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In Which States Does eBay Collect Sales Tax?

Scrren image of eBay website.
Buying and selling good on eBay. (Photo by Oberon Copeland @veryinformed.com on Unsplash)

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. 

Tax filing forms.
Preparing tax forms. (Photo by Kelly Sikkema on Unsplash)

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.

State Year Sales Tax Effective Tax Authority
Alabama 2019 Alabama Department of Revenue
Alaska 2021 Alaska Remote Seller Sales Tax Commission

***Note: Sales not required on a state level. It is only paid in local jurisdictions that have adopted the Alaska Remote Seller Sales Tax Commission Uniform Code.

Arizona 2019 Arizona Department of Revenue
Arkansas 2019 Arkansas Department of Finance and Administration
California 2019 California Department of Tax and Fee Administration
Colorado 2019 Colorado Department of Revenue
Connecticut 2019 Connecticut Department of Revenue Services
District of Columbia 2019 District of Columbia Office of Tax and Revenue
Florida 2021 Florida Department of Revenue
Georgia 2020 Georgia Department of Revenue
Hawaii 2020 Hawaii Department of Taxation
Idaho 2019 Idaho State Tax Commission
Illinois 2020 Illinois Department of Revenue
Indiana 2019 Indiana Department of Revenue
Iowa 2019 Iowa Department of Revenue
Kansas 2021 Kansas Department of Revenue
Kentucky 2019 Kentucky Department of Revenue
Louisiana 2020 Louisiana Department of Revenue
Maine 2019 Maine Revenue Services
Maryland 2019 Comptroller of Maryland
Massachusetts 2019 Massachusetts Department of Revenue
Michigan 2020 Michigan Department of Treasury
Minnesota 2019 Minnesota Department of Revenue
Mississippi 2020 Mississippi Department of Revenue
Missouri 2023 

(January 01, 2023)

Missouri Department of Revenue
Nebraska 2019 Nebraska Department of Revenue
Nevada 2019 Nevada Department of Taxation
New Jersey 2019 New Jersey Department of Taxation
New Mexico 2019 New Jersey Department of Taxation
New York 2019 New York Department of Taxation and Finance
North Carolina 2020 North Carolina Department of Revenue
North Dakota 2019 North Dakota Office of State Tax Commissioner
Ohio 2019 Ohio Department of Taxation
Oklahoma 2019 Oklahoma Tax Commission
Pennsylvania 2019 Pennsylvania Department of Revenue
Puerto Rico 2021 Puerto Rico Department of Treasury
Rhode Island 2019 Rhode Island Division of Taxation
South Carolina 2019 South Carolina Department of Revenue
South Dakota 2019 South Dakota Department of Revenue
Tennessee 2020 Tennessee Department of Revenue
Texas 2019 Texas Comptroller of Public Accounts
Utah 2019 Utah State Tax Commission
Vermont 2019 Vermont Department of Taxes
Virginia 2019 Virginia Department of Taxation
Washington 2019 Washington Department of Revenue
West Virginia 2019 West Virginia State Tax Department
Wisconsin 2020 Wisconsin Department of Revenue
Wyoming 2019 Wyoming Department of Revenue

 

Exceptions to eBay Sales Tax Collection Requirement

Paying for gooods and services online with a creedit card.
Paying for goods on eBay with a credit card. (Photo by rupixen.com on Unsplash)

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. 

Alan Chen

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