2019 Fall Seller Update    See What’s New

Overview

When you sell on eBay, you’re responsible for complying with all applicable tax laws. If you’re selling to buyers outside the US, you should inform them about the potential import charges they’ll need to pay when they receive their item.

If you sell to buyers in certain states in the US, AU, NZ or in the European Union (EU), your transactions will be subject to applicable sales taxes, Goods and Services Tax, and/or Value Added Tax.

Sellers’ tax responsibilities

You are responsible for paying all fees and taxes associated with using eBay as an eBay seller. For more information on eBay’s tax policy and your obligations, see our Tax policy and User Agreement.

Your tax-related responsibilities may include:

  • Paying sales tax on eBay sales
  • Paying income tax on eBay sales
  • Informing overseas buyers about import charges
  • Ability to validate what tax was collected on sales transactions.
Internet Sales Tax in the US

If you sell to buyers in the US, some states may require you to collect applicable Internet Sales Tax on your transactions. By January 1, 2020, a total of 38 states require the collection of sales tax. In such cases, eBay collects and remits Internet Sales Tax on your behalf.

Learn more about Internet Sales Tax, on our Help pages, or from your tax advisor.

Starting in November 2019, the way taxable transactions are processed and how taxes are collected for remittance will change, as follows:

  • In states where eBay is required to collect Internet Sales Tax from buyers, order totals sent for processing will reflect the gross order amount inclusive of tax.
  • Once settled, the tax amount will be automatically deducted for remittance to the applicable taxing authority.
  • A record of the sales tax portion of the order will be available on the Seller Hub Order details page and through our Download order report.

Please note the applicable tax will continue to be paid by the buyer and you do not need to take any action. These changes do not apply to sellers in managed payments.

FAQs

Internet Sales Tax FAQs

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Tax Exemptions

Can I submit a resale certificate so I do not have to pay sales tax on eBay purchases?

Yes, tax exempt buyers such as charitable entities and resellers can submit tax exemption certificates to eBay and make purchases without paying tax. Upload your tax exemption certificate here. Learn more here.

Form 1099-K

If you’ve sold at least $20,000 in gross merchandise value and exceeded 200 transactions for goods and services* on eBay this year, you will be receiving a tax Form 1099-K for all your 2019 sales transactions including relevant internet sales tax.

Refunds to a Buyer

  • If the buyer requires a refund—cancellation, full refund, less than full refund, or partial refund, eBay will refund the sales tax to the buyer in these cases since we collected the sales tax on the original transaction.
  • The best practice is to send refunds through the eBay platform. However, if the refund is carried out on the PayPal platform, the seller is responsible to refund the full amount paid by the buyer at checkout including any paid Internet Sales Tax.
  • The seller will have to review the original PayPal transaction for the total amount of tax due to the buyer and add this to the refund amount for a full refund or the proportional amount for a partial refund.
  • When the seller refunds the buyer, eBay will credit them back any taxes refunded on a future billing invoice.
How to Access Reports

How can I check how much Internet Sales Tax was collected by eBay?

Our Orders Report itemizes how much tax we collected and remitted for transactions in marketplace responsibility states. You can download your orders in a CSV (comma-separated) file from the “Manage all orders” page in Seller Hub.

Report from eBay Seller Hub
  1. Navigate to Orders tab.
  2. In the top-right corner, click on Download Report.
  3. Under the Listings and records drop-down, select the “Sold” report, then choose the “standard” file format (Excel file) and choose the date range.

Sellers can periodically download the data and save it to a personal drive in order to accumulate a full year’s worth of data. Later this year, we’ll expand the reports beyond 90 days.

You will need to use the buyer’s address information to determine sales by state and which taxes they collected and must remit. Later this year, reports will show sales tax collected.

Report from PayPa

You can also pull a transaction report from your PayPal account.

For Business PayPal Accounts

  • After you login to your account, click on “Reports” in the top navigation. Reports
  • Select “Tax documents” on left hand menu and tax year on the next page to generate a report. Tax documents

For Non-Business PayPal Accounts

  • After you login to your account, click on “Activity” in the top navigation. Activity
  • Click on “Statements”. Statements
  • Select “Tax docs” and tax year on the next page to generate a report. Tax docs
Changes in IST Collection

If you sell to buyers in the EU, you may be required to charge and remit Value Added Tax. Value Added Tax is similar to a sales tax. Generally speaking, it’s a tax on a business’s gross receipts from the sale of goods and services. For example, any eBay seller making sales to UK buyers and fulfilling those orders from UK-based inventory is likely obligated to register for, charge and remit Value Added Tax in the UK. Speak with a tax advisor to better understand how Value Added Tax applies to your eBay business in the EU and other countries outside the US.

Do I need to register for Value Added Tax in the EU?

eBay wants sellers to be successful and legally protected, wherever you do business.

Registering for Value Added Tax in the EU may help you do both those things.

Whether you need to register for Value Added Tax in an EU member state depends on the way you conduct your business.

The key factors that determine if you have an obligation to register for Value Added Tax are

  1. Your business’s country of establishment.
  2. The location of your inventory.
  3. Your level of sales.

It’s each seller’s responsibility to ensure they are Value Added Tax-compliant. eBay has partnered with international consulting firm KPMG to offer Value Added Tax consultation and education at zero cost to our sellers.

Have your Value Added Tax questions answered in less than 24 hours. Email KPMG or call them at (718) 887-9738.

Next steps

Complete the following steps to ensure you are Value Added Tax-compliant and to avoid potential selling restrictions

  1. Register with the local tax authority in each country where you’ve determined you have a Value Added Tax obligation.
    1. For example in the UK, register with HM Revenue & Customs (HMRC), the UK’s tax authority.
  2. Provide eBay with your Value Added Tax ID number, and we’ll automatically add it to all your eligible new listings.

Value-Added Tax resources

Email KPMG or call them at (718) 887-9738 for a no-cost Value-Added Tax consultation

HMRC Value-Added Tax guidance for overseas, online retailers

HMRC Value-Added Tax registration

KPMG “Value-Added Tax Basics” Webinar

FAQs

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* Except in Vermont and Massachusetts where the threshold is lower irrespective of the number of transactions.