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Sun May 19 2019 21:10:38

eBay Opposed Sales Tax Legislation with $5 Million Threshold

By: Ina Steiner

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Fifteen years ago, eBay opposed legislation in Congress that would have exempted businesses with less than $5 million in remote sales from having to collect sales tax on behalf of states that were part of the Streamlined Sales Tax Project (SSTP).

As we wrote in 2004, at the time eBay was concerned that the plan contained no guarantees for small business exemptions and would impose an enormous burden on them if they were required to file taxes across 50 states plus DC. 

Fast forward to the June 21, 2018, and the Supreme Court decision in South Dakota v. Wayfair, Inc. okayed economic nexus at levels as low as South Dakota's law, which defines nexus as annual sales of $100,000 or 200 separate transactions (it's really up to Congress to write the rules, not the Supreme Court, but it hasn't).

While eBay and small sellers had a good run until last year's Wayfair decision, that $5 million threshold is looking pretty good right now to many sellers - as does a streamlined process for collecting and remitting sales tax, which varies state by state.

In many industries, doing $5 million in remote sales would be considered small, but that's not the case for many online and marketplace sellers. (Feel free to weigh in below.)

Marketplaces are not giving up on Congressional intervention. As we wrote in Sunday's Newsflash article, Etsy sent sellers from all over the country to Washington DC recently to advocate on behalf of small businesses, and included on the agenda was online sales tax. eBay also held its annual advocacy day recently with a focus on trade policies and postal issues.

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Perminate Link for eBay Opposed Sales Tax Legislation with $5 Million Threshold   eBay Opposed Sales Tax Legislation with $5 Million Threshold

by: BlueHoundAuctions This user has validated their user name.
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Mon May 20 09:21:29 2019

Here's the deal.  With Wayfair decision last June - the entirety of the problem is unraveling in front of our eyes.

Now if you sell 200 items in your state, they require you to collect sales tax.   If you sell in another town and it goes to the town next to you - they want that town wants that sales tax money - overnight we went from 9,600 sales tax jurisdictions to estimated 34,000.  Tax software can't keep up.

WIth wayfair, I tax everything, cut the check to the NCDOR, and if someone complains, I send them to the NCDOR to get their money back.  That is not an issue I want to or have time to deal with.

If you are an online seller, this site definitely tells you what has been going on.

https://www.auctiontax.com/

Perminate Link for eBay Opposed Sales Tax Legislation with $5 Million Threshold   eBay Opposed Sales Tax Legislation with $5 Million Threshold

This user has validated their user name. by: Ina

Mon May 20 10:38:19 2019

You have always been required to collect sales tax in your own state. Wayfair opened the door to letting *other* states require you to collect *their* sales tax even if you don't have a location there.

Perminate Link for eBay Opposed Sales Tax Legislation with $5 Million Threshold   eBay Opposed Sales Tax Legislation with $5 Million Threshold

by: booklover27 This user has validated their user name.

Mon May 20 11:12:17 2019

Another example of Ebay's failed decision making process...

Perminate Link for eBay Opposed Sales Tax Legislation with $5 Million Threshold   eBay Opposed Sales Tax Legislation with $5 Million Threshold

by: Mamak This user has validated their user name.

Mon May 20 11:20:52 2019

Last week I called the office of my congressional rep to discuss the double whammy I am getting in my area.  I live in an unincorporated area that shares the same zip code as a city who just raised their sales tax to 1.5% above what my address should be charging.  As a buyer we are randomly and incorrectly being charged the extra 1.5% on ecommerce purchases and as a seller I am wondering when eBay begins charging my out of state customers what will they be charging them,  the city rate or the county rate assigned to the address?  The response to my question was that they only deal with federal legislative issues and that the state will have to deal with sales tax issues.  I doubt that they will be dealing with any of this in congress since they don't think it is their job to do so.  I also contacted the state rep and he has not responded at all.  The Department of fees and Taxes told me that it is illegal to overcharge sales taxes and if audited Amazon would be in trouble, but they gave no solution to the problem nor do they plan to address it.  Why would they as it brings in more revenue than they are entitled.  It's a very messy can of worms that nobody wants to be fully responsible for they just want to get their money.  

Perminate Link for eBay Opposed Sales Tax Legislation with $5 Million Threshold   eBay Opposed Sales Tax Legislation with $5 Million Threshold

by: Ebay Little Shop of Horrors This user has validated their user name.

Mon May 20 12:23:38 2019

Poshmark collects the sales tax from the buyer, with the shipping, at the time of purchase. Why can't ebay, wayfair and amazon do the same?

Perminate Link for eBay Opposed Sales Tax Legislation with $5 Million Threshold   eBay Opposed Sales Tax Legislation with $5 Million Threshold

by: comments This user has validated their user name.

Mon May 20 13:11:49 2019

I would be thrilled to have a $5 million dollar threshold. Unfortunately with the states somehow declaring the marketplace as the merchant of record to circumvent their own requirements, then it matters not even if there is a 100 million threshold. Hopefully all the pissed off constituents get their pound of flesh at the voting booth.

Perminate Link for eBay Opposed Sales Tax Legislation with $5 Million Threshold   eBay Opposed Sales Tax Legislation with $5 Million Threshold

by: Whatever This user has validated their user name.

