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Mon May 7 2018 09:06:56

Sales Tax Calm before the Storm for Online Sellers?

By: Reader

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Dear Ina,
The hoop dee do over the online sales tax seems to have disappeared. I hear nothing about decisions from the court or when they will make a ruling.

Can you tell me about how long this will take to hear what is next for those of us who sell online?
Bruce

Note from the editor: On April 17, the Supreme Court heard South Dakota v. Wayfair, a case that could overturn Quill vs. North Dakota and allow tax agencies to force merchants with no physical presence in their states to calculate, collect, and remit sales tax on transactions made to their residents. We expect a decision from the High Court by June.




Comments (20) | Permalink

Readers Comments

Sales Tax Calm before the Storm for Online Sellers   Sales Tax Calm before the Storm for Online Sellers

by: ebayout This user has validated their user name.

Mon May 7 18:24:01 2018

ebay likes to claim MY sale as THEIR sale, which they euphemistically call their "GMV".
Good...if it's THEIR sale, let them pay the freakin' tax.

Sales Tax Calm before the Storm for Online Sellers   Sales Tax Calm before the Storm for Online Sellers

This user has validated their user name. by: RKTOYS

Mon May 7 18:42:56 2018

How are they going to force anybody to do anything?  PA holds a tax amnesty event every couple years where they beg like paupers to pretty please pay your back taxes and then does nothing if you don't.  It's not like they can account for the money anyway with how many needful doers they keep hiring in the IT departments.

Sales Tax Calm before the Storm for Online Sellers   Sales Tax Calm before the Storm for Online Sellers

by: lamplady This user has validated their user name.

Mon May 7 20:45:14 2018

This issue is so complicated and involves not only eBay but will affect all online out of state sales. I suspect the Supreme Court will dump it back to Congress

Sales Tax Calm before the Storm for Online Sellers   Sales Tax Calm before the Storm for Online Sellers

This user has validated their user name. by: Bill

Tue May 8 00:16:43 2018

lamplady:

Yes they will and Congress will never get to it since they are all muddled in their own problems.

Sales Tax Calm before the Storm for Online Sellers   Sales Tax Calm before the Storm for Online Sellers

This user has validated their user name. by: Marie

Tue May 8 01:58:27 2018

GMV is an indicator number.  It is not a number used as Sales on ANY financial statement for any website to include Ebay.

Sales Tax Calm before the Storm for Online Sellers   Sales Tax Calm before the Storm for Online Sellers

This user has validated their user name. by: Marie

Tue May 8 02:09:16 2018

Gross merchandise value is the total value of merchandise sold over a given period of time through a customer to customer exchange site. It is a measure of the growth of the business, or use of the site to sell merchandise owned by others.

Sales Tax Calm before the Storm for Online Sellers   Sales Tax Calm before the Storm for Online Sellers

by: Snapped This user has validated their user name.

Wed May 9 09:37:40 2018

''Gross merchandise value is the'' [maximum listed] ''total value of merchandise'' [claimed to be] ''sold over a given period of time through a customer to customer''['s customer] ''exchange site. It is a'' [claimed] ''measure of the growth of the business, or use of the site to sell'' [and return, without concern for subtracting return value] ''merchandise owned by others.''

Since we're striving for accuracy and such....

Sales Tax Calm before the Storm for Online Sellers   Sales Tax Calm before the Storm for Online Sellers

This user has validated their user name. by: Marie

Wed May 9 12:22:15 2018

@snapped

What wasn't accurate was to suggest that GMV was part of a Ebay Financial Stmt made by another poster, but it has been said here before as well.  I understand your need to correct my post for it to work better for you, but that doesn't change the reason for the post or make the post was inaccurate.  

Sales Tax Calm before the Storm for Online Sellers   Sales Tax Calm before the Storm for Online Sellers

This user has validated their user name. by: FidoMaster

Wed May 9 18:03:32 2018

The way ebayout put that I think resonates with a lot of sellers.

Marie, I didn't see where anyone specifically said that "GMV was part of a Ebay Financial Stmt."

- Agree on your point GMV ≠ "Sales"
- Agree that it's an "indicator number"
- Though GVM absolutely is "part of a Ebay Financial Stmt"

My understanding is pre-discounted seller prices are captured/reported as eBay's GMV. Thus, (my assumption) is if a buyer purchases for $85 using a sitewide 15% off coupon an item priced at $100,  eBay is going to record $100 GMV resulting from that transaction.

But what about a seller who originally lists an item for $150 then through a markdown or simply reducing the list price over time down to $100 when a buyer finally hits the buy button.  

Since eBay defines GMV as the total VALUE of all successfully closed transactions, what was the "value" (through eBay's eyes) in that transaction? Was it a $150 "value" item that sold for $100? Does eBay record that as $100 or $150 GMV? (naturally I think most of us would agree that $100 is the "correct" value, but I'm not sure eBay sees it that way).

Same goes for a buy 2, get 1 free BOGO for a $10 item, is that $20 or $30 eBay GMV? (I'd bet eBay reports it as $30). Does anyone know for certain? I'd really like to know.

