In Which States Does eBay Collect Sales Tax?

eBay is an online ecommerce platform that allows people from all over the world to sell their goods in the USA. Each state in the USA has the right and power to decide whether online sellers are required to pay sales tax in their state and how much sales tax will be charged on online goods. 

eBay is required to pay sales tax to the states where it ships goods, regardless of how much business the actual seller does with the state. The reason for this is that eBay, as a third-party service provider, makes it possible for sellers all over the world to provide services to people across the USA. Since eBay is the middleman that connects the end consumer, the state, and the sellers, eBay is charged with collecting the sales tax for goods delivered to customers in states with online sales tax and remitting those taxes to the states according to the remittance schedules set by each state where it does business. 

Individual states have the power to require sales tax to be remitted by online selling platforms. At this time, there has been no collective decision by the states to establish uniform sales taxes, payment schedules, or qualifying conditions for being required to pay each state a sales tax. 

eBay Collects Sales Tax for Its Users

Fortunately, eBay collects the sales tax for goods sold to customers in each state where eBay does business. This relieves eBay sellers from being burdened with identifying the states that require sales tax, the amount of sales tax that must be paid, and when the sales tax has to be remitted to the states where they do business. Moreover, this is especially beneficial to sellers who sell big ticket items or large amounts of product in a specific state because the consequences for failure to pay sales tax, includes back taxes, interest on owed taxes, penalties, and possibly other punishments if the state chooses to aggressively pursue the tax delinquent merchant. 

States Where eBay Collects Sales Tax

Currently, eBay collects sales tax in the states listed in the chart below.

Exceptions to eBay Sales Tax Collection Requirement

There are a few exceptions to the sales tax collection requirements. Those exceptions are:

• States which do not charge a sales tax. The four states that do not charge any sales tax for eBay products are Oregon, Montana, Delaware, and New Hampshire.
• If the recipient of the goods is a reseller and has filed a valid resale certificate with eBay.
• The purchaser is a non-profit with a tax exemption and has filed paperwork with eBay substantiating the tax exemption claim.
• The seller and buyer both reside in states with no sales tax. 

Final Thought

If you are unsure about whether you owe sales tax to a state to which you have sent goods, you can contact an experienced, ecommerce accountant who can review your business records and tell you whether you should have paid sales tax to a state for goods shipped to that state and whether eBay has paid those taxes on your behalf. It is likely that eBay paid sales tax on your behalf, but you should check to make sure that it was done because if it wasn’t paid, it could cost you a lot of money. 

Contact the Free Cash Flow (FCF) Agency if you want advice or assistance with your sales tax obligations.