Sale tax for selling outside Ebay?

paparoke · 05-14-2022, 11:21 PM

Hi folks. Long story short...I sold 100% on Ebay last year and filed my taxes on schedule C with no issues. Obviously, Ebay collects and remits sales tax, so I had nothing to worry about on state tax filings nor did I have to worry about thresholds.

So far this year, I am going down the same route, but would like to also sell on other platforms(ie...facebook or here). I plan to collect funds through Paypal and I know they will provide a 1099K when I exceed $600 for federal tax purposes, no problem there. I'll just add that to my schedule C for next year. My question is, for those that sell on multiple platforms, how to you collect/remit sales tax for sales outside of Ebay? Or do you just not worry about them and only focus on paying federal taxes only? I would just hate at the end of the year for a state to say I exceeded a tax threshold and that I owe them money.

I just have so much to sell and would like to expand my avenues to do so. Thanks in advance for any inputs.

Branesergen · 05-15-2022, 01:28 AM

I just pay my sales tax quarterly based on the income. I don't collect, I just cover it out of my sales. Its a lot harder to collect when selling on a site that doesn't do it automatically like ebay does so I just cover it myself and adjust my prices accordingly.

checkoutmydeals · 05-15-2022, 08:04 AM

Prior to the Supreme Court ruling on sales tax nexus, I was an active seller on Amazon. Back then, certain states like Pennsylvania would spam Amazon sellers with nastygrams claiming that they probably owed them sales tax.

In response to this, a site called TaxJar dot com which would help sellers set up and pay sales tax in other states.

I don't know how relevant they are today, but the site still exists and might be worth looking into.

Alternately, you could set aside a certain amount of sales to pay tax if states start going after people. There's a difference between sending out a million letters claiming that "we think you might owe us money, so why don't you figure out how much and then send it in to us" and actually collecting it from people.

checkoutmydeals · 05-15-2022, 08:30 AM

I just pay my sales tax quarterly based on the income. I don't collect, I just cover it out of my sales. Its a lot harder to collect when selling on a site that doesn't do it automatically like ebay does so I just cover it myself and adjust my prices accordingly.

I presume you're remitting taxes to your state. I think the issue is that there are something like 3,000 different taxing authorities in the US, and some of them think that if you sell to someone in their jurisdiction, that you owe them money.

From a practical standpoint, most jurisdictions aren't going to do anything about it unless the amount of tax you owe is sufficiently large to do something about it. So if Pennsylvania thinks you owe them $200, they might spring 55 cents for a stamp to send you a nastygram. Maybe New York and California send out nastygrams starting at $600 or something. Even if 99% of the nastygrams are thrown in the trash, the amount paid from the other 1% is enough to keep the nastygrams coming. Not that government agencies are well known for doing cost-benefit analysis.

This might not affect most eCommerce sellers, but if you get into a position where you are selling $60,000 to $100,000 worth of merch per year, you might start triggering these sorts of liabilities. And although the enforcement mechanisms aren't really in effect today, there have been a lot of moves to make all bank transactions visible to the government. So maybe 10 years from now, some bureaucrat in some state 1,000 miles away from you decides you owe them money and flips a switch which shuts off your bank account and also remotely disables your car.

We're not there yet, but there are plenty of state and local governments which need lots of money, and don't mind wielding power to get it.

paparoke · 05-15-2022, 06:27 PM

I appreciate the inputs folks. I'm sure the future will hold mechanisms to trigger who owes taxes for certain states, but I don't think we're there yet. Using the Beckett marketplace as an example, I have yet to make a purchase and charge sales tax. I was wondering how all those dealers are able to get away from selling high volume and not have to worry about state taxes. Maybe they are treating all customers as resellers and are selling under the assumption that the buyers hold resale certificates. I don't think I sell enough to put up any red flags to any one state at the moment, but I'd hate to get something in the mail that I owe taxes for the last several years. Maybe I'll just stick to Ebay for now, we'll see.

Tiger23 · 05-16-2022, 07:56 AM

Look into use tax laws. In general if you have a garage sale and do not collect and remit sales tax on items sold, it is on the buyers to know what purchases they made and remit to the state when filing at year end.

paparoke · 05-16-2022, 12:20 PM

Quote:

Originally Posted by Tiger23

Look into use tax laws. In general if you have a garage sale and do not collect and remit sales tax on items sold, it is on the buyers to know what purchases they made and remit to the state when filing at year end.

Yikes, I wonder if anyone really pays use tax. Thanks for the heads up.

Tiger23 · 05-17-2022, 05:12 PM

Quote:

Originally Posted by paparoke

Yikes, I wonder if anyone really pays use tax. Thanks for the heads up.

No they don’t. Which is why states changed laws to force Amazon and sites to collect sales tax. Turbo tax has a question on the state return about purchases you didn’t pay tax on and that is where it is supposed to go.

