eBay in its help section updates the number of states and effective dates for which it will collect sales tax.
Since last year’s US Supreme Court decision that effectively removed physical nexus as the deciding factor when a state can collect sales tax from a remote seller, states have enacted new laws that may require marketplaces to collect and remit sales tax on behalf of sellers.
Here is the current list of states for which they are or plan to collect sales tax. This list may change as state legislatures pass new laws and we will provide updates as needed.
- Minnesota – effective January 1, 2019 (However, Minnesota has enacted a small business exemption for out of state unregistered sellers whose taxable retail sales into Minnesota are less than $10,000 in the previous 12-month period. These sellers are not subject to the Minnesota marketplace tax laws, and eBay will not be collecting sales tax on these transactions.)
- Washington – effective January 1, 2019
- Iowa – effective February 1, 2019
- Connecticut – effective April 1, 2019
- New Jersey – effective May 1, 2019
- Alabama – effective July 1, 2019
- Oklahoma – effective July 1, 2019
- Pennsylvania – effective July 1, 2019
Sellers May Be Responsible Before eBay Starts Collecting Sales Tax
It is important to note that some effective dates are well beyond effective dates for Economic Nexus that may impact sellers.
There are also inconsistencies with effective dates of when eBay will collect sales tax and the listed state’s sales tax laws.
And a few states are not listed that have passed marketplace facilitator laws that technically should require eBay to collect sales tax but are not included on their latest list.
It is unclear why these inconsistencies exist and therefore sellers should consult with their accountant or legal professional for more advice.
Also, we have a Guide on Sales Tax that provides some additional information about reporting requirements.
What are your thoughts on this whole sales tax mess? Please use the comments section below or head over to our Facebook Group for Small Business Sellers and interact with other small business owners.