Mon May 20 19:55:52 2019

fustercluck

Perminate Link for eBay Opposed Sales Tax Legislation with $5 Million Threshold   eBay Opposed Sales Tax Legislation with $5 Million Threshold

by: mcposty This user has validated their user name.

Mon May 20 20:20:32 2019

Boycott the supreme court on this issue. No business shpuld have to collect tsx gor all states. Brick and morysrs dont need to do this.

Boycott and fight or lose everything.

Perminate Link for eBay Opposed Sales Tax Legislation with $5 Million Threshold   eBay Opposed Sales Tax Legislation with $5 Million Threshold

by: purpleiris This user has validated their user name.
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Tue May 21 00:27:41 2019

As I said in a response to another article, sales tax on interstate needs to be uniform and regulated, collected and distributed by a single agency. Of course, there's still the whole issue of it even being Constitutional. They can make it legal in their statutes, but that doesn't mean those statutes are Constitutional.

Perminate Link for eBay Opposed Sales Tax Legislation with $5 Million Threshold   eBay Opposed Sales Tax Legislation with $5 Million Threshold

by: purpleiris This user has validated their user name.
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Tue May 21 00:36:25 2019

Please ignore my previous post. I keep hitting 'Post Comment' instead of 'Preview Comment'. LOL

As I said in a response to another article, sales tax on interstate ecommerce needs to be uniform and regulated, collected and distributed by a single agency. Of course, there's still the whole issue of it even being Constitutional. They can make it legal in their statutes, but that doesn't mean those statutes are Constitutional.

In response to MamaK, the issue you're having locally is a state matter, not a federal one. eBay is fighting the national problem that is being handled by the federal branches of government. eBay has absolutely no power to do anything in your particular case because that's something you need to take up with your state. Furthermore, they are fighting for millions of sellers against an issue they all face, not just one seller with an individual problem. I suggest contacting your State Attorney General as they are the legal representation for their state's residents.

Perminate Link for eBay Opposed Sales Tax Legislation with $5 Million Threshold   eBay Opposed Sales Tax Legislation with $5 Million Threshold

by: purpleiris This user has validated their user name.

Tue May 21 00:43:31 2019

@MamaK, please don't be offended by what I said above. I was simply trying to point you in the right direction. =) To add to my suggestion, you should go to your SAG's website to see what is required for you to file a complaint. Each one is different, so I cannot go beyond suggesting what I already have.

Perminate Link for eBay Opposed Sales Tax Legislation with $5 Million Threshold   eBay Opposed Sales Tax Legislation with $5 Million Threshold

by: railady This user has validated their user name.

Thu May 23 14:27:47 2019

In response to Mamak and purpleiris - I would not lose too much sleep over this, and yes, it is a ''federal'' issue because Wayfair is requiring sellers to collect all the sales tax (state and local) due on purchases - and yes, it's an unbelievable mess because it is not uniform from state to state, and as Mamak pointed out (and I've sent in examples from NY, my state) there are jurisdictions within jurisdictions within jurisdictions and the huge corporations like eBay and Amazon are struggling with unworkable software to try to figure it out.

On top of that are items that are EXEMPT from sales tax, for which customers are not supposed to be charged sales tax, but ARE. What's included is constantly changing !  I already wrote about Amazon trying to charge me sales tax on an item that is EXEMPT from sales tax in NY.

What MIGHT have made more sense, at least in the beginning, would have been to charge only STATE sales tax (a flat amount per state), leaving the local tax collection until the system had been worked out, but NO, greedy greedy, they had to try to go for the whole hog.

@Mamak, YOU keep doing what YOU need to do to be collecting and remitting taxes legally for your business. I would not bother following up, even with a complaint. Let eBay and Amazon figure it out on their own, that is their job.  If they are collecting sales taxes for you, any mistakes they make are THEIR problem - just be sure to keep spotless, pristine records of all of your sales, and WHO paid the sales taxes on them !! If you get audited, your defense is your record that YOU were not allowed to, and did not collect/remit that tax!! The marketplace you used, took over and did it for you and it was out of your control.  

Perminate Link for eBay Opposed Sales Tax Legislation with $5 Million Threshold   eBay Opposed Sales Tax Legislation with $5 Million Threshold

by: railady This user has validated their user name.

Thu May 23 14:44:26 2019

@Mamak - I re-read your post and you said ''when eBay begins charging my out of state customers what will they be charging them,  the city rate or the county rate assigned to the address'' - if you are the SELLER, eBay will charge your customers the tax on where THEY live, not where you are located.

Sales tax is based on the recipient's destination, not the seller's.  

On the other hand, if you BUY you must be encountering a problem.  Indeed, it is a state issue (your Congressman will have an EXCUSE to know nothing about that), and since your state rep isn't helpful, you might try the state department of revenue or tax/finances.  

THAT SAID - your dilemma sharing the same Zip code with another taxing jurisdiction that is 1.5% (!!!) higher than yours, is one of the clearest and strongest examples of why there will be mistakes!  


Good luck ...................



Perminate Link for eBay Opposed Sales Tax Legislation with $5 Million Threshold   eBay Opposed Sales Tax Legislation with $5 Million Threshold

by: railady This user has validated their user name.

Thu May 23 14:45:48 2019

Sorry, I meant

Sales tax is based on the recipient's LOCATION, not the seller's.



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