Tax Information
Understand tax obligations that may affect you in the US and EU.
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.
If you sell to buyers in the US, some states may require you to collect applicable Internet Sales Tax on your transactions. As of April 1, 2020 a total of 40 jurisdictions 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.
Internet Sales Tax FAQs
-
What states now charge Internet Sales Tax?
There are currently 34 states where eBay is obligated to collect and remit to the respective authorities for marketplace transactions.
Marketplace Facilitator Law by State (IST)
- Alabama
- Arizona
- Arkansas
- California
- Colorado
- Connecticut
- Hawaii as of January 1, 2020
- Idaho
- Illinois as of January 1, 2020
- Indiana
- Iowa
- Kentucky
- Maine
- Maryland
- Massachusetts
- Michigan as of January 1, 2020
- Minnesota
- Nebraska
- Nevada
- New Jersey
- New Mexico
- New York
- North Dakota
- Ohio
- Oklahoma
- Pennsylvania
- Rhode Island
- South Carolina
- South Dakota
- Texas
- Utah
- Vermont
- Virginia
- Washington
- West Virginia
- Wisconsin as of January 1, 2020
- Wyoming
-
Why does eBay have a tax policy?
There may be legal implications, fees and tax obligations associated with using eBay. Remember that it’s your responsibility to understand and comply with relevant laws and regulations, and that you have to pay relevant fees and taxes. Our full policy explains how and when eBay charges applicable taxes, and provides additional guidance on your tax obligations, but we recommend you talk with a tax professional if you have any questions.
-
Can eBay give me advice on my tax scenario?
If you are selling on eBay as a business, we strongly recommend seeking professional advice about your tax obligations. You can also review the eBay Tax policy in the Help Hub.
-
What if my buyer has questions about the tax?
You can refer them to the eBay Tax policy in the Help Hub. Our full policy explains how and when eBay charges applicable taxes.
- 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?
-
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 does eBay determine how much sales tax should be applied to each state/sale?
Each state and jurisdiction have different sales tax rates. eBay determines the tax rate based on the ship to address and the items purchased.
-
Are shipping and handling 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. As of October 1, 2019, 34 states will require the collection of sales tax. 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?
Please visit our Help page and look for updates on Seller News.
-
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?
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.
-
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.
-
Does eBay charge final value fees on the final amount including sales tax?
No. Final value fees only apply to the sale price of the item.
-
Will eBay charge Internet Sales Tax on any fees I pay to eBay?
No. eBay only collects and remits Internet Sales Tax on the sale price of your items.
-
Does eBay collect Internet Sales Tax from the seller or the buyer?
Depending on tax legislation where you live and where your buyer lives, sales tax, Value Added Tax (VAT), Goods and Services Tax (GST), or similar consumption tax may apply to items you sell on eBay. Whether it’s included in the listing price or added at checkout depends on both the item’s location and the buyer’s shipping address.
Tax Exemptions
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.
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.
- 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.
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.
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.
- Select “Tax documents” on left hand menu and tax year on the next page to generate a report.
For Non-Business PayPal Accounts
- After you login to your account, click on “Activity” in the top navigation.
- Click on “Statements”.
- Select “Tax docs” and tax year on the next page to generate a report.
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.
Next steps
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.
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
VAT FAQs
-
I live in Europe, but I sell on ebay.com (USA) and most of my customers are out of European Union. Must I to pay VAT to ebay.com as an additional tax?
Since you are doing business in Europe, you are required to comply with EU laws and regulations, as well as those in your own country. The eBay sites in Europe (such as ebay.sp, ebay.co.uk, ebay.de, etc.) are set up with the correct processes to help sellers meet these requirements. Learn More.
-
Do I need to inform a buyer overseas about import charges?
Yes. Buyers are responsible for paying import fees, usually as part of clearing their parcel through customs or when they receive their item. If you offer international shipping, you can’t include these costs in the item’s purchase and shipping price. Make sure to let international buyers know this in your listings. If your item’s being sent using the Global Shipping Program, eBay will inform the buyer about import charges and these will be included in the order total at checkout.
* Except in Vermont and Massachusetts where the threshold is lower irrespective of the number of transactions.
