eBay Announces They Will Start Collecting Sales Tax in 2019

eBay Sales Tax Update

Ever since the U.S. Supreme Court ruled in the favor of South Dakota in South Dakota v. Wayfair and eliminated the need of a physical location to define nexus for remote sellers when they must collect sales tax, small businesses have been wondering how this will impact them.

READ MORE: The Fuzzy Math by States in Sales Tax Case South Dakota v. Wayfair

Amazon and Etsy already had started to collect sales tax on behalf of sellers in three states, Washington, Pennsylvania, and Ohio based on so-called marketplace sales tax laws.

Now eBay is following the other two marketplaces to start collecting sales tax in those three states. The company released a notification to sellers that indicates eBay will be collecting and remitting sales tax on sales to buyers in those starting next year:

  • Washington—starting Jan 1, 2019
  • Pennsylvania— starting July 1, 2019
  • Oklahoma—starting July 1, 2019

“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.

There are no opt-outs for selling items into the states listed above, or out of eBay automatically collecting sales tax for items shipped to the states above.”

eBay Statement

While other states have not enacted similar marketplace sales tax laws, it is likely they will do so in order to achieve higher compliance with their new requirements.

Sellers May Still Be Responsible

The delay in implementing the collection of sales tax in those three states also still means that sellers are still responsible to possibly collect sales tax based on 2018 in those states.

Why eBay chose not to include Pennsylvania and Oklahoma to avoid this problem is a bit of mystery. If eBay would have started the collection on January 1, 2019 for all three states, this possible problem could have been avoided.

eBay also said that sellers can stay informed about changes to sales tax collection on the marketplace by visiting their Help Section.

READ MORE: eBay is Already Prepared to Collect Sales Tax for Sellers

What do you think about eBay collection sales tax in at least three states starting next year? Drop us a line in the comments section below or visit our Facebook Group.

26 COMMENTS

  1. Well Washington State likes to be the first State to screw their own citizens! We are now the highest taxed State. I have just stopped my bid on Ebay and will not bid or sell anything more on line !
    I think our Government is failing us tax payers . They should use our taxes for it’s intended purpose and learn how to live on nothing as they know we the tax payers have to because of them trying to build their own legacy on our back!

  2. The “gross amount” on the eBay Transaction details report includes the WA sales tax.
    I report the ‘gross amount’ to the IRS as the amount we received from the buyer.
    It works for 49 of the 50 states in which we sell but it’s not true anymore for WA.
    In the case of WA the sales tax is NOT SHOWN on the Transaction details report.
    In the case of the PayPal report the eBay ‘gross amount’ is reduced by the sales tax amount.
    Therefore, sometimes the gross amount is accurate enough to report to the IRS and sometimes it isn’t.

  3. The only thing this is going to do is reduce the sales margin for the seller, just like it did when eBay started charging Final Valuation Fees on shipping. A buyer computes their bottom line cost when bidding. If I think I’d pay XX dollars for something on Craigslist, that’s probably what I’d pay on eBay, no more. So, if sales tax, shipping, and handling exceed my limit, I’m bidding lower to account for that. So, the seller is the one ultimately screwed.

  4. As an eBay seller, I am starting to get low ball offers on items I sell. from customers in Washington, Pennsylvania and Oklahoma thanks to the sales tax fiasco. I am discouraging people from those states to bid on my items

  5. Why would someone want to buy $100 item with 9% sales tax, when they can get it somewhere else without paying sales tax. Looks like we’ll be loosing many costumers in a working class neighborhoods. RIP eBay.

  6. I’m going to bring my business elsewhere. I constantly shop on eBay. No more looking for items on eBay unless I can get the item cheaper to reflect the incresed amount for the taxes.. I just spent days researching looking for deals narrowed it down compared my prices to other online retail, only to then have $40 added to the total when I went to check out. I will start buying directly from the seller through PayPal and bypass eBay and avoid this fees and taxes. eBay should have invested some money into good lobbyists to prevent this law from passing. Good job eBay for failing.

    • No laws were passed. It was a Supreme Court opinion that overturned two previous opinions. After that happened, it opened up the floodgates for states to collect sales tax across state lines. Over the next few years, this will eventually catch up to many sellers. While you are right, a small seller will likely be able to stay below some of the thresholds set by states, it will become more and more difficult to find these sellers that can legally avoid collecting sales tax.

      Richard

      • People understand that your just the messenger it’s the frustration small sellers have with their states and selling platforms. It’s this simple sales must have a huge cost to sale ratio or profit just isn’t feasible, profit not possible sellers either go elsewhere or they close up shop they close up shop nobody makes anything States, sales platform or the seller.

  7. Wash. State is becoming a socialist state,haves taking care of the have nots.And our governor wants to run
    for President.Good luck to all of us if this kind of mentality becomes president.I hope this means most ,who
    still believe people should be responsible for their own well being.We’re being taxed to ( ).

    Thanks 😠

  8. What concerns me is that eBay might collect sales tax on everything, including clothing, which is not taxable in PA. We shall see. This wouldn’t even be legal. Who keeps that money? Even if they did send it to PA treasury, it’s still illegal, deceptive. eBay has no right to collect it and PA has no right to receive it.