05-14-2022, 11:21 PM	#1
paparoke Member Join Date: May 2010 Location: Nevada Posts: 4,342 papasharoke	Sale tax for selling outside Ebay? Hi folks. Long story short...I sold 100% on Ebay last year and filed my taxes on schedule C with no issues. Obviously, Ebay collects and remits sales tax, so I had nothing to worry about on state tax filings nor did I have to worry about thresholds. So far this year, I am going down the same route, but would like to also sell on other platforms(ie...facebook or here). I plan to collect funds through Paypal and I know they will provide a 1099K when I exceed $600 for federal tax purposes, no problem there. I'll just add that to my schedule C for next year. My question is, for those that sell on multiple platforms, how to you collect/remit sales tax for sales outside of Ebay? Or do you just not worry about them and only focus on paying federal taxes only? I would just hate at the end of the year for a state to say I exceeded a tax threshold and that I owe them money. I just have so much to sell and would like to expand my avenues to do so. Thanks in advance for any inputs.

05-15-2022, 01:28 AM	#2
Branesergen Banned Join Date: Mar 2012 Location: Montgomery Texas Posts: 6,908 Branesergen	I just pay my sales tax quarterly based on the income. I don't collect, I just cover it out of my sales. Its a lot harder to collect when selling on a site that doesn't do it automatically like ebay does so I just cover it myself and adjust my prices accordingly.

05-15-2022, 08:04 AM	#3
checkoutmydeals Member Join Date: Apr 2010 Location: USA Posts: 3,051 king-collect checkoutmydeals	Prior to the Supreme Court ruling on sales tax nexus, I was an active seller on Amazon. Back then, certain states like Pennsylvania would spam Amazon sellers with nastygrams claiming that they probably owed them sales tax. In response to this, a site called TaxJar dot com which would help sellers set up and pay sales tax in other states. I don't know how relevant they are today, but the site still exists and might be worth looking into. Alternately, you could set aside a certain amount of sales to pay tax if states start going after people. There's a difference between sending out a million letters claiming that "we think you might owe us money, so why don't you figure out how much and then send it in to us" and actually collecting it from people.

05-15-2022, 08:30 AM	#4
checkoutmydeals Member Join Date: Apr 2010 Location: USA Posts: 3,051 king-collect checkoutmydeals	I just pay my sales tax quarterly based on the income. I don't collect, I just cover it out of my sales. Its a lot harder to collect when selling on a site that doesn't do it automatically like ebay does so I just cover it myself and adjust my prices accordingly. I presume you're remitting taxes to your state. I think the issue is that there are something like 3,000 different taxing authorities in the US, and some of them think that if you sell to someone in their jurisdiction, that you owe them money. From a practical standpoint, most jurisdictions aren't going to do anything about it unless the amount of tax you owe is sufficiently large to do something about it. So if Pennsylvania thinks you owe them $200, they might spring 55 cents for a stamp to send you a nastygram. Maybe New York and California send out nastygrams starting at $600 or something. Even if 99% of the nastygrams are thrown in the trash, the amount paid from the other 1% is enough to keep the nastygrams coming. Not that government agencies are well known for doing cost-benefit analysis. This might not affect most eCommerce sellers, but if you get into a position where you are selling $60,000 to $100,000 worth of merch per year, you might start triggering these sorts of liabilities. And although the enforcement mechanisms aren't really in effect today, there have been a lot of moves to make all bank transactions visible to the government. So maybe 10 years from now, some bureaucrat in some state 1,000 miles away from you decides you owe them money and flips a switch which shuts off your bank account and also remotely disables your car. We're not there yet, but there are plenty of state and local governments which need lots of money, and don't mind wielding power to get it.

05-15-2022, 06:27 PM	#5
paparoke Member Join Date: May 2010 Location: Nevada Posts: 4,342 papasharoke	I appreciate the inputs folks. I'm sure the future will hold mechanisms to trigger who owes taxes for certain states, but I don't think we're there yet. Using the Beckett marketplace as an example, I have yet to make a purchase and charge sales tax. I was wondering how all those dealers are able to get away from selling high volume and not have to worry about state taxes. Maybe they are treating all customers as resellers and are selling under the assumption that the buyers hold resale certificates. I don't think I sell enough to put up any red flags to any one state at the moment, but I'd hate to get something in the mail that I owe taxes for the last several years. Maybe I'll just stick to Ebay for now, we'll see.

05-16-2022, 07:56 AM	#6
Tiger23 Member Join Date: Jan 2021 Location: NC Posts: 253 Bschneider23 Bschneider23	Look into use tax laws. In general if you have a garage sale and do not collect and remit sales tax on items sold, it is on the buyers to know what purchases they made and remit to the state when filing at year end.