back, you are subject to the Use tax in your state. It’s just a big catch-all. Probably works the same for countries, although the term I see most of the time is VAT, Value Added Tax. No clue how they define that, but I’m sure someone got creative.

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