EBay Tax Question

[Mr. Jelly]

I sold a used guitar on eBay and the buyer was charged sales tax. According to the PayPal statement I saw anyway. I am not a business. Has something changed or have I missed something? Fill me in.

[Ncbandit]

I believe it is automatic now for certain States on EBAY. I think they have a list posted.

[Dwight]

The buyer pays the same sales tax he would pay in his state at a Brick & Mortar store. Ebay collects the Tax on behalf of your home state.

[Ben M.]

In Indiana when you buy anything from an ebay seller who is also in Indiana you have to pay sales tax.
Maybe it's the same in Iowa

[RP]

Originally Posted by Ncbandit

I believe it is automatic now for certain States on EBAY.

Reverb also collects and disperses taxes on sold items. For that matter, Musicians Friend has also started collecting taxes on purchases...

[DenverSteve]

It happens on Amazon, Ebay, most sites and becoming common place. The buyer pays "state" tax not local, city or specialty taxes.

[Rudy4]

In many states it has always been the buyer's responsibility to pay state tax if the on-line retailer didn't collect it. You fill out a form and submit it when you file your taxes.

I have a friend who purchased a high end camera on line and received a notice of tax due, plus interest, and a hefty fine three years after the purchase.

Take your tax obligation seriously and don't ignore it because you aren't charged by the on line retailer.

[sdelsolray]

The SCOTUS ruled (about a year or two ago) that it is legal for a state to collect sales taxes on transactions involving one of the state's citizens purchasing an item from out of state, i.e., on the internet.

Many (most?) States have jumped on that revenue bandwagon.

[llew]

South Carolina certainly has...

[mattcran]

I think it's 35+ states they're collecting for now. If I remember correctly, ebay and reverb are processing two different ways. Reverb collects from the buyer and pays the state. Seller gets same amount and it's completely behind the scenes. On eBay, as the seller, you get the full payment (including the tax) and ebay charges it back from you on your monthly invoice. Don't be shocked when your fees invoice seems higher!

[Ben M.]

Taxation of guitars is theft

[tigobah]

I've been selling books on eBay for 19 years. Until recently it was my responsibility to collect sales tax on any sales I made to California buyers. Once a year in January I would file a state sales tax return and send them the sales taxes I had collected for the previous year.

Now eBay collects the taxes not only for California buyers but for other states. They no longer pass the sales tax money on to me and I guess they pay the states directly. After checking with the California tax board I find that I will no longer have to file a sales tax return unless I make sales on sites where the tax is not automatically collected (which I don't.) so for me it's a good deal.