If you sell to buyers in certain states in the US or in the European Union (EU), your transactions will be subject to applicable sales taxes and/or Value-Added Tax.
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. In such cases, eBay calculates, collects, and remits Internet Sales Tax for orders shipped to customers on your behalf. After we collect state Internet Sales Tax, you do not need to take any action. There are no extra charges or fees for this service. Learn more about Internet Sales Tax in our FAQs below, on our Help pages or from our partners Avalara and TaxJar.
Value-Added Tax in the EU
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
- Your business's country of establishment.
- The location of your inventory.
- 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.
Complete the following steps to ensure you are Value-Added Tax-compliant and to avoid potential selling restrictions
- Register with the local tax authority in each country where you've determined you have a Value-Added Tax obligation.
- For example in the UK, register with HM Revenue & Customs (HMRC), the UK's tax authority.
- Provide eBay with your Value-Added Tax ID number, and we'll automatically add it to all your eligible new listings.
Internet Sales Tax FAQs
- Is there a way for tax-exempt buyers (e.g., charitable entities, resellers, etc.) to provide an exemption certificate and make purchases without paying tax?
We're currently creating a buyer exemption system that will allow buyers to submit tax exemption certificates. We expect a solution in March 2019. In the meantime, a buyer may be able to get a credit for sales tax paid to eBay directly from their state. However, buyers will want to consult with a tax advisor or contact the department of revenue of their respective state for further details as policies are different for each state.
Will eBay be providing tools to help sellers with their tax obligations?
We're developing reporting and exploring partnerships with tax service providers to help sellers with their sales tax obligations. For more information on these new tax requirements, we recommend consulting with your tax advisor. If you don’t have one, please contact our partners Avalara and TaxJar for specific insights into the best course of action for you.
- How can sellers see what their sales and number of transactions are by state?
From Seller Hub:
- Navigate to Orders tab.
- In the top-right corner, click on Download Report.
- 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. Sellers 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 by eBay and sellers separately.
For states where eBay is collecting tax, if a member lists an item in two different categories how will tax be calculated? Will the member see how much was charged where?
The primary category and buyer address determine the taxability. If the member lists in two categories, we will use the primary category to determine taxability. The View Order Details page will show the tax amount collected by eBay.
- Does shipping and handling get taxed as well?
Each state's legislation dictates if shipping and handling are taxable or not. In those states where eBay is collecting tax, we will collect tax on shipping and handling where applicable.
What states are sellers required to collect sales tax for?
Sellers are generally required to collect sales tax in any state where they have a physical presence, which has been the case even before the recent Supreme Court decision. In addition, if a seller meets any of the new economic nexus standards in other states, they would need to collect and remit sales tax in those states as well. Sellers should consult with their tax advisor about tax obligations for each state as the rules may vary on a state-by-state basis. If you use platforms other than eBay for selling, you may need to aggregate all of your sales into a state to determine if you have crossed that states threshold for economic nexus.
- Where can I find more information about eBay collecting internet sales tax and which states eBay collects?
If a seller discounts the invoice, will the sales tax amount adjust as well? If not, is there anything in the works that will solve this?
This is existing behavior - if a seller provides the buyer with a discount, the tax will adjust accordingly. The tax will be calculated on the discounted price provided by the seller.
- For states where eBay is collecting sales tax, if the buyer is refunded, cancels the transactions, or returns the item, will the seller be responsible for refunding the sales tax to the buyer?
No. eBay will refund the sales tax to the buyer in these cases since we collected the sales tax on the original transaction.
- Is there a way to enter different percentages for different jurisdictions within a state?
We're in the process of updating the Tax Table to provide this functionality for our sellers.