Here is yet another example of government misdirection to create laws for improving state sales tax collections - link to article
Among the proposals he has introduced to create a 2017 New York State budget, Governor Andrew Cuomo has included provisions to require Amazon and other online "marketplaces" (eBay and Etsy were specifically mentioned in the linked article) to collect and remit state sales tax on payments made by purchasers who buy from sellers using the venues.
New York is looking at this as one way to collect sales tax they believe online sellers living in New York state are not remitting. Instead of targeting the individual sellers, they are attempting to target the venues that host member-sellers' accounts.
What is most upsetting is that this is one of numerous "hidden" proposals slipped into huge catch-all bills the Governor will send to the Legislature for approval. Citizens may not realize such a misguided provision is in there! If you do not live in New York, you may want to check out what is happening in your own state. With California and New York seemingly the leaders, new laws often are Monkey See, Monkey Do.
Unfortunately, if I read the news story correctly, there is little or no understanding of how online "marketplaces" actually work. Amazon is indeed a target on which to focus, because someone who buys from Amazon sends payment directly to Amazon. Amazon even has their own type of payment, and, further, operates "fulfillment centers" where many items are kept. Other items come directly from individual sellers who provide them. But the payment goes to Amazon, which sends funds for the payment to the account of the seller with whom they have contracted to provide the items (at least I think this is how it works - I do not sell on Amazon).
On the other hand, eBay and most other online "marketplaces" - Etsy, Bonanza, Ruby Lane, TIAS, etc. etc. - operate completely differently. They are only the "venue" that provides a platform for individual sellers to use. This is like the local fire house that hosts a community tag sale - shoppers do not pay the fire house for items they purchase, they pay the individual vendors at their respective tables. The fire house is not responsible for collecting and remitting sales tax - the vendors are!
On one hand, I am salivating at the idea of eBay hitting heads with New York over "who" is supposed to collect and remit sales tax on online purchases, except our citizens' tax dollars will be squandered on these fruitless efforts!
On the other hand, I am horrified at the idea of eBay taking over and remitting sales taxes for me - I do not trust eBay with anything! and much prefer to submit my own tax filings myself!
The people who drafted this proposed legislation do not seem to understand that eBay and others do not collect payments. Payments are collected by the individual sellers who use the online venue to market their items. eBay forces sellers to use PayPal, which in essence is a banking service that transfers payments sent in from a buyer's account, to a seller's account.
As further proof it is the payment recipient/processor, PayPal must generate and send an IRS Form1099 to sellers whose income/payments exceed a certain amount. eBay has NOTHING TO DO WITH PAYMENTS. Nor do other similar operating venues.
I will be contacting my state representatives to let them know that this is one of the most misguided ideas I have ever heard of. Before writing proposed laws that will impact thousands of citizens, they should at least understand how the venues they want to govern operate.
I just wanted to send this along to make readers aware.