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.
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.”
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.