eBay Starts Collecting Sales Tax with More States to Come

eBay announced in October it would begin collecting sales tax in 4 states in 2019 due to new laws that extend the tax collection obligation to marketplaces (known as Marketplace Facilitator laws). Note that online marketplace Etsy had already begun collecting such sales tax in 2018.

eBay began collecting sales tax on January 1, 2019, for transactions where buyers are based in Washington and Minnesota, and it said it would begin collecting sales tax in Pennsylvania and Oklahoma beginning July 1, 2019.

But states have been busy passing legislation in the wake of the Supreme Court’s June 2018 “South Dakota vs Wayfair” ruling, and eBay has added to the list of states for which it said it must collect sales tax.

“Based on applicable tax laws, eBay will calculate, collect, and remit sales tax on behalf of sellers for items shipped to customers in the following states,” it wrote on its help pages, and listed the following 8 states along with the dates it would comply: Minnesota, Washington, Iowa, Connecticut, New Jersey, Alabama, Oklahoma, and Pennsylvania.

According to the help page, “Once eBay starts to collect tax in the above states, no action is required on your part, and there will be no charges or fees for eBay automatically calculating, collecting and remitting sales tax. The collection process will apply to all sales, whether the seller is located in or outside of the United States.”

eBay said in October, “We believe this ruling is unfair to small businesses and will continue to find the best way to support and advocate for our sellers.” But for marketplace-only sellers, the Marketplace Facilitator laws may be preferable to having to calculate, collect, and remit sales tax themselves.

Be sure to read eBay’s full help page carefully, and keep checking back for updates.

You can find more information about Marketplace Facilitator laws on various sites, such as this recent post published on December 28th on tax-software firm Avalara’s blog.

Update 1/4/2019: Comment on the AuctionBytes Blog.

Ina Steiner

Ina Steiner is co-founder and Editor of EcommerceBytes and has been reporting on ecommerce since 1999. She's a widely cited authority on marketplace selling and is author of "Turn eBay Data Into Dollars" (McGraw-Hill 2006). Her blog was featured in the book, "Blogging Heroes" (Wiley 2008). She is a member of the Online News Association (Sep 2005 - present) and Investigative Reporters and Editors (Mar 2006 - present). Follow her on Twitter at @ecommercebytes and send news tips to ina@ecommercebytes.com. See disclosure at EcommerceBytes.com/disclosure/.