Sales Tax Calm before the Storm for Online Sellers   Sales Tax Calm before the Storm for Online Sellers

This user has validated their user name. by: Bill

Wed May 9 23:33:03 2018

Many years ago when eBay started using GMV it was determined on some threadon some blog that it was for the total value including shipping with no discounts or returns figured in. That is why they use the discounts coupons that they give out as a marketing expense.
SO if you had a widget that is listed for $30 and shipping is $10.00 it might sell for only $25 because of any discount but eBay will have the GMV as $40.
Now considering that the shipping cost increased this last quarter in reality the GMV only increased at the most 5% and probably less and if you figure in the dollar amount for the actual sales it was probably down.
So lets compare: eBay went up 7% on the GMV (probably a negative in actual sales) and Etsy went up 18% in actual sales who is the loser?

The answer is clear to see.

Sales Tax Calm before the Storm for Online Sellers   Sales Tax Calm before the Storm for Online Sellers

by: koonkat This user has validated their user name.

Thu May 10 04:56:19 2018

There are roughly 10000 sales tax jurisdictions in the US.  On top of that, you have entities like Amazon trying to get even single location "Mom & Pop" taxed everywhere.  Just to erase any sales tax "advantage" they (the smaller merchants) may hold.

I use services in my home state, and feel my state is legally entitled to have sales tax withheld from home state transactions and remitted to them.  Elsewhere,  not so much.

One place I can see this case going is to the establishment of a harmonized sales tax like Canada.  Say with 6.5% going to every state and 6.5% going to Washington.  Yes, Washington.  To cover the massive income tax rate reductions now enjoyed by the 1%!  Only regressive.

Sales Tax Calm before the Storm for Online Sellers   Sales Tax Calm before the Storm for Online Sellers

by: Chicago48 This user has validated their user name.

Thu May 10 09:24:51 2018

A ruling will come in June.  Don't celebrate YET.

Sales Tax Calm before the Storm for Online Sellers   Sales Tax Calm before the Storm for Online Sellers

by: epuise This user has validated their user name.

Thu May 10 09:26:18 2018

I doubt eBay subtracts RETURNS or UPIs from GMV, and, in my case, GMV can be 50/50 item/postage... numbers are false stats unless you know the accounting behind them. I can have a GMV of 100. My cogs and fees and postage can be 100. That is a 0 net sale proceed.

Sales Tax Calm before the Storm for Online Sellers   Sales Tax Calm before the Storm for Online Sellers

by: topdog This user has validated their user name.

Thu May 10 10:32:55 2018

Sorry Koonkat, but the tax savings are not (just) for the 1%. We will enjoy a large savings next year due to the doubling of the standard deduction - as will many middle class people. Please stop parroting  talking points without getting the facts straight. Yes, the 1% will save the most, but they also paid the most - 45.7% in 2014.  

Sales Tax Calm before the Storm for Online Sellers   Sales Tax Calm before the Storm for Online Sellers

by: Whatever This user has validated their user name.

Thu May 10 11:18:23 2018

Nobody talks about free shipping - since ebay considers the entire transaction a sale and takes their cut on the whole thing - how's this actually going to work out for the seller? Are we then paying a sales tax on the shipping as well? ALL my GTC are being changed to 30 day - getting ready for the exodus.  

Sales Tax Calm before the Storm for Online Sellers   Sales Tax Calm before the Storm for Online Sellers

by: topdog This user has validated their user name.

Thu May 10 16:31:10 2018

Whatever - yes, you'd have to collect tax on the entire amount, unless you collect shipping separately. If it's "free" shipping, then it's officially just that - free, so no deduction for that.  

Sales Tax Calm before the Storm for Online Sellers   Sales Tax Calm before the Storm for Online Sellers

by: Tinker Belle This user has validated their user name.

Thu May 10 20:49:22 2018

@koonkat - Per my CPA, my tax bill was over $3,000 LESS THIS YEAR because of the new tax structure.  

I agree with topdog - !  

Sales Tax Calm before the Storm for Online Sellers   Sales Tax Calm before the Storm for Online Sellers

by: Tinker Belle This user has validated their user name.

Thu May 10 20:50:51 2018

@ Whatever - Here in New York at least, shipping is a ''service'' and therefore is taxable. If nothing is charged for shipping then the tax is levied on the item price.    

Sales Tax Calm before the Storm for Online Sellers   Sales Tax Calm before the Storm for Online Sellers

by: topdog This user has validated their user name.

Thu May 10 21:46:35 2018

Tinker Belle - one more reason why this whole sales tax idea stinks. How are sellers going to keep track of all the different laws? Most places do not tax shipping, but clearly your state does. Or let's go into my space - the ubiquitous Clif Bar is not taxable in Texas, it's considered a food item. In other states it's considered a nutritional item, and is taxable. Somehow I doubt that the easy and seamless software solutions that the tax crowd touts will unravel these issues - and who would want to risk an audit over this garbage?

Sales Tax Calm before the Storm for Online Sellers   Sales Tax Calm before the Storm for Online Sellers

by: ConnecticutGal This user has validated their user name.

Fri May 11 01:10:18 2018

The new Fed tax package doesn't take effect until 2019 (for 2018 results) so if you saved $3000 on your taxes for 2017, something else occurred in your personal tax situation.  Also, increased the standard deduction doesn't compensate for a cap on state and local taxes (like real estate taxes) for those of us in higher taxed states. Overall, most people will feel an increased tax bite or a nominal tax benefit unless you are in the highest tax brackets or the lowest.  



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