ebay collecting state sales taxes

[ProAm]

It seems that ebay is collecting state sales taxes for the ship-to state on purchases, even between individuals. For my state, Tennessee, they started doing this in Oct 2020.

Tennessee has a high sales tax - almost 10%.

I bought a cornet in Sept with no tax added. I just bought a trumpet off ebay and there is an $80 tax charge added. This was NOT disclosed prior to the completion of the auction.

If you do business on ebay with a store, the listing will estimate the taxes you will owe, I believe. Or maybe this is just on buy-it-now listings. I have paid sales taxes on ebay purchases but I knew in advance to expect them.

From now on I will need to factor in a 10% tax on anything I buy using ebay. This effectively removes me from shopping for instruments on ebay.

Is this just ebay or does it affect stores, like Dillon Music? What about Reverb?

For a long time, if you bought something outside your state from a store that did not have a presence within your state you were not obligated to pay state sales tax. Now they are using ebay to collect taxes on transactions between individuals?

I am surprised by this but I guess that I should not have been.

I think this is a change with a major impact on both buyers and sellers. Am I wrong?

[LittleRusty]

It is nice of them to help the customers by collecting the tax up front, rather than the customers having to send it to the state for themselves as required by law in most states. (maybe all?)

(everyone was doing that, right)

I can see how it would add uncertainty to a purchase. You would think that if they can calculate it at sale time then they could calculate it when bidding. Not adding it to the bid, but telling the bidder that the total is bid + tax.

OTOH, this does level the playing field a little between the stores that have to file sales figures and collect taxes for the state and individuals that are unlikely to report the income or collect sales taxes.

[gregplo]

[A.N.A.Mendez]

One of those laws that is out of the hands of the seller and buyer. Add up all the taxes you pay sometime.... You will think might as well move to Norway.... At least there they tell you the taxes are 70 % but they take care of everything.....
_________________
"There is no necessity for deadly strife" A. Lincoln 1860

☛ "No matter how cynical you get, it's never enough to keep up" Lily Tomlin☚

[ProAm]

I don't deny that I should have known about this. Of course government tries to tax EVERY transaction. A government that will tax the tips received by servers in a restaurant (arguably a gift from the diner to the server) will tax anything.

But I did not realize this had changed until I began to check out. The horn I bought is not worth an extra $80 to me. After playing ebay for over 20 years and never having a ding against me, I am considering not paying for this item. If I do I will contact the seller to arrange to compensate him for any charges he incurs for a non-paying bidder. It would be cheaper for me than paying the $80 tax.

I am also considering shipping the horn to children I have in various states. I checked one last night and I can reduce the tax by $20 by having the horn shipped to Alabama rather than Tennessee. (Unfortunately, I do not know anyone in Alaska, Montana, New Hampshire, Delaware, or Oregon which are no sales tax states).

I am not surprised to learn that Reverb is included.

What about Dillon? Or other music stores that are locate in a single state? Do I have to pay Tennessee taxes if I buy from Dillon and have it shipped here.

I am near the Virginia border and regularly take into account whether I can make large purchases in Virginia rather than Tennessee. Why not save 5% if it is no extra trouble to shop in Virginia?

[Vendrick]

I think eBay is getting a bit out of hand. I saw the new no Paypal option for sellers just for them to make more money. It's actually a shame because they will lose a lot of sellers. It comes to the point where big corporations don't respect any rules. I have a small shop in Nebraska, and for my employees, I have to adhere to so many rules otherwise, I'm risking a fine by IRS. The other day I was reading about the new laws regarding payroll on https://www.global-accountant.net/payroll-tax-penalty-questions-answers/. Very informative article explaining every parameter!

[LittleRusty]