increase in EBAY buyers who dont want to pay sales tax?

[Hawaiian BamBam]

Hey guys, for those that sell on EBAY, have you noticed an increase of sellers that dont want to pay sales tax on purchases? im getting an increase of buyers that AFTER paying for the item, want me to refund them the state sales tax i charge (and report to the state quarterly) do ebay buyers NOT know they are required to pat state sales tax on purchases? by the wording on alot of my message from buyers it is apparent that ALOT of EBAY sellers dont charge sales tax...your thoughts please...thanks

 

[Rhubarb_Runner]

As an eBay purchaser, I have NEVER paid sales tax on a purchase, and have never been asked to.

 

[JamesNevans]

I believe you have to collect tax only on residents of your own state. And yes, everyone is required to pay a form of sales tax on their internet and out of state purchases by paying a "use" tax on your state income tax return. If audited you can expect the state franchise tax board to look at things like eBay PayPal accounts to see the pattern of purchases.

In order to avoid sales tax a purchaser mush provide a form with a current valid resale license, so you are within your right to deny any request to refund the sales tax portion.

 

[Hawaiian BamBam]

thanks for your response, i appreciate it. i know that as a seller, when you list an item, there is a spot to ask for state sales tax, with a drop down menu where you select your state and state tax percentage. i know that in the state of california the state wants their cut (as with everything in California) and piece of the pie for any internet sales. i think maybe it gets into a gray area depending on if you are running a ebay business (for profit) or just selling some extra cards on ebay?? to play it safe i just collect sales tax on all my california sales and then i report it quarterly to the state tax board. the state happily takes my money and never told me to NOT collect taxes! any other insight on this?

 

[Hawaiian BamBam]

thanks james for your response. it just seems to me that sooo many ebay buyers seem alarmed that i am charging them sales tax (for those customers/sales to california only) i do know that every single purchase i have made from ebay sellers based in california since 1999 have in fact charged me sales tax. i always got charged by sellers and really had no problem paying it as a buyer because thats just how it is in california (we are taxed on everything here!) so now that i am a seller, i am just surprised by how people want a refund when they find out they have to pay sales tax.

 

[JamesNevans]

I think in California's settlement with Amazon that sales over a certain threshhold (none of us come close to that threshhold) will require sellers to use software that collects taxes based upon state sales IF they have a physical presence in the state even if they are based outside of California for corporate or incorporation purposes.

 

[thedarkbrown]

Contrary to popular belief, it is not the consumer's responsibility to pay the sales tax. The business is required to report sales to the state every month to keep their business license, and for all in-state sales that business is required to pay sales tax. For sales that originated from and shipped to a different state, the business has to report the sale (all sales), but does not have to pay sales tax. If a business sells an item in-state, they must report the sale and pay all related taxes to the state on a monthly basis. Since businesses don't like people cutting into their proift margins, they pass this to the consumer and make them pay the sales tax. Over time, the general public just pays it without questioning it and businesses make the consumer think that they are responsible for paying them. Consumers are not required to pay sales tax, the BUSINESS is. Paying taxes on in-state sales is the cost of doing business and should not be passed on to the consumer. J and K Stuff doesn't charge any tax on in-state sales as it's our cost of doing business. Whatever taxes we have to pay comes out of our profit.

Use tax is a different story.

Regarding your ebay sales and charging taxes...
1.) If you have a legitimate business license, you are required to report in-state sales monthly or quarterly. If you aren't a business, you only have to report profit from sales on your income tax.
2.) If you paid taxes on an item and re-sell it in-state, you don't have to pay sales tax to the state, since you already paid taxes when you purchased it.

As a legitimate Limited Liability Corporation (LLC) business here in AZ with a Federal Employer Identification Number (EIN), we found all of this out when "setting up shop" and maintaining the business license. BTW, a valid business license is required to purchase at true wholesale prices and manufacturers and distributors require one to sell to you, just FYI.

I am not a tax professional by any stretch of the imagination, this is stuff we've figured out on our own. It's written right there in the AZ tax code and requirements so it doesn't really take a professional to figure it out.