    • eBay is going to collect sales tax based on listing categories. So in states that have exceptions to sales tax for food, clothing, or in other categories, eBay would not collect them. But it is up to the seller to use the right category. Most sales tax reporting services handle these type of exemptions very well, so I assume eBay is either using one of them or is using the same data points. Sales tax exemption holidays could be a different situation, but they may also no apply to online interstate sales either as they are usually meant to stimulate the local economy.

    • Exactly!! There is no sales tax in NYC for clothing or shoes under $110 either!! I just bought clothing items from JAPAN and was charged sales tax!! The Japanese Seller didn’t even know what “tax” was yet all EBay would say is “Talk to your tax advisor” and “We’ve been mandated by the government to collect sales tax”. Im wondering the same-who is keeping this money?

  9. Richard; untrue that they are taxing pre shipping charges.. I just had a sale FINALLY to Washington and it made me charge the customer 10.19%, and the box was ticked ‘Tax is applicable to shipping and handling’.. and it was all grayed out, NO way for me to change or amend it.
    Guess I need to spend the morning trying to figure out where I need to remit this WHOPPING $1.25 I had to charge the customer!

  10. Ebay just started collecting tax on NJ buyers on out of state purchases as of 5/1//2019, what BS! It will certainly curtail the amount of purchases I make on that site, too bad!

  11. i have been on ebay for twenty years and have purchased thousnds and thousnda of items for a ton of money i live in nj and now that ebay is charging me tax they will see very little of me. ebay is losing money on thiis one

  12. This is stupid. Craigslist, Garage sales, local ads…no taxes on used goods! How can they charge full retail sales tax on personal used items? Now I cant buy anything in my own state unless its way low enough to make it a good deal WITH taxes. Sellers in those states are going to lose big time. SO the sellers in states that do NOT charge taxes will be the ones making more money since people will only buy where they won’t be taxed from.

    What a scam.

  13. Utterly and completely ridiculous to tax USED items that have already been taxed the first time they sold. I would think this is a form of double, or even triple taxing (depending on how many times an item was sold, re sold, etc). Also, since when did eBay have the authority to charge ME tax; That should be at my discretion. eBay is in full and complete control…Just how they like it. Yet there is zero oversight for fact that China is the biggest scammer on all of eBay; they flood every single market with their garbage; claiming its American made, or from USA, etc. all a scam. And eBay does nothing to restrict them. Also, if eBay is so into “following the rules”, why aren’t they charging China a tariff to sell goods to the US? Hmmm? Seems to me that if China wants to sell goods thru eBay, they should be charged a 25% tariff! At least until this trade war is over. China knows this, that’s why there’s been a surge in listings on eBay that are from China. After all, eBay is charging me tax….Seems only right.

    • eBay charging sales tax for some states is because of so called “marketplace facilitator” laws passed in those states. It is no longer at the discretion of the seller but eBay complying with new laws.

      Richard

  14. not much point in using eBay anymore now that they collect taxes. i’m not talking nickel and dime stuff but bigger ticket items. definitely going to hurt sellers.

  15. also Now the USPS is also raising their Priority Boxes especially using Regional A and B Boxes and ebay charges you 10% extra lol What is the worst is that a buyer can rate your shipping price even when you charge less than shipped price. Ebay make millions on shipping. You think they are giving you a break but they take it right back

  16. eBay is much less relevant for me now. In my eyes, it stood above the competition because I could score free shipping, WITHOUT a membership fee, and I could generally avoid taxes. Sure, eBay still is a great place to find just about anything, especially used and/or vintage/rare items. The bottom line is the bottom line though. As buyers, THAT is what we pay attention to. We don’t care what factors play into the grand total, and what does or does not go into a seller’s pocket. We care about getting deals, and saving money. With the new tax ruling in effect, this has become MUCH harder for both sides. Sellers are going to get lowball offers left and right, especially in states with high tax rates. Between eBay fees that have long been in place, coupled with being forced to charge tax, many if not all eBay sellers are going to start feeling their bottom lines drop out. Buyers will be much more hesitant to spend on eBay. It’s going to push more of us back into brick and mortar stores, as well as have us seek means of doing business with sellers directly or elsewhere, OUTSIDE of eBay. I will be spending my last and final eBucks certificate when it comes, and then I’m out. Chances are, the certificate won’t actually save me any money on the item I purchase. It’s much more likely that it will only cover the tax added to what I buy.

    I am a long time supporter of eBay. I have talked it up for years, bringing both my family and friends to the site. We are all on our way out now. Thanks for the years of fun eBay…

    R.I.P.

    • eBay has become each States little tax collection stooges. I hope that whatever little percentage each state pays you that it will help cover some of your revenue losses. Disappointed.

  17. So, would it benefit sellers/buyers to list an item at a lower price and have the shipping price higher, on lower priced items at least?

  18. How does my State of NJ get away with charging an eBay sales tax on a piece of used clothing costing under $110? If Kohl’s, Targets, Marshalls, TJ Max, Modell’s etc doesn’t charge that sales tax then how can eBay collect that sales tax? And where does that illegal collection go? Something does’t seem right here.

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