Ebay Taxes? Seeking an explanation

This may have been discussed before, but I made a recent card purchase on ebay and I got taxed quite a bit for what I was buying. I have read a little bit about the new Ebay taxes, but I still feel pretty uninformed. Would anyone mind explaining why Ebay has implemented such taxes on the buyer? Thank you!

If you mean taxes and import charges as a buyer you should be able to find all the relevant information here.

www.ebay.co.uk/help/selling/fees-credits-invoices/taxes-import-charges?id=4121

If you’re talking about American sales tax, here’s the information page from ebay
www.ebay.com/help/selling/fees-credits-invoices/taxes-import-charges?id=4121#section4

The TL;DR of it is that the US Supreme Court ruled that states can charge taxes on online marketplace purchases, “even if the seller does not have a physical presence in the taxing state” which was not a thing before South Dakota v. Wayfair, Inc.
So many states have now been requiring that buyers must pay sales taxes for online marketplace purchases. This is not Ebay’s fault. In fact they are doing the seller a favor by collecting tax from the buyer and remitting it on behalf of the seller.
Here’s a detailed (and visually pretty) breakdown by state:www.avalara.com/us/en/learn/guides/state-by-state-guide-to-marketplace-facilitator-laws.html

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When your family lives in Missouri and you live in Tennessee :blush:

So are the states that don’t collect sales tax in grey in the pic? As it says from December 19 but some new laws went into effect from Jan 1st. Or does anyone know if any states don’t collect sales tax through eBay?

Add on question:
Since the change in laws, I’ve been taxed on sites like amazon, ebay, and tcgplayer but there is still another card site that I use that does not charge sales tax. I live in Utah so I’m confused why some sites are charging me and others are not. Does anyone know the technicalities behidn this?

Also, can using a vpn prevent a buyer from paying taxes online?

I am not a sales tax accountant but I do work in the personal income tax field and have some experience with sales and use tax codes.

Some states do not charge sales taxes and so, when you check out, no tax will not be charges sales tax. Sales tax is only charged if what you’re buying is being delivered into a state that charges sales tax.

The old sales tax rules used to be mostly involving nexus and physical presence. Pretty much if you had a physical location in the state than you needed to collect sales tax on all transactions in the state. With the ruling of the above mentioned case involving wayfair(a company with little to no physical locations), the courts caught up to the new age and has decided to charge sales tax from these online only businesses in what they call economics nexus.

This economic nexus has states implementing qualifications laws that involves online businesses collecting sales tax if the amount of transactions and/ or sales during the year reach a certain amount. Keep in mind this is on a state by state basis and so each state can have different limits but only involves the business done in that state. In South Dakota, if a business has $100,000 in sales in the state or 200 transactions, than they need to collect sales tax from those transactions for that state.

Businesses like eBay, Mercari, TCGplayer have decided to tax all transactions that will be delivered into states with a sales tax as this is easier than trying to monitor every seller for the transaction and sales limits across every state. Smaller online sellers may not charge sales tax because they don’t meet that states threshold or they may risk not collecting and hope they don’t get caught. Using a vpn won’t work as the sales tax gets charged based on your delivery address and not where it is you’re ordering from.

That’s basically a summary or the issues at hand. Wayfair lost their case 5-4, so it’s possible that other companies may try to moves cases forward I hopes they’ll win but for now, the states have the power.

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Thanks everyone for the explanations! This clarifies a lot. I really appreciate it.

I am still confused about this. Recently, I made an ebay sale and I noticed this new [2-3 yrs since 2017] tax. So the buyer paid it, but it seems ebay paid that money to me? :thinking:

You can see what they were charged but it does not go to you. Verify this by checking that transaction on your Paypal account.