eBay Announces They Will Start Collecting Sales Tax in 2019

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.

4 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